Trade facilitation data initiatives
There are numerous ongoing initiatives to measure various aspects of the trading environment at national, regional and global levels. Below is a review some of the most prominent ones.
Introduced in 2005 as part of the World Bank’s Doing Business project, the Trading across Borders indicators cover 189 economies (as of 2015) and are updated on an annual basis.1 They are based on a scenario approach in which each country is studied using the same hypothetical import-export scenario. In this scenario, a shipment of containerized auto parts is imported from the main importing partner for that product group, irrespective of how relevant auto parts are for the country or of who that trading partner is. The exporter is the country-product pair (at an HS2 level) with the highest trade value, thus potentially running into problems of endogeneity and—especially in the case of highly-diversified exporters—representing a small percentage of the country’s total export.
In a 2014 study of 10 countries, the World Bank found that the Trading Across Borders estimates were 20-30 percent higher when compared to findings from a more detailed step-by-step analysis.2 Despite the limits of a scenario-based approach, the Trading across Borders indicators remain the best resource currently available to measure countries’ actual performance in facilitating trade and, as such, they are used widely in the empirical literature. The indicators are also included in the Enabling Trade Index (ETI).
Time Release Studies—developed by the World Customs Organization—provide a systematic approach to measuring the time for each step in the border clearance procedure and, by looking at total time of release in a disaggregated way, complement the Trading across Borders indicators and provide useful understanding of where key bottlenecks are.3 However, given the amount of resources necessary for such detailed studies, they are generally done on ad hoc basis and remain largely confidential documents.
Other attempts at capturing countries’ performance in terms of clearance processes and overall efficiency is represented by both the Logistics Performance Index (LPI) by the World Bank and, to a lesser extent, the World Economic Forum’s Executive Opinion Survey (EOS), whose results feed into a number of indexes, including the ETI.4,5 Both exercises are broader in nature; the former looks at the overall logistics environment, and the latter at the general competitiveness performance of a country. Both also share similar limitations. Since they are opinion surveys, respondents give an approximate assessment on a 1-5 and 1-7 scale, respectively, of a number of relevant aspects.
Other initiatives are designed to gauge the policy environments within countries. The OECD’s Trade Facilitation Indicators track the implementation of key reforms around border procedures, indirectly providing a useful snapshot of how far countries are in terms of meeting the obligations laid out in the WTO Trade Facilitation Agreement.6 Similarly, UN Regional Economic Commissions have undertaken the Global Survey on Trade Facilitation and Paperless Trade on an annual basis since 2012, while the Global Express Association’s Custom’s Capability Surveys aim to gather the perspective from express courier operators on the ground.7,8