How Trade Facilitation Measures influence Export Orientation? Empirical Estimates with Logistics Performance Index Data

Abstract. With inception of a comprehensive WTO framework in 1995, while the tariff barriers across Member countries have declined, several procedural and policy-related hassles still continue to obstruct trade flows. To reduce the procedural hassles to export and import flows, from the Cancun Ministerial (2003) onwards, negotiations to reach an agreement on Trade Facilitation (TF) started, which was finally concluded at the Bali Ministerial (2013) meeting of the WTO. The current analysis explores the relationship between TF measures, as reflected from the World Bank Logistics Performance Index (LPI),and export orientation (export as percentage of GDP) during four years, namely 2007, 2010, 2012 and 2014. The empirical results underline the difference in the influence of TF on export orientation in higher-income and lower-income countries. It is concluded that there is need to continue the ‘Aid-for-Trade’ support measures to lower-income economies, for improving their TF scenario.Keywords. Trade policy, Trade facilitation, Exports, LPI, Empirical estimate, Aid-for-Trade.JEL. F13, F14