Changes to the ETI methodology

In 2014, the ETI went through a major revision in order to incorporate newly available data and streamline the structure. The number of pillars was reduced from nine to seven. In particular, domestic and foreign market access, which used to be sub-pillars of pillar 1, were promoted to separate pillars in the new ETI structure. Pillars 2, 3 and 4 were aggregated into the Efficiency and transparency of border administration pillar and pillars 8 and 9 into the Operating environment pillar.

Incorporating feedback received from several stakeholders over several years, the Forum has worked with the International Trade Centre to change the computation of the market access subindex and incorporate intra-EU trade into the results. This allows to assess variations in market access even within the European Union (based on the differences in intra vs. extra-EU trade of member countries and on the extra-EU trade patterns) and to make data comparable vis-à-vis other trade agreements. The Share of duty-free imports (1.03), Tariffs faced (2.01) and Index of margin of preference in destination markets (2.02) indicators are all affected by this change.

Since the 2016 edition of the Doing Business report, the World Bank has also improved the methodology it uses to calculate the Trading across Borders indicators, several of which are used in the ETI’s Efficiency and transparency of border administration pillar.¹. The new methodology moves away from the calculation of number of documents required for export/import and focuses exclusively on the time and cost dimension, distinguishing between documentation and border compliance. The scenarios used for the calculation have also changed: in the case of imports the scenario hypothesizes importing a containerized load of automotive components (HS 8708) from the main import partner for that product group; in the case of exports, the scenario is on a country-by-country basis, selecting a country-product pair—at a HS2 disaggregation level—with the highest export value. The indicators in this pillar also take into account differences in transport mode, reflecting the most used mode for that specific trade relationship, therefore moving away from the use of sea transport for all countries, which was the case in the old methodology. This has significant changes especially in the case of landlocked economies.

Finally, some of the indicators used in 2014 have become unavailable and have, whenever possible, been substituted with similar proxies. The Centre d’Études Prospectives et d’Informations Internationales (CEPII) no longer updates the Institutional Profile Database, which included data on the Judicial efficiency and impartiality in commercial disputes indicator. This has been substituted with the Enforcing contracts distance-to-frontier score from the World Bank’s Doing Business Report. The Share of paved roads indicator has been replaced with an innovative road quality index (indicator 4.06), which takes into account the average speed of an itinerary connecting a country’s largest cities as well as the straightness of the network. Finally, the World Economic Forum discontinued the collection of data on the availability of trade finance through its Executive Opinion Survey. Unfortunately, no alternative proxy was identified that could cover a sufficiently large number of countries.

As a consequence, the 2016 results are not fully comparable with the results published in 2014. Given the importance of tracking performance over time, the 2014 results have been recalculated for the purpose of the analysis.