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Trade Facilitation and the EU-ACP Economic Partnership Agreements

Author

Summary, in English

This paper assesses the potential effects from trade facilitation in terms of increased trade flows both on average and specifically for the six regional groups of ACP countries negotiating Economic Partnership Agreements (EPAs) with the EU. Data from the World Bank’s Doing Business Database on the time required to export or import are used as indicators of cross-border transaction costs, and a gravity model on two-way bilateral trade between 22 EU countries and 100 developing countries is estimated using a sample selection approach. The results suggest that time delays on the part of the exporter and the importer generally significantly decrease trade flows, but also that this effect is not constant, in the sense that the elasticity of trade with respect to border delays declines at higher levels of time requirements. On average, lowering border delays in the exporting country by one day from the sample mean would yield an export-increasing effect of about 1 percent, while the same reduction in the importing country would increase imports by about 0.5 percent. Significant negative effects are also found of both export and import transaction costs for most EPA groups, and the effects tend to be at least as large as the average or larger. The results are generally robust for a number of alternative estimation methods such as Poisson estimation, IV estimation taking sample selection into account and the sample selection approach suggested by Helpman et al (2007).

Publishing year

2008

Language

English

Pages

518-546

Publication/Series

Journal of Economic Integration

Volume

23

Issue

3

Document type

Journal article

Publisher

Center for International Economics, Sejong Institution, Sejong University

Topic

  • Economics

Keywords

  • Trade Facilitation
  • EU
  • ACP
  • Economic Partnership Agreements
  • Gravity model
  • Sample Selection

Status

Published

ISBN/ISSN/Other

  • ISSN: 1225-651X