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Promoting Efficiency in Services

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.

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Promoting Efficiency in Services

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  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 manufacturingTime as a Trade Barrier

  3. Impact of Services Barriers on Effective Rates of Protection (ERP) inAgriculture 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) inManufacturing Manufacturing India Chile Albania Venezuela  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!

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