This research project is focused on expanding knowledge about the relationships between trade costs and private sector growth and export competitiveness in developing countries. A major focus is on exploring the dynamic gains associated with lowering trade transactions costs and identifying the relative importance (net benefits) of related reform measures. The project has two primary parts: research and policy relevant analysis, and support for new data.
Trade facilitation has no standard definition. In a narrow sense, trade facilitation simply addresses the transportation logistics and customs administration associated with cross-border trade. In recent years the definition has broadened to include the environment in which trade transactions take place. This includes the transparency of trade policy and regulation, as well as product standards, infrastructure to support trade, and technology as it applies to lowering trade costs, for example.
International trade provides an important engine for private sector development and reduction in global poverty. This is particularly true for small- and medium-sized firms in developing countries. The ability of firms to deliver goods and services on time - at lowest possible costs - is a key determinant of successful integration into the world economy and lifting the poor out of poverty. Moreover, steps taken by developing countries to lower trade barriers – including removing obstacles to trade with other developing nations – is critical to expanding trade and welfare ahead.
This component of a new Multi-donor Trust Fund for Trade at the World Bank is dedicated to building a stronger understanding of the concrete relationships between trade costs, trade facilitation, transparency, governance, and competitiveness. A major focus of the work is on exploring concrete, policy-relevant topics in areas such as: customs modernization, regulatory reform, standards harmonization, infrastructure investment, and the diffusion of information and communication technologies (ICT). The project also includes analysis on the effectiveness of various aid-for-trade and capacity-building frameworks currently in practice or under consideration. The project is aligned with several aspects of the six strategic themes outlined by the President of the World Bank Robert Zoellick.
This new work builds on the work already undertaken in a project at the Bank with the support of the United Kingdom Department for International Development (DFID), including the recently updated Trade Facilitation Indicators.
Questions about the Project may be directed to John S. Wilson, Lead Economist, The World Bank.
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