Promoting Efficiency in Services

1
Promoting Efficiency in Services

• Raed Safadi, OECD
• OECD Global Forum on Trade A trade policy
  dialogue on the multiple dimensions of market
  access and development
• Mexico City, 23-24 October 2006

2
Impact of services barriers on effective rates
of protection (ERP) in agriculture and
manufacturing Time as a Trade Barrier
3
Impact of Services Barriers on Effective Rates of
Protection (ERP) in Agriculture
Agriculture
Russia
India
Venezuela
Zambia
Chile
ERP1 ERP2 ERP3
ERP1 ERP2 ERP3  
ERP1 ERP2 ERP3  
ERP1 ERP2 ERP3  
ERP1 ERP2 ERP3  
cereals
() () ()
() (-) (-)
() () ()
() (-) (-)
() () ()
oil seeds plants
() () ()
() () (-)
() () (-)
(-) (-) (-)
() (-) (-)
meat fish
() () (-)
() () (-)
() () (-)
() (-) (-)
(-) (-) (-)
milk dairy
(-) (-) (-)
() (-) (-)
() () (-)
() () ()
(-) (-) (-)
vegetable oils fat
() () ()
() () ()
() (-) (-)
() () ()
() (-) (-)
sugar
() () ()
(-) (-) (-)
() () ()
(-) (-) (-)
(-) (-) (-)
beverages tobacco products
() () (-)
() (-) (-)
() () ()
() (-) (-)
(-) (-) (-)
food products nec
() () ()
(-) (-) (-)
() () ()
() (-) (-)
() (-) (-)
4
Impact of Services Barriers on Effective Rates
of Protection (ERP) in Manufacturing
Venezuela
Albania
Chile
India
Manufacturing
ERP1 ERP2 ERP3  
ERP1 ERP2 ERP3  
ERP1 ERP2 ERP3  
 ERP1 ERP2 ERP3
() () (-)
() () ()
(-) () (-)
() () (-)
forestry wood products
() (-) (-)
() () ()
() () (-)
() () (-)
mineral products
() () (-)
() () (-)
(-) (-) (-)
textiles
() () ()
() () ()
() () ()
(-) (-) (-)
() () (-)
chemical, rubber, plastic prods
() () (-)
() () ()
() (-) (-)
(-) (-) (-)
mineral products
() () (-)
() (-) ()
() () (-)
base metals metals
() () (-)
() () ()
() (-) (-)
() (-) (-)
() () (-)
motor vehicles parts
(-) (-) (-)
() () ()
() () ()
() (-) (-)
transport equipment
(-) (-) (-)
(-) (-) (-)
() (-) (-)
(-) (-) (-)
electronic equipment
() () ()
(-) (-) (-)
(-) (-) (-)
() () (-)
machinery equipment
() () ()
() (-) (-)
(-) () (-)
() () ()
manufacturers
5
Time as a trade barrier Motivation
Tariffs facing developing countries in
manufacturing
Source MacMap
Source WTO
6
Are the main trade barriers behind the border?

• JIT
• Lean retailing
• Offshoring
• Supply chain management
• Containerization
• Speed and scale in trade

Source World Bank
7
Import content of exports
Source GTAP
8
Empirical analysis

• Sectors
• Total merchandise (benchmark)
• Intermediate industrial products
• Electronics
• Fashion clothing
• Countries
• Importers Australia, Japan, UK
• Exporters All countries
• Key variables of interest
• Time for exports
• Control of corruption
• Model Gravity model

9
Probability to export and time for exports
10
The impact on exports of a 10 improvement in the
control of corruption index
11
Time and export volumes increase in exports
following 10 reduction in time for exports
12
Policy implications - preliminaries

• Excessive time for exports and imports
  constitutes an export market entry barrier for
  entrepreneurs in low-income countries and a
  disincentive to invest in product quality
• Time for exports and imports depends on a
  logistics chain including testing, freight
  forwarding, transport, port services, customs
  services, inventory management, tracking
• The activities in the logistics chain are
  complementary
• It is time relative to competitors not absolute
  time that matters

13
Policy implications cont.

• Identify and focus reform on bottlenecks in the
  logistics chain
• Logistics and the DDA
• Trade facilitation
• GATS liberalisation of transport, communication,
  logistics and business services
• Aid for trade
• Well-designed special economic zones can be a
  first step when investment needed for adequate
  country-wide infrastructure is beyond the
  (aid-augmented) resources of the country in the
  short term.
• Reforms are urgently needed!