COMCEC Trade Outlook 2016
33
Trade Facilitation:
Trade Facilitation aims at easing the trade among the countries
through decreasing the burden of procedures and cost of
making trade. Importers and exporters face various obstacles
while making international trade. Issues including export and
import procedures, customs formalities, transportation and
logistics problems may increase the cost of making trade for
the firms. Studies, such as WTO (2004) and De (2009) suggest that higher transport costs is in
many cases more restrictive to trade than high tariffs.
Various studies have been conducted to measure the impact of transport constraints on
international trade. For example, based on their research on Middle East and North Africa
(MENA) region, Bhattacharya and Hirut (2010) suggest that reducing the transport constraint
from the average in the region to the world average could have a significant impact on trade
volumes, raising exports by 9,5 percent and imports by 11,5 percent, while all other
determinants are constant (ceteris paribus). There are several indices or reports developed by
the international institutions to identify the bottlenecks in countries which hinder international
trade. TheWorld Bank Doing Business Report is one of these reports which calculate the average
time and cost for doing business in countries. World Bank introduced a new methodology for
measuring ease of trading across borders. Trading across borders, as measured by Doing
Business, measures the time and cost (excluding tariffs) for documentary compliance and
border compliance in exporting or importing goods.12 Figures 38 and 39 illustrate border and
documentary compliance costs and times for the lowest and highest ranked OIC member states
according to the distance to frontier score for trading across borders. The figures reveals that
the cost and times of trade substantially vary among the OIC Member States. For instance, while
in Albania, ranking first in trading across borders amongst the OIC, the cost of border
compliance in exporting is 181 dollars, it goes up to 983 dollars in Cameroon which has the last
place in the rank. On the other hand, in terms of border compliance times in exporting, it takes
18 hours for border compliance in Albania while it takes 202 hours in Cameroon. Reducing trade
costs in the OIC member states is important to access and to be more competitive in the
international markets.
12 For detailed information on the methodology please visit World Bank
“Trade Costs are
higher in Landlocked
Member States”