Trade

bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed POLIcy RESEARCH WORKING PAPER 2988 Wilson, Mann, and Otsuki analyze the relationship the effect of ports or regulations. The authors then between trade facilitation, trade flows, and GDP per estimate the benefits of specific trade facilitation efforts capita in the Asia-Pacific region for the goods sector. by quantifying differential improvement by members of They define and measure trade facilitation using four the Asia Pacific Economic Cooperation (APEC) in these broad indicators. These are constructed using country- four areas. Based on a scenario in which APEC members specific data for port efficiency, customs environment, below average improve capacity halfway to the average regulatory environment, and electronic-business usage. for all members, the authors find that intra-APEC trade They estimate the relationship between these indicators could increase by $254 billion. This represents and trade flows using a gravity model. The model approximately a 21 percent increase in intra-APEC trade includes tariffs and other standard variables. flows, about half coming from improved port efficiencies The authors find that enhanced port efficiency has a in the region. Using Dollar and Kraay's estimate of the large and positive effect on trade. Regulatory barriers effect of trade on per capita GDP, these improvements in deter trade. The results also suggest that improvements trade facilitation suggest an increase in APEC average per in customs and greater electronic-business use capita GDP of 4.3 percent. significantly expands trade, but to a lesser degree tha