Skip to main content
Article thumbnail
Location of Repository

Quantitative Assessment of the Benefits of Trade Facilitation

By Peter Walkenhorst and Tadashi Yasui


Trade transaction costs (TTCs) related to border procedures vary depending on the efficiency and integrity of interacting businesses and administrations, the characteristics or kind of goods, and the size and type of businesses. Total costs may be seen as being composed of directly incurred costs, such as expenses relating to supplying information and documents to the related authority, and indirectly incurred costs, such as those arising from procedural delays. Empirical studies suggest that directly and indirectly incurred TTCs each amount to 1-15 per cent of traded goods’ value. Moreover, empirical evidence suggests that TTCs for agro-food products are higher than those for manufactured goods, as agro-food shipments are subject to special border procedures, such as sanitary and phyto-sanitary controls. Also, small and medium-sized enterprises face cost-disadvantages. In light of this diversity in TTCs, the potential for the realisation of benefits from trade facilitation varies across countries, sectors, and types of traders. In cases where best practices are already applied, further efficiency gains will be difficult to achieve. But if border clearance costs are substantially above those encountered under best practices, room for improvement through suitable measures of trade facilitation will tend to exist. The model-based analysis of the economic impacts of trade facilitation carried out in this study differs from earlier research by taking several salient features of import and export procedures into account. In particular, the differing characteristics of direct and indirect TTCs are represented, and country-specific differences in trade facilitation potential are reflected according to empirical information on border waiting times and survey-based evidence on the quality of border processes. In addition, the higher TTCs for agro-food products and small and medium-sized enterprises are incorporated into the analysis. The analysis does not evaluate the economic and trade impact of specific trade facilitation measures or instruments, such as those that might result from a possible future WTO agreement on trade facilitation. Instead, the aim of the assessment is to better represent empirical characteristics of the border process in model-based analysis and to identify those features that crucially affect the results and that, therefore, deserve to be further explored in future analysis. Several scenarios of hypothetical, multilateral trade facilitation efforts are evaluated, focusing on the comparison of scenarios rather than the overall welfare gains that might result from trade facilitation.Trade facilitation, customs procedures, documentary requirements, waiting times, CGE modelling

OAI identifier:

Suggested articles


  1. (2001). Dynamic Effects of the 'New Age' Free Trade Agreement between Japan and Singapore."
  2. (2001). E-Commerce and Development Report.”
  3. (2002). Economic Co-operation),
  4. Economic Co-operation), 2003a. “Selection of Trade Facilitation Actions and Measures by Member Economies."
  5. (2002). Economic Forum),
  6. (2002). External Trade Organization),
  7. (2002). Global Corruption Report.
  8. (1997). Global Trade Analysis: Modeling and Applications. New York and Melbourne:
  9. (2002). Impediments to Free Trade: The Case of Trucking and NAFTA in the U.S.-Mexican
  10. (2001). International Supply Chain Management and Customs – Peru: a Case Study.” World Bank report,
  11. (2001). Jamaica Customs Automated Services Online.” World Bank project report,
  12. (2003). Measuring Border Crossing Costs and their Impact on Trade Flows: The United States-Mexican Trucking Case.” Paper presented at the 6 th conference on global economic analysis,
  13. (2001). Nations Centre for Trade Facilitation and Electronic Business),
  14. (2003). OECD (Organisation for Economic Co-operation and Development),
  15. (2001). Philippine Customs Reform.” World Bank project report,
  16. (2003). Reducing Trading Costs in a New Era of Security.”
  17. (1971). States National Committee on International Trade Documentation),
  18. (1998). The Comprehensiveness of APEC's Free Trade Commitment”, Session VIII in The Economic Implications of Liberalizing, Publication 3101,
  19. (1987). The Cost of “Non-Europe: An illustration in the Road Haulage sector”, in:
  20. (2001). Time as a trade barrier." Working Paper,
  21. (2003). Trade Facilitation and Economic Development: Measuring the Impact. World Bank Policy Research Working Paper No. 2988,
  22. (2001). Trade Facilitation Experience Paper by Costa Rica." Council of Trade
  23. (2001). Trade Facilitation Lending by the World Bank – Recent Experience, Research, and Capacity Building Initiatives.” Paper Prepared for the Workshop on Technical Assistance and Capacity Building in Trade Facilitation
  24. (2002). Trade Facilitation: Impact and Potential Gains.
  25. (2003). Trade Organization),
  26. (2003). Trade Procedures Council),
  27. (2001). Trade, Growth and Poverty. World Bank Working Paper Series No. 2615,
  28. (2003). Transport and Trade Facilitation Issues in the CIS-7, Kazakhstan and Turkmenistan.
  29. (2002). World Competitiveness Yearbook.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.