Selected Relevant Publications and Online Resources

This book aims to help the policymaker and development community in general to understand the nature of the problems and policy dilemmas that landlocked countries face to trade with the rest of the World. It presents an important contribution to the existing literature, by focusing on a new conceptual framework that challenges the previous paradigm based on physical infrastructure and state-led access solutions, embodied in many treaties. Suggesting that the main access problems for landlocked countries occur in the territory of the transit country, this volume provides a new approach to understand the set of incentives that drive the political economy and shape the institutions governing goods’ transit along corridors. Overall, the policy levers available to overcome these barriers are based on universally applied principles, recognizing the need for re-engineering current transit regimes which have been implemented with little success outside Europe. A risk-approach to border control and technology use, along with trust building between private operators and public agencies, all point toward the need to encourage and formally recognize higher-quality trucking companies. Meanwhile, other modes of transportation represent an alternative to road transit, but they also entail disadvantages, suggesting that their role is likely to remain limited to niche segments, specific commodities and exceptional market circumstances.

This paper shows that improved trade facilitation can help promote export diversification in developing countries. The authors find that 10 per cent reductions in the costs of international transport and domestic exporting costs (documentation, inland transport, port and customs charges) are associated with export diversification gains of 4 and 3 per cent, respectively, in a sample of 118 developing countries. Customs costs play a particularly important role in these results. Lower market entry costs can also promote diversification, but the effect is weaker (1 per cent). They also find evidence that trade facilitation has stronger effects on diversification in poorer countries. Results are highly robust to estimation using alternative dependent and independent variables, different country samples and alternative econometric techniques. The authors link these findings to recent advances in trade theory that emphasize firm heterogeneity, and trade growth at the extensive margin.

Trade facilitation helps countries achieve national development objectives. It makes them more competitive, allowing goods and services to be traded on time and at low transaction cost. But many developing countries will be unable to take advantage of international trade opportunities unless they can go beyond the traditional reform agenda—almost exclusively dedicated to customs reform and hard infrastructure—and invest in areas where trade is most constrained. Facilitating trade may require reforming and modernizing border management institutions, changing transport regulation policy, and investing in infrastructure. A trade supply chain is only as strong as its weakest link. Locating the weakest links and addressing them through targeted development interventions has therefore become a major element of the new trade facilitation and logistics agenda.

This study empirically investigates how the quality of trade facilitation (both on-the border and behind-the-border factors) in landlocked developing countries (LLDCs) and in their transit countries impacts LLDC trade. The main contribution of this study is the consideration of trade facilitation environment in both LLDCs and transit countries. In the area of exports, an important policy implication flowing from the results of the study is that international assistance for improving the trade performance of LLDCs, as envisaged by the Almaty Programme of Action, endorsed by the United Nations General Assembly, should focus on improving the trade facilitation environment in both the LLDCs and their transit neighbours. In the area of imports, the policy implication is that LLDCs should rationalize their tariff structures, which will help bring about a more efficient resource allocation, leading to increased specialization and export competitiveness.

The Cost of Being Landlocked proposes a new analytical framework to interpret and model the constraints faced by logistics chains on international trade corridors. The plight of landlocked developing countries (LLDCs) has naturally received special attention for decades, leading to a specific set of development priorities based upon the concept of dependence on the transit state. Therefore, the standard approach used to tackle the cost of being landlocked has been predominantly aimed at developing regional transport infrastructure and ensuring freedom of transit through regional conventions. But without sufficient attention given to the performance of logistics service delivery to traders, the standard approach is unable to address key bottleneck concerns and the factors that contribute to the cost of being landlocked. Consequently, the impact of massive investment on trade corridors could not materialize to its full extent. Based on extensive data collection in several regions of the world, this book argues that although landlocked developing countries do face high logistics costs, these costs are not a result of poor road infrastructure, since transport prices largely depend on trucking market structure and implementation of transit processes. This book suggests that high logistics costs in LLDCs are a result of low logistics reliability and predictability, which stem from rent-seeking and governance issues. The Cost of Being Landlocked will serve as a useful guide for policy makers, supervisory authorities, and development agencies.

This paper starts out defining trade facilitation and provides an overview of trade facilitation in the literature. It then proceeds to define in more detail the evolution of trade facilitation in the WTO and provides an overview on the Doha Mandated, the Annex D Modalities and the negotiating process. The paper discusses the existing commitments and proposed amendments to the three GATT Articles and discusses other important issues such as Capacity Building and Special and Differential Treatment in the context of trade facilitation in the WTO. The paper concludes by providing an overview over where India stands.

This paper explores the likely challenges that the financial and economic crises pose for landlocked

developing countries; the nature of these countries’ vulnerabilities to the crises; the response of relevant

global and regional institutions to the crises; and the policy options open to these countries at the

domestic level. In that respect, the critical importance of securing and improving access to the sea and the quality, cost and reliability of transportation networks generally , as emphasized by the Almaty Programme of Action, is a persistent theme.

This technical note provides background information on GATT Article V and then provides an overview on various implementation issues, including traffic and access rights, bilateral, regional and plurilateral agreements and transit corridor arrangements. It concludes by providing a number of references and tools available.

Maritime transport costs have a significant impact on the trade in agricultural goods. Maritime transport costs represent a high proportion of the imported value of agricultural products – 10% on average, which is a similar level of magnitude as agricultural tariffs. This study shows that a doubling in the cost of shipping is associated with a 42% drop in trade on average in agricultural goods overall. The tendency to source imports from countries with low transport costs is therefore strong. Trade in some products is particularly affected by changes in maritime transport costs, in particular cereals and oilseeds, which are shipped in bulk. Time spent in transit also has a strong effect on trade: an extra day spent at sea on an average sea voyage of 20 days implies a 4.5% drop in trade between a given pair of trading partners. Not only cost but also efficiency in getting agricultural goods to market are therefore important factors in explaining trade flows.

This practical tool identifies the obstacles to the fluidity of trade supply chains. Taking the perspective of service delivery to traders, the TTFA assessment is founded on facts and data collected through a series of meetings and interviews with the main public and private participants to these international supply chains. They include customs and other border agencies, transport regulators, freight forwarders, transport operators, ports, and others. The toolkit helps design plans of action to improve logistics performance among its three main dimensions: infrastructure, services, and procedures and processes. This new edition of the toolkit provides an opportunity not only to reflect the changes in the trade environment and the need for additional features in the toolkit, but also to benefit from the experiences of the assessments already undertaken based on the original edition. The toolkit is designed to help by providing a first cut at identifying the bottlenecks and break the ground for in-depth work. Its scope is very comprehensive, yet it is not an encyclopedia of trade and logistics, but rather a guidebook. Readers in need of more information in any of the specific sub-areas are invited to use specialized resources made available by various international sources. The World Bank is currently issuing toolkits for border management, port reform, supply chain security, and transit corridors. We are fully confident that this document will be a useful guide that will help implement this important agenda in an increasing number of countries.

Infrastructure is shown to be a cost-effective means of lowering trade costs and thereby promoting regional growth and integration. This book combines thematic and country studies, while breaking new ground in quantifying infrastructure’s impact on Asia’s trade costs. The contributors add to empirical estimates of Asia’s trade costs and infrastructure’s influence on those costs while also contributing to a better understanding of the region’s logistics challenges. The book includes interesting case studies of rapid growth and congestion (in China), inland transportation challenges (India), port competition in an archipelago (Indonesia) and transportation modal switching as value-added rises (Malaysia) that are policy- and project-relevant in their own right. The analysis and policy implications in this book will be of interest to trade and infrastructure policy-makers and academics at graduate and higher levels involved in economic development or Asian studies, as well as the broader development community.

This paper presents a comprehensive review of the implementatiom of the Almaty Programme of Action as contribution to its midterm review.

This publication is the World Bank’s contribution to the midterm review of the Almaty Programme of Action.

The article provides an overview of trade facilitation and the relevant World Trade Organization (WTO) law. After introducing the subject, the article describes what trade facilitation entails and demonstrates its economic impact. The focus turns to the current WTO trade facilitation negotiations. In order to assess the potential for revision, related panel and Appellate Body reports are analyzed and the contents of the relevant GATT Articles – namely Articles V, VIII and X of the GATT – are clarified. Furthermore, other multilateral trade agreements are looked at. It is shown that they contain certain principles that are likely to set a trend for matters to be regulated by the WTO. Finally, the article looks at some of the Members’ proposals submitted to the WTO Secretariat and gives an outlook on the future of the negotiations.

Access to basic infrastructure services – roads, electricity, water, sanitation – and the efficient provision of the services, is a key challenge in the fight against poverty. Many of the poor (and particularly the extreme poor) in rural communities in Latin America live on average 5 kilometres or more from the nearest paved road, which is almost twice as far as non-poor rural households. There have been major improvements in access to water, sanitation, electricity, telecommunications, ports, and airports, but road coverage has not changed much, although some effort and resources have been invested to improve the quality of road networks. This paper focuses on the main determinants of logistics costs and physical access to services and, whenever possible, provides evidence of the effects of these determinants on competitiveness, growth, and poverty in Latin American economies. The analysis shows the impact of improving infrastructure and logistics costs on three fronts – macro (growth), micro (productivity at the firm level), and poverty (the earnings of poor/rural people). In addition, the paper provides recommendations and solutions that encompass a series of policies to reduce the prevalent high logistics costs and limited access to services in Latin America.

Annex D of the July 2004 Decision of the WTO General Council indicates that “the principle (of special and differential treatment for developing and least-developed countries) should extend beyond the granting of traditional transition periods for implementing commitments. In particular, the extent and the timing of entering into commitments shall be related to the implementation capacities of developing and least-developed Members.” The objective of this study is to offer reflections on how special and differential treatment for trade facilitation may be shaped by the cost implications of measures included in the future agreement. It is based on findings of OECD work on the costs of trade facilitation measures, which confirms that different countries – even at an equivalent level of development – face different situations and present differing implementation capacities, and points to the relative complexity of implementation of the different measures proposed for inclusion in a future trade facilitation agreement.

Contrary to the prevailing view that the Doha negotiations have achieved little, the authors find that on trade facilitation much progress has been made. This is particularly true in regard to action by development banks and bilateral development agencies to meet client demand for assistance in reform. Active private sector participation has been an important factor driving change. Many agencies have been involved in this work; the authors find that their roles have been consistent with their comparative advantages. As to how the international community can best support continued progress, the authors conclude in favour of a cautious approach to the imposition of new WTO obligations in the area of trade facilitation. On the whole, this is the approach the WTO has taken, e.g., by limiting its negotiations on trade facilitation to several specific provisions of the GATT. The WTO can continue to function as a catalyst for reform; it is perhaps uniquely placed to relate the trade facilitation agenda to the overall trade agenda. On design and construction of the relevant infrastructures and capacities to spur development, the development institutions, including bilateral agencies, should continue to lead. The authors find little evidence to support the need for a comprehensive new “platform” or mechanism to channel trade-related aid as part of implementation of any new agreement at the WTO on trade facilitation. They recommend, however, that an innovative approach to using the well established, but under utilized Trade Policy Review Mechanism be considered to increase transparency on where new aid is going over time and to expand understanding of where and how country-based progress has been achieved.