Enhancing Public Availability of Customs Information
In the Islamic Countries
6
INTRODUCTION
Anderson and Van Wincoop1 show that “trade costs”, as economists commonly use the term,
encompass the full range of factors, both natural and human in origin, that drive a wedge
between the producer price in the exporting country, and the consumer price in the importing
country. Analysts are familiar with many of these factors, like geographical distance, tariff
barriers, non-tariff measures, and so forth. But the issue of transparency in trade policy—which
combines policy predictability and simplification--is less studied, in part due to the difficulty of
assembling reliable and informative data. Nonetheless, Helble et al. use a gravity model of trade
to estimate that improving trade-related transparency could increase trade in the Asia-Pacific
by around 7.5% over baseline.2 This number is clearly significant from an economic point of
view, but the aggregate nature of the analysis leaves open the question as to what sort of policy
measures a government could in fact implement in order to realize those gains. Similarly,
Lejarraga and Shepherd3 show that transparency provisions in regional trade agreements
(RTAs) are associated with higher trade between the parties, around 15% over baseline in the
typical case. The topic of this report, information availability, is clearly related to transparency:
it cannot be said that trade processes are transparent if the rules governing them are not freely
available for consultation, for example. More broadly, improving information availability is one
way among many to improve the transparency of the trading environment, with a view to
realizing the gains described previously.
Given the many and varied nature of trade costs, it is important to have a conceptual framework
for understanding them resents one such approach, focusing on where the trade costs
occur in terms of a cross-border value chain. The most obvious sources of trade costs occur
“between the borders”, for instance international freight and insurance charges, as well as trade
finance. These trade costs are inherent in the nature of the transaction as having an international
dimension. Also well known are trade costs that occur at the border of the importing country,
such as the imposition of tariffs and some kinds of non-tariff measures NTMs. Following
publication of the Doing Business “Trading Across Borders” data, attention has also focused on
the time cost of delays at the border. For present purposes, however, a little studied
accompaniment to these sources of trade costs is the idea of information costs. That is, for a firm
in an exporting country, it is costly to obtain information on required rules and formalities in
the importing country, which means there is a risk of shipments being rejected or delayed due
to errors in documentation or certifications. These trade costs are the focus of this report:
historically, it has been necessary to consult paper form regulations, or engage the services of
specialized brokers who can take care of local paperwork requirements. But the movement
towards placing more information in the public domain, including online, is reducing the
incidence of these costs. The purpose of this report is to highlight successful ways in which
countries in the OIC and outside it have confronted the issue of information-related trade costs,
and worked to reduce them by putting Customs and trade-related information in the public
domain.
Given that information is the central focus of this report, it is appropriate to define terms inmore
details. Customs information refers to rules and regulations, including duty rates, that govern
1 Anderson, J., and E. van Wincoop. 2004. “Trade Costs.” Journal of Economic Literature, 42(3): 691-751.
2 Helble, M., B. Shepherd, and J. Wilson. 2009. “Transparency and Regional Integration in the Asia-Pacific.” The
World Economy, 32(3): 479-508.
3 Lejarraga, I., and B. Shepherd. 2013. “Quantitative Evidence on Transparency in Regional Trade Agreements.”
Trade Policy Paper No. 153, OECD.