Trade facilitation and its effects on Chile’s bilateral trade between 2006 and 2014

Abstract

This study analyses the effects of trade facilitation on Chilean exports in 2006-2014. It reviews evidence and studies on trade facilitation and its effects, mainly in South America; and it analyses Chile's export basket. An extended gravity model is then estimated for Chile's bilateral trade flow with 89 countries, to measure the effect of trade facilitation during the period analysed. The estimation is performed using static panel data with fixed, random and dynamic effects. The key results show that the estimation that best describes Chile's export behaviour is that which uses static panel data with random and dynamic effects and two lags of the dependent variable (exports). They show that per-container export costs have a negative effect on this trade flow.

Trade Facilitation and Its Impacts on the Economic Welfare and Sustainable Development of the ECOWAS Region

“…The total gain in economic welfare that comes from trade facilitation to eradicate excessive compliance costs of the import process is stated in Equation (6).…”

“…Trade facilitation measures are reforms to simplify, standardize, and harmonize the laws, regulations, procedures, and processes of border movement and customs clearance of trading merchandise. The ultimate objective is to achieve a faster, more transparent, and secure system for carrying out trade transactions [5][6][7][8][9]. The decrease in time and cost of trading makes possible connections to the global production [10].…”

“…Particularly for small and medium-sized enterprises (SMEs), the lower trade administration costs associated with exports will enable more of them to be able to enter global markets. Trade facilitation improves the control and safety of a country, leading to improved business conditions that will enhance the inflow of foreign direct investment (FDI) [1,6,8,[10][11][12].…”

Impact of a Single Customs Territory in the East African Community on Tanzania’s exports

“…The impact of trade facilitation on trade movements has been widely analysed in the trade literature. Empirical literature suggests, in most cases, a positive impact of increased trade flows resulting from improved trade facilitation regardless of the measure used for trade facilitation (Darku 2009;Felipe and Kumar 2010;Fuenzalida-O'Shee et al 2018;Mahona and Mjema 2014;Oparanya et al 2019;Perez and Wilson 2010;Shinyekwa and Othieno 2013;Spence and Karingi 2011). In these studies, extended versions of gravity models are used for analysing various impacts and outcomes of trade facilitation on trade movements in emerging markets, intra-country trade within a region, and a country's international trade with other countries in the world.…”

“…Some studies have used a combination of qualitative and quantitative approaches in assessing trade facilitation impacts(Bifwoli 2016; Chimilila et al 2014;Nabatanzi 2015) whereas others have focused on quantitative approaches(Ahmed et al 2018;Bal et al 2017;Baniya et al 2019;Darku 2009;Felipe and Kumar 2010;Fuenzalida-O'Shee et al 2018;Mahona and Mjema 2014;Perez and Wilson 2010;Spence and Karingi 2011;Tosevska-Trpcevska 2014;Wilson 2010; …”