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Trade Hallucination:
Risks of Trade Facilitation and Suggestions for Implementation
Jeronim Capaldo
GDAE Working Paper 14-02
June 2014
Download the Working Paper

The WTO Agreement on Trade Facilitation crowned a year of big numbers. Official predictions put expected gains to $1 trillion but ignored its costs.

When all assumptions underlying official figures are brought to light, large expected gains appear unreasonable. At the same time, estimated employment benefits may easily turn into net losses.

With fundamental uncertainty surrounding its effects, implementing trade facilitation without enhancing systems of social protection would be ill advised. Indeed, the net effect of trade facilitation may depend on the social policies it is complemented with.

While trade facilitation may bring extra business to import-export firms, it is not a feasible or sustainable growth strategy for all countries and it cannot be expected to deliver growth to the global economy.

Download the Trade Hallucination: Risks of Trade Facilitation and Suggestions for Implementation

Further Analysis:

Support to WTO Trade Facilitation Agreement is Insufficient or Misdirected, Jeronim Capaldo, GDAE Policy Brief, July 25, 2014

Will the WTO fast-track trade at the expense of food security?, Timothy A. Wise and Jeronim Capaldo, Al Jazeera, July 24, 2014

The Uncertain Gains from Trade Facilitation, Jeronim Capaldo, GDAE Policy Brief 13-02 December 2013

Read more on Modeling Policy Reform
Read more from GDAE’s Globalization and Sustainable Development Program

The Global Development and Environment Institute’s Globalization and Sustainable Development Program examines the economic, social and environmental impacts of economic integration in developing countries, with a particular emphasis on the WTO and NAFTA's lessons for trade and development policy. The goal of the program is to identify policies and international agreements that foster sustainable development.

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