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AIDFORTRADE
AT A GLANCE
2015
REDUCING TRADE COSTS
FOR INCLUSIVE,
SUSTAINABLE GROWTH
AIDFORTRADE
AT A GLANCE 2015
REDUCING TRADE COSTS
FOR INCLUSIVE,
SUSTAINABLE GROWTH
 The opinions expressed and arguments employed herein do not necessarily reflect the official views of the OECD member countries or of
the World Trade Organization or its members.

This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of
international frontiers and boundaries and to the name of any territory, city or area.

Please cite this publication as:

OECD/WTO (2015), Aid for Trade at a Glance 2015: Reducing Trade Costs for Inclusive, Sustainable Growth, OECD Publishing, Paris,
http://dx.doi.org/10.1787/aid_glance-2015-en.
ISBN WTO: 978-92-870-4019-0
ISBN OECD: 978-92-642-3580-9 (print); 978-92-642-3579-3 (e-book/PDF format)

Biennial:
ISSN 2223-4403 (print)
ISSN 2223-4411 (online)

Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda

© OECD, WTO 2015

You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and
multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledg-
ment of OECD and WTO as source and copyright owner is given. All requests for public or commercial use and translation rights should
be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be
addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie
(CFC) at [email protected].

2 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 FOREWORD

This joint OECD/WTO Aid for Trade at a Glance is a timely publication in a landmark year. From it a strong message emerges
about the importance of trade and the multilateral trading system in delivering economic growth and development.
It reminds us that high trade costs are a drag on economic development and trade integration, in particular for the
poorest. Its call to action should resonate at the WTO’s December 2015 Ministerial Conference in Nairobi, Kenya -
the first WTO Ministerial Conference to be held in Africa. It is a message that should also echo in the UN’s Post -2015
Development Agenda and negotiations on its financing.

High trade costs hamper the economic potential of many of the poorest nations, pricing them out of global markets.
Landlocked, remote, and small economies are marginalized by costs that reflect geography, not capability. Of particular
concern is the stubbornly high level of trade costs for agricultural products. Trade costs also fall disproportionately
heavily on small- and medium -sized enterprises. These companies are an engine of employment the world over and
offer a route out of poverty, particularly for women.

An important step towards reducing trade costs was taken in 2013 at the Ninth WTO Ministerial Conference in Bali
where Members concluded the Agreement on Trade Facilitation. Implementation of the Agreement promises to
bring substantial cost reductions for traders in developing and least developed countries (LDCs), thereby supporting
increased economic activity, and potentially increasing government revenues. Sustained donor support will be needed
to assist developing countries if the Agreement is to deliver its full potential. The Trade Facilitation Agreement was only
one of a number of decisions taken at the Bali meeting to support the integration of developing countries and LDCs
into the global economy. Implementing these other commitments also remains a priority.

Since the start of the Aid -for -Trade Initiative, donors have disbursed a total of USD 264.5 billion in official development
assistance and an additional USD 190 billion in other official flows for financing trade-related programmes in developing
countries. This publication, and in particular the case stories that beneficiaries submitted, shows that these programmes
have improved trade performance, generated employment, including for female workers, and attracted further
domestic and foreign investment. The development benefits of reducing trade costs are impressive: a 1% decrease
in global trade costs would increase global income by USD 40 billion at a minimum, with close to two-thirds of this
amount accruing to developing countries, according to OECD calculations.

Focusing the Aid-for-Trade Initiative more firmly on reducing trade costs offers an action orientated agenda; and – more
importantly – one that would make growth more inclusive. Governments, in dialogue with stakeholders, must now
work to identify the most distorting trade costs, how best to reduce them, and how to use effectively the different
development finance instruments offered by a wide range of providers. Reducing trade costs is an agenda where the
private sector has much to offer and the development community much to learn. It is also an agenda that will maximise
the contribution of trade to delivering the sustainable development outcomes that are envisaged in the emerging
Sustainable Development Goals.

Angel Gurría Roberto Azevêdo

Secretary-General Director-General
OECD WTO

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 3
 ACKNOWLEDGEMENTS

Aid for Trade at a Glance: Reducing Trade Costs for Inclusive, Sustainable Growth was prepared under the aegis of the OECD
Development Assistance Committee and Trade Committee in close co-operation with the WTO Committee on Trade
and Development.

The OECD and WTO Secretariats would like to express their appreciation to all the governments, intergovernmental
organisations, nongovernmental organisations and private firms that participated in the fifth aid for trade monitoring
exercise.

The report has been prepared under the overall guidance of Frans Lammersen (OECD) and Michael Roberts (WTO).
Managerial support was provided by Brenda Killen and Ken Ash (OECD) and Shishir Priyadarshi (WTO).

In addition to the OECD and the WTO, contributions were provided by the World Bank (Chapter 2 with Jean Francois
Arvis, Ben Shepherd, Marcus Bartley Johns as the main authors), the Executive Secretariat of the Enhanced Integrated
Framework, (Chapter 5 with Ratnakar Adhikari as the main author), the International Trade Centre (Chapter 7 with Marion
Jansen as the main author), the United Nations Conference on Trade and Development (Chapter 9 with Miho Shirotori as
the main author), and the World Economic Forum (Chapter 10 with Attilio Di Battista as the main author).

In addition, the following persons are acknowledged Ann Gordon, Masato Hayashikawa, William Hynes, Raundi Halvorson-
Quevedo (Javier Lopez Gonzales, Julien Gourdon, Przemyslaw Kowalski, all authors Chapter 6), Evdokia Moïsé, Silvia
Sorescu and Trudy Witbreuk, (all OECD); Deborah Barker, Poonam Bhikha, Rainer Lanz, Barbara Marcetich, Théo Mbise,
Sheri Rosenow,Aileen Yang, Sainabou Taal (all WTO);James Edwin, Liliana Núñez Giordano, Justine Namara; Constanze
Schulz and, and Sabrina Varma (all EIF): Abdellatif Benzakri, Yvan Decreux, Christophe Durand, Lionel Fontagné, Ursula
Hermelink, Mathieu Loridan, Hema Menon, Jasmeer Virdee, Matthew Wilson, Mohammad Saeed and Audrey Sarrazin
(all ITC); Ralf Peters, Christian Knebel, Marina Murina, Rolf Traeger, Simonetta Zarrilli, and Raul Javaloyez (all UNCTAD);
Anasuya Raj (World Bank) Francesca Bianchi, Sean Doherty, Thierry Geiger and Anderson Tracastro (all WEF).

The report was edited by Richard Venturi and designed by Peggy Ford-Fyffe King. The team was assisted by
Nicoló Bandera and Susan Hodgson (OECD)

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 5
 TABLE OF CONTENTS

FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
ACKNOWLEDGEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ACRONYMS AND ABBREVIATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
EXECUTIVE SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Monitoring aid for trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Who participated in the monitoring exercise? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
The structure of the report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

CHAPTER 1 WHY TRADE COSTS MATTER FOR INCLUSIVE,

Contributed by the SUSTAINABLE GROWTH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
World Trade Organization Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
What are trade costs? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Lower trade costs mean more trade and potentially higher incomes.. . . . . . . . . . . . 51
Trade cost reductions have distributional impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Aid for trade is helping to reduce trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59

CHAPTER 2 HOW ARE TRADE COSTS EVOLVING AND WHY?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Contributed by the World Bank Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
Trade costs drive competitiveness and trade performance. . . . . . . . . . . . . . . . . . . . . . . 62
Trade costs are higher in lower income countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Experience differs within the developing world . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
Various policies are available to reduce trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76

CHAPTER 3 AID-FOR-TRADE POLICIES, PRIORITIES AND PROGRAMMES . . . . . . . . . . . . . 83

Contributed by the Organisation Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
for Economic Co-operation Aid-for-trade disbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
and Development
Results from aid-for-trade programmes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Aid-for-trade priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Aid-for-trade commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 7
TABLE OF CONTENTS

CHAPTER 4 IMPLEMENTING THE TRADE FACILITATION AGREEMENT . . . . . . . . . . . . . . . . 109

Contributed by the Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
World Trade Organization
The Agreement on Trade Facilitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
Implementation needs and opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Implementation support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

CHAPTER 5 REDUCING TRADE COSTS FOR LEAST DEVELOPED COUNTRIES . . . . . . . . . 133

Contributed by Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
the Executive Secretariat for the
Salience of trade costs for LDCs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Enhanced Integrated Framework
LDCs’ priorities in addressing trade costs: then and now. . . . . . . . . . . . . . . . . . . . . . . . 145
Drivers of change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Aid-for-trade programmes to reduce trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Lessons learned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

CHAPTER 6  ONNECTING TO VALUE CHAINS: THE ROLE OF TRADE COSTS

C
Contributed by the Organisation AND TRADE FACILITATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
for Economic Co-operation Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
and Development
The global and regional dimensions to value chains . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
A regional perspective on trade costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Regional initiatives on trade facilitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Regional co-operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

CHAPTER 7 HOW AID FOR TRADE HELPS REDUCE THE BURDEN

Contributed by OF TRADE COSTS ON SMES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
the International Trade Centre Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
The private sector view on trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Addressing obstacles to trade for SMEs: Finding the buyer. . . . . . . . . . . . . . . . . . . . . . 202
Addressing obstacles to trade for SMEs: Delivering to the buyer. . . . . . . . . . . . . . . . 206
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

8 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 TABLE OF CONTENTS

CHAPTER 8 DEEPENING PRIVATE SECTOR ENGAGEMENT IN AID FOR TRADE . . . . . . . 217

Contributed by the Organisation Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
for Economic Co-operation
The changing context of public-private co-operation for development . . . . . . . . 218
and Development
How are OECD countries promoting private sector engagement? . . . . . . . . . . . . . 220
The elusive quest for inclusive growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224
Aid for building productive capacities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Working with and through the private sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Assessing donor support for promoting the private sector. . . . . . . . . . . . . . . . . . . . . . 231
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233

CHAPTER 9 TRADE IN THE POST-2015 DEVELOPMENT AGENDA . . . . . . . . . . . . . . . . . . . . . . 237

Contributed by the Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
United Nations Conference
Trade in the framework of the Sustainable Development Goals. . . . . . . . . . . . . . . . 238
on Trade and Development
Trade as a means of implementing Sustainable Development Goals. . . . . . . . . . . 244
How does trade help LDCs achieve SDGs?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248
What will be the implications for the Aid for Trade initiative?. . . . . . . . . . . . . . . . . . . . 251
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253

CHAPTER 10 BUSINESS PERSPECTIVES ON BOOSTING TRADE AND INVESTMENT. . . 257

Contributed by the Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258
World Economic Forum
Monitoring progress: the enabling trade index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
Examples of company-led efforts to reach trade tipping points . . . . . . . . . . . . . . . . 266
Collaborative efforts at implementation: lessons learnt. . . . . . . . . . . . . . . . . . . . . . . . . . 267
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270

CHAPTER 11 THE WAY FORWARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273

Contributed by the Organisation Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274
for Economic Co-operation
Achievements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274
and Development and
Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
the World Trade Organization
Strengthening the Initiative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 9
TABLE OF CONTENTS

AID-FOR TRADE COUNTRY PROFILES . . . . . . . . . . . . 281 Madagascar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350

Explanatory notes on Aid-for-trade Malawi. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352
country profiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 Mali. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354
Afghanistan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290 Mauritius . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356
Antigua and Barbuda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358
Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 Mongolia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360
Belize. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 Nepal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362
Benin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298 Nigeria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364
Bhutan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366
Botswana. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302 Panama. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368
Burkina Faso. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304 Papua New Guinea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370
Cambodia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306 Paraguay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372
Cameroon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .374
Central African Republic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310 Rwanda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376
Chad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .312 Saint Lucia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378
Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 Saint Vincent and the Grenadines. . . . . . . . . . . . . . . . . . . . . 380
Côte d’Ivoire. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .316 Samoa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382
Comoros . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .318 São Tomé Príncipe . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 384
Democratic Republic of the Congo. . . . . . . . . . . . . . . . . . . 320 Senegal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386
Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 Sierra Leone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388
Dominica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324 Solomon Islands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390
Dominican Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 Swaziland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392
El Salvador. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 Tanzania. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394
Gambia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 Thailand. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396
Grenada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 Togo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398
Guatemala. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Tonga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Guinea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336 Trinidad and Tobago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
Guinea-Bissau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338 Tunisia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404
Haiti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340 Uganda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406
Honduras. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342 Vanuatu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344 Yemen. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410
Lao People’s Democratic Republic. . . . . . . . . . . . . . . . . . . . 346 Zimbabwe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412
Lesotho. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348

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STATISTICAL NOTES ON KEY DATA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415

ANNEX A AID FOR TRADE KEY DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419
Table A.1 Aid for Trade by category. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419
Table A.2 Aid for Trade by category and by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420
Table A.3 Aid for Trade by category and by income group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421
Table A.4 Aid for Trade by individual provider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422
Table A.5 Top 20 providers of aid for trade in 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423
Table A.6 Aid for Trade by individual recipient country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424
Table A.7 Top 20 recipients of aid for trade in 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
Table A.8 Aid for Trade regional and global programmes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428
Table A.9 Aid for Trade regional and global programmes by category. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428
Table A.10 Aid for Trade grants and loans by category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429
Table A.11 Aid for Trade channels of delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429
Table A.12 Aid for Trade shares in sector allocable and total ODA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429
Table A.13 Aid for Trade by donor and by category, Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430
Table A.14 Aid for Trade by donor and by category, Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432
Table A.15 Aid for Trade by donor and by region, Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434
Table A.16 Aid for Trade by donor and by region, Disbursements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437
Table A.17 Aid for Trade by donor and by income group, Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .440
Table A.18 Aid for Trade by donor and by income group, Disbursements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443
Table A.19 Trade related other official flows by category. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445
Table A.20 Trade related other official flows by individual provider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .446
Table A.21 Trade related other official flows by individual recipient. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .447
Table A.22 Trade related other official flows share in sector allocable and total OOF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450

ANNEX B DAC LIST OF ODA RECIPIENTS BY INCOME GROUP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451

ANNEX C DAC LIST OF ODA RECIPIENTS BY REGION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453
ANNEX D AID-FOR-TRADE RELATED CRS PURPOSE CODES BY CATEGORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455

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TABLES, FIGURES AND BOXES

INTRODUCTION
Tables
Table 0.1 Responses to the aid-for-trade questionnaire. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table 0.2 Partner country responses to the aid-for-trade questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Table 0.3 Donor country responses to the aid-for-trade questionnaire. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Table 0.4 Providers of South-South co-operation responses to the aid-for-trade questionnaire. . . . . . . . . . . . . . . . 33
Table 0.5 Regional and transport corridor questionnaire. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Figures
Figure 0.1 Questionnaires by respondents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Figure 0.2 Case stories by sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

CHAPTER 1
Figures
Figure 1.1 Population living on less than USD 2 per day (2008-12) and number of days
needed to export (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Figure 1.2 Doing Business costs to export, USD per container, 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Figure 1.3 Average number of days required to export by income group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Figure 1.4 Correlation between improvement in logistics performance and GDP growth rate. . . . . . . . . . . . . . . . . 39
Figure 1.5 What contribution can reducing trade costs make to inclusive, sustainable growth? . . . . . . . . . . . . . . . . 39
Figure 1.6 Types of trade costs in goods markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Figure 1.7 Changes in road governance conditions 2010-2013 in West Africa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Figure 1.8 Policies affecting trade costs in goods markets at all points in the supply chain. . . . . . . . . . . . . . . . . . . . . 46
Figure 1.9 Number of partner country respondents indicating important sources of trade costs (goods). . . . . . . 47
Figure 1.10 Number of donor country respondents indicating important sources of trade costs (goods). . . . . . . . 47
Figure 1.11 Trade in services under the GATS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Figure 1.12 Partial typology of policy measures affecting trade costs in services (the GATS mode of supply). . . . 49
Figure 1.13 Importance of trade costs sources (services): partner country view. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Figure 1.14 Importance of trade costs sources (services): donor view. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Figure 1.15 Impacts from actioins to reduce trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Figure 1.16 Trade and GDP gains from reducing supply chain barriers to trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Figure 1.17 Outputs achieved by actions taken to reduce trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Figure 1.18 Outcomes achieved by actions to reduce trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Figure 1.19 Impacts achieved by actions to reduce trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Figure 1.20 Actions that have achieved the most positive results in reducing trade costs . . . . . . . . . . . . . . . . . . . . . . . 57

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Boxes
Box 1.1 Why trade costs matter to some least developed countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Box 1.2 What sets transport costs apart from tariffs?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Box 1.3 Services trade costs – more research required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Box 1.4 The Pacific Agreement on Closer Economic Relations (PACER) Plus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Box 1.5 Examples of trade costs associated with product standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Box 1.6 Empirical evidence on the relative trade impacts of lower trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Box 1.7 Managing aid-for-trade projects for inclusive growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

CHAPTER 2
Tables
Table 2.1 Regional trade costs matrix for manufacturing, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
Figures
Figure 2.1 Percent change in trade costs versus percent change in merchandise exports, 1995-2012. . . . . . . . . . . 62
Figure 2.2 Trade costs in manufacturing relative to agriculture versus manufactures exports
as a proportion of total merchandise exports, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Figure 2.3 Trade costs in manufacturing versus GVC participation index, 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Figure 2.4 Structure of Logistics Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Figure 2.5 Partner country impacts associated with actions taken to reduce costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Figure 2.6 Trade costs in manufacturing, 1996 and 2010, by income group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Figure 2.7 Trade costs in agriculture, 1996 and 2010, by income group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Figure 2.8 Trade costs in manufacturing, 1996 and 2010, by region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Figure 2.9 Trade costs in manufacturing, 1996 and 2010, by landlocked versus other developing countries. . . . 72
Figure 2.10 Logistics Performance Index score versus trade costs, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Figure 2.11 Linear Shipping Connectivity Index versus trade costs, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Figure 2.12 Cost of market entry versus trade costs, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Figure 2.13 Trade costs for country pairs not in an RTA versus in the same RTA, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
Figure 2.14 Policy dimensions and income levels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Figure 2.15 GDP per capita and aggregate trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Figure 2.16 Trade costs in manufacturing, 1996 and 2010, landlocked versus other developing countries . . . . . . . 80
Figure 2.17 Actions in partner countries to reduce trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Figure 2.18 Key factors in achieving trade cost reductions in partner countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Boxes
Box 2.1 Outcomes of lower trade costs – what partner countries say . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Box 2.2 Trade and Transport Facilitation Assessment (TTFA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

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CHAPTER 3
Figures
Figure 3.1 Aid for Trade share by category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Figure 3.2 Trade-related OOF share by category. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Figure 3.3 Aid for Trade disbursements by region and income group, 2006-2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Figure 3.4 Trade-related OOF disbursements by region and income group, 2006-2013. . . . . . . . . . . . . . . . . . . . . . . . . 87
Figure 3.5 Aid for Trade: Top 10 recipients. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Figure 3.6 Trade-related OOF: Top 10 recipients. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Figure 3.7 Aid for Trade: Top 10 aid providers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Figure 3.8 Trade-related OOF: Top 10 providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Figure 3.9 Theory of Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Figure 3.10 Aggregate findings (impacts) from the public and private sector case studies. . . . . . . . . . . . . . . . . . . . . . . 94
Figure 3.11 Donor aid-for-trade priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Figure 3.12 Partner priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Figure 3.13 Aid for Trade by category. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Figure 3.14 Aid for Trade by region, commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Figure 3.15 Aid for Trade by income group, commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Figure 3.16 Trade-related OOF by sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Figure 3.17 Trade-related OOF by region, commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Figure 3.18 Trade related OOF by income group, commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

CHAPTER 4
Tables
Table 4.1 WTO needs assessments conducted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
Table 4.2 Measures that are high-priority for support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Table 4.3 Largest Trade Facilitation Projects, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Table 4.4 Trade facilitation by donors, 2002-2005 and 2010-2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Table 4.5  Difficulties developing countries expect to face in securing aid-for-trade support
for Trade Facilitation Agreement implementation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Figures
Figure 4.1 Trade facilitation commitments, 2002-2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Figure 4.2 Trade facilitation disbursements, 2002-2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Figure 4.3 Trade facilitation commitments by region, 2002-2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Boxes
Box 4.1 Savings from single windows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
Box 4.2 Trade facilitation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113
Box 4.3 The Viet Nam Trade Facilitation Alliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Box 4.4 Case stories – wider impacts from implementation of TFA measures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Box 4.5 Trade Facilitation in Lao People’s Democratic Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

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Box 4.6 Accessing regional trade facilitation support - the case of Gambia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Box 4.7 Nicaragua and Trade Facilitation Agreement implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Annexes
Annex 4.A1 Third Party Monitoring: Sources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

CHAPTER 5
Tables
Table 5.1 Commodity-exporting LDCs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Table 5.2 List of fragile states and their sub-regions, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Table 5.3 Changes in the Logistic Performance Index for the top ten performing LDCs, 2007-14. . . . . . . . . . . . . . 145
Table 5.4 Evolution of trade costs in LDCs based on DTIS, 2002-14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Table 5.5 Evolution of LDCs’ priorities in relation to reducing trade costs, 2002-14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Figures
Figure 5.1 LDCs’ costs of exporting and importing, 2005-214. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Figure 5.2 Cost of exporting and importing from LDCs in the Central Africa sub-region, 2005-2014. . . . . . . . . . . 138
Figure 5.3 Costs of exporting and importing from LDCs in South Asia sub-region, 2005-2014 . . . . . . . . . . . . . . . . . 139
Figure 5.4 Export and import costs of landlocked LDCs vis-à-vis coastal LDCs, 2005-2014. . . . . . . . . . . . . . . . . . . . . . 140
Figure 5.5 Cost of exporting for commodity-exporting LDCs, 2005-14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Figure 5.6 Costs of exports in fragile states, their sub-regions and LDCs, 2005-14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Figure 5.7 Disbursements, developing countries ­- LDCs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Figure 5.8 Shares of aid for trade disbursement for nine LDC sub-groups, 2006-13. . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Figure 5.9 Aid for Trade to East Africa and South Asia sub-regions (disbursements) . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
Annexes
Annex 5.A1 Regional sub-groupings of the LDCs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

CHAPTER 6
Tables
Table 6.1 Trade-weighted trade costs by region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Table 6.2 Question to recipients of Aid for Trade on sources of trade costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Figures
Figure 6.1 Average GVC participation index by region over 1996-2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Figure 6.2 Average intra and extra-regional participation in GVCs across regions in 2011. . . . . . . . . . . . . . . . . . . . . . 168
Figure 6.3 Relative contributions of non-policy and policy factors in participation ratio. . . . . . . . . . . . . . . . . . . . . . . 169
Figure 6.4 The estimated impact of other policies on GVC integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Figure 6.5 Trade costs across regions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Figure 6.6 Infrastructure quality in regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174
Figure 6.7 TFIs and geographic country groups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Figure 6.8 Potential reduction in trade costs by regional grouping (%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Figure 6.9 Aid flows for trade facilitation and infrastructure from 2004-13 by regions. . . . . . . . . . . . . . . . . . . . . . . . . . 179

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Boxes
Box 6.1 Greater Mekong Sub-region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Box 6.2 Transport in ECOWAS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Box 6.3 Border post between India and Pakistan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
Box 6.4 CAREC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
Box 6.5 Joint Border Posts in ECOWAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
Box 6.6 Brazil’s foreign trade mapping. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
Box 6.7 The TIM Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
Annexes
Annex 6A.1 Drivers of participation by income group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Annex 6A.2 Policy-related drivers of value-added flows in a gravity setting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188

CHAPTER 7
Tables
Table 7.1 Maximum number of employees according to national SME definitions, selected countries . . . . . . . 192
Table 7.2 The importance of SMEs for trade and economic activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Table 7.3 List of surveyed countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
Figures
Figure 7.1 Firm level turnover versus number of employees: densities according to export status. . . . . . . . . . . . 194
Figure 7.2 How have the following aspects of trade costs evolved over the past five years?. . . . . . . . . . . . . . . . . . . 195
Figure 7.3 What are the three factors in which you would most value improvements:
SMEs versus large firms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Figure 7.4 What are the three factors related to border procedures in which you would most
value improvements? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Figure 7.5 Exporters affected by non-tariff measure-related obstacles, by sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
Figure 7.6. Types of burdensome non-tariff measures applied by partner countries by sector. . . . . . . . . . . . . . . . . . 199
Figure 7.7 Exporters affected by non-tariff measure-related obstacles, by company size. . . . . . . . . . . . . . . . . . . . . . 200
Figure 7.8 Share of cases of burdensome non-tariff measures versus share of exports
across trading partners, by sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Figure 7.9 Reasons making non-tariff measures burdensome for exporters, by sector. . . . . . . . . . . . . . . . . . . . . . . . . 201
Figure 7.10 Procedural obstacles related to non-tariff measures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
Figure 7.11 Description of Trade Support Institutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
Figure 7.12 Components of trade costs in which TSI would most value improvements . . . . . . . . . . . . . . . . . . . . . . . . 203
Figure 7.13 Factors related to border procedures in which TSI would most value improvements . . . . . . . . . . . . . . . 204
Figure 7.14 A list of services a TSI might offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Figure 7.15 Log of exports of goods and services per capita versus the log of TPO budgets per capita. . . . . . . . . 205
Figure 7.16 Voluntary sustainability standards: a snapshot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
Figure 7.17 Comparison of cotton standards using ITC Standards Map. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208

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CHAPTER 8
Figures
Figure 8.1 Donor approaches for promoting private sector development (PSD). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222
Figure 8.2 Key focus areas of donor support for PSD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Figure 8.3 ODA Committed to Building Productive Capacity (BPC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Figure 8.4 Types of support provided by donors to encourage donor company investment. . . . . . . . . . . . . . . . . . 230
Boxes
Box 8.1 CEO Summit of the Americas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222

CHAPTER 9
Tables
Table 9.1 Trade-related revenue (as % of total public revenue). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246
Table 9.2 Composition of external sources of finance, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
Figures
Figure 9.1 Six essential elements of the SDGs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
Figure 9.2 Trade – Financing Paths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244
Figure 9.3 Estimated Tariff revenues as % of GDP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244
Figure 9.4 Ad valorem equivalents of SPS, TBT and other NTMs, by sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
Figure 9.5 Contribution of the Aid-for-Trade Initiative to the post-2015 development agenda. . . . . . . . . . . . . . . . . . 252
Figure 9.6 Contribution of a reduction in trade costs to inclusive and sustainable development. . . . . . . . . . . . . . 253
Boxes
Box 9.1 Sustainable development goals as proposed by the open working group. . . . . . . . . . . . . . . . . . . . . . . . . . 239
Box 9.2.1 Trade-related targets and how they relate to the WTO provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
Box 9.2.2 Targets related to the functional nature of trade (non-exhaustive). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

CHAPTER 10
Figures
Figure 10.1 Public-Private Partnerships. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258
Figure 10.2 The most problematic factors for exporting and importing, by income group. . . . . . . . . . . . . . . . . . . . . . 259
Figure 10.3 The Enabling Trade Index framework: by type of market, sub-index and pillar. . . . . . . . . . . . . . . . . . . . . . 261
Figure 10.4 The Enabling Trade Index 2014: Income group averages and best performers. . . . . . . . . . . . . . . . . . . . . . 262
Figure 10.5 ETI score 2010 - 2014, and average aid-for-trade disbursements 2005-12 (% of GDP). . . . . . . . . . . . . . . . 263
Figure 10.6 ETI score 2014 by pillar and aid-for-trade recipient group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264
Figure 10.7 ETI pillar-4 score 2010 and 2014 and average infrastructure aid-for-trade disbursements 2005-12 . . . 265
Figure 10.8 ETI pillar-3 score 2010 and 2014 and average infrastructure aid-for-trade disbursements 2005-12. . . 265
Figure 10.9 ETI pillar-6 Score 2010 and 2014, and average ICT aid-for-trade disbursements 2005-12. . . . . . . . . . . . . 266
Boxes
Box 10.1 Business perspective: the most problematic factors for trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
Box 10.2 The Enabling Trade Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 17
 ACRONYMS AND ABBREVIATIONS
ABC Brazilian Cooperation Agency CEBAF Centros Binacionales de Atención
ACIS Advance Cargo Information System en Frontera
ADA Austrian Development Agency CGE Computable General Equilibrium
ADB Asian Development Bank CI Confidence Interval
AEC ASEAN Economic Community CIF Climate Investment Funds
AEO Authorized Economic Operator CNI Brazilian National Confederation
of Industry
AfDB African Development Bank
COMESA Common Market for Eastern and
AfT Aid for Trade Southern Africa
AfTra African Trade Fund CPMM Corridor Performance Measurement
AGOA African Growth and Opportunity and Monitoring
Act of the United States CRS Creditor Reporting System
AIM Assess, Improve and Measure CS Case Story
ALTTFP Abidjan-Lagos trade transportation CSR Corporate social responsibility
facilitation project
CSV Creating Shared Value
AMEXCID Mexican Agency for International
Development Cooperation CUTS International Consumer Unity & Trust Society
APEC Asia-Pacific Economic Cooperation DA Development Agenda
AsDB Asian Development Bank DAC Development Assistance
Committee
ASEAN Association of Southeast
Asian Nations DANIDA Danish International Development
Agency
ASYCUDA Automated System for
Customs Data DC Developing Country
AVE Average ad valorem equivalents DCED Donor Committee for Enterprise
Development
BADEA Arab Bank for Economic
Development in Africa DDA Doha Development Agenda
B20 Business 20 DFIs Development Finance Institutions
BCP Border Crossing Points DFID Department for International
Development
BPC building productive capacity
DFQF Duty Free Quota Free
CAMEX Brazilian Foreign Trade Council
DP World Dubai Ports World
CAREC Central Asian Regional
Economic Cooperation DTIS Diagnostic Trade Integration Study
CARICOM Caribbean Community EAC East African Community
CAUCC Central American Uniform EATTF East African Trade and Transport
Customs Code Facilitation Project
CCC Customs Cooperation Committee ECA Europe and Central Asia
CDC Commonwealth Development ECLAC Economic Commission for Latin
Corporation America and the Caribbean
CE Conformité Européenne ECOWAS Economic Community of West
African States
CEB Council of Europe Development
Bank

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 19
ACRONYMS AND ABBREVIATIONS

EDFI European Development Finance HLPE High Level Panel of Eminent Persons
Institutions IADB Inter-American Development Bank
EFTPOS Electronic Funds Transfer At Point IBRD International Bank for
Of Sale Reconstruction and Development
EIF Enhanced Integrated Framework (World Bank Group)
EnACT Enhancing Arab Capacity for Trade ICD Islamic Corporation for the
EOS Executive Opinion Survey Development of the Private Sector
ETI Enabling Trade Index ICT Information and Communications
Technology
ETLS East African States Trade
Liberalization Scheme IDS Institute of Development Studies
EU European Union IFAD International Fund for Agricultural
Development
EUR Euro
ILAC International Laboratory
EURODAD European Network on Debt Accreditation Cooperation
and Development
ILO International Labor Organization
FAMEX Fonds d'Accès aux Marchés
d'Exportation IMF International Monetary Fund
FAO Food and Agriculture Organization IPEA Institute of Applied Economic
of the United Nations Research
FDI Foreign Direct Investment IPOA Istanbul Program of Action
FfD Financing for Development IPR Intellectual Property Rights
Finnfund Finnish Fund for Industrial IsDB Islamic Development Bank
Cooperation Ltd. ISO International Organization
G20 Group of 20 for Standardization
GATS General Agreement on Trade ISRTTFP-WA Interstate Road Transport and
in Services Transit Facilitation Programme
for West Africa
GDP Gross Domestic Product
ITC International Trade Centre
GDPPC Gross Domestic Product Per Capita
ITFC International Islamic Trade Finance
GEA Global Express Association Corporation
GEF Global Environment Facility JBP Joint Border Posts
GIZ Deutsche Gesellschaft für JICA Japan International Co-operation
Internationale Zusammenarbeit Agency
GMS Greater Mekong Sub-region KCA Kyrgyz Centre of Accreditation
GNI Gross National Income LAC Latin America and the Caribbean
GRVC Global/Regional Value Chains LDC Least Developed Country
GRA Gambia Revenue Authority LIC Low Income Country
GVC Global Value Chain LLDC Landlocked Developing Country
GTZ Deutsche Gesellschaft Für LMIC Low Middle-Income Country
Technische Zusammenarbeit
(German Development LPI Logistic Performance Index
Cooperation) LSCI Liner Shipping Connectivity Index
HACCP Hazard Analysis Critical M4P Making Markets Work for the Poor
Control Points MAST Multi-Agency Support Team
HIC High Income Country

20 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 ACRONYMS AND ABBREVIATIONS

MDGs Millennium Development Goals PHAMA Pacific Horticultural and Agricultural

MENA Middle East and North Africa Market Access
MFN Most Favoured Nation PIC Pacific Island Countries
MNE Multinational enterprise PIFs Pacific Islands Forum Secretariat
MRA Mutual Recognition Arrangement PNG Papua New Guinea
MW Megawatt PPD Public-private dialogue
NEPAD New Partnership for Africa’s PPP Public-Private Partnership
Development PROCOMEX Aliaca Pro-Modernizacao Logistica
NGO Non-governmental Organisation de Comercio Exterior
Norfund Norwegian Investment Fund for PRSP Poverty Reduction Strategy Paper
Developing Countries PSD Private Sector Development
NSC National Steering Committee PTA Preferential Trade Agreements
NTB Non-Tariff Barrier RBC Responsible Business Conduct
NCTTCA Northern Corridor Transit And RECs Regional Economic Communities
Transport Coordination Authority RECAUCC Regulation on the Central American
NTF Netherlands Trust Fund Uniform Customs Code
NTFC National Trade Facilitation RESW Rwanda Electronic Single Window
Committee RMC Regional Member Countries
NTM Non-Tariff Measures RTA Regional Trade Agreement
OCTA Office of the Chief Trade Adviser SA South Asia
for Pacific Island Countries
SADC Southern African Development
ODA Official Development Assistance Community
ODI Overseas Development Institute SDC Swiss Agency for Development
OECD Organisation for Economic and Cooperation
Co-operation and Development SDG Sustainable Development Goals
OECS Organisation Of Eastern Caribbean SDT Special and Different Treatment
States
SDTF Standards and Trade
OFID OPEC Fund for International Development Facility
Development
SEA South East Asia
OIF Organisation internationale
SECEX Brazilian Secretariat of Foreign Trade
de la Francophonie
SIDA Swedish International Development
OLICs Other Low-Income Countries
Co-operation Agency
OOF Other Official Flows
SIDS Small Island Developing States
OSBP One Stop Border Posts
SIECA Secretaria de Integracion
OWG Open Working Group Economica Centromaericana
PACER Pacific Agreement on Closer SIPPO Swiss Import Promotion
Economic Relations Programme
PAGE Programme for Accelerated Growth SMEs Small and Medium-sized Enterprises
and Employment
SPS Sanitary and Phytosanitary
PAIRCA Programme of Support for Regional
SSA Sub-Saharan Africa
Integration in Central America
STDF Standards and Trade
PDR People’s Democratic Republic
Development Facility

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 21
ACRONYMS AND ABBREVIATIONS

SWF Sovereign Wealth Funds UNDP United Nations Development

TACB Technical assistance and Programme
capacity building UNECA United Nations Economic
TBT Technical Barriers to Trade Commission for Africa

TEU Twenty-foot equivalent unit UNECE United Nations Economic

Commission for Europe
TFA Trade Facilitation Agreement
UNEP United Nations Environment
TFI Trade Facilitator Indicators Programme
TGVCI Trade and Global Value UNESCAP United Nations Economic and Social
Chains Initiative Commission for Asia and the Pacific
TIM International Customs Transfer UNESCWA United Nations Economic and Social
for Merchandise Commission for Western Asia
TMEA TradeMark East Africa UNFCCC United Nations Framework
TPO Trade Promotion Organisation Convention on Climate Change
TRIPs Trade-Related Aspects of UNIDO United Nations Industrial
Intellectual Property Rights Development Organisation
TSCC Transport Sector Coordinating UN-OHRLLS Un Office of The High
Committee Representative for the Least
TSI Trade Support Institutions Developed Countries, Landlocked
Developing Countries And Small
TTFA Trade and Transport
Island Developing States
Facilitation Assessment
UNOPS United Nations Office
TTFS Transport and Trade Facilitation
for Project Services
Strategy
USAID United States Agency for
UEMOA Union Économique et Monétaire
International Development
Ouest-Africaine
USD United States Dollar
UK United Kingdom
VFTA Vietnam Trade Facilitation Alliance
UMICs Upper Middle-Income Countries
VSS Voluntary sustainability standards
UN United Nations
WB World Bank
UNCITRAL United Nations Commission on
International Trade Law WCO World Customs Organization
UNCTAD United Nations Conference WEF World Economic Forum
on Trade and Development WTO World Trade Organization

22 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 EXECUTIVE SUMMARY

High trade costs inhibit numerous developing countries from fully exploiting the market access opportunities that
the multilateral trading system creates. Cumbersome and time-consuming border procedures, obsolete or ill-adapted
infrastructure, limited access to trade finance and the complexity and cost of meeting an ever broader array of standards
all serve to price too many countries out of international trade. Comparative advantage remains underexploited. Market
access does not always convert into market presence. The potential gains from trade are not always fully realised. The
Aid-for-Trade Initiative was launched at the 2005 Hong Kong World Trade Organization (WTO) Ministerial Conference to
tackle these kinds of constraints and is making headway. The joint OECD-WTO report, Aid for Trade at a Glance 2015, cites
many examples of where obstacles are being overcome and the attendant development benefits. Yet more remains
to be done. The report calls for a redoubling of efforts to tackle the issue of trade costs which continues to marginalise
many of the world’s poorest and most fragile economies.

Reducing trade costs matters …

Remoteness, inadequate or defective infrastructure and small markets with limited supply side capacity mean that
some countries face higher trade costs than others. Policy measures at, between and behind borders is also important
in raising trade costs. And when these “frictions” give rise to high absolute costs they can render exports uncompetitive
and effectively nullify comparative advantages. High trade costs also erode consumer welfare, narrowing the range of
goods and services on offer and pushing up prices. Moreover, they deny firms’ access to technology and intermediate
inputs, preventing their entry into, or movement up, global value chains.

While trade costs alone do not explain the development pathways of individual economies, they are a major factor
in clarifying why some countries are unable to grow or diversify. Evidence suggests that developing countries bear a
disproportionate share of global trade costs, even though they have become more integrated into the world economy
in recent years. Some middle income countries have been successful in reducing such costs, but low income countries,
especially in sub-Saharan Africa, continue to struggle with stubbornly high trade costs. Moreover, these costs are falling
at slower rates than elsewhere, increasing the risk of marginalisation.

…especially for the Least Developed Countries

The Least Developed Countries (LDCs) either on their own or with support are gaining traction in lowering trade costs.
However, they find it hard to make a transformative shift because of the high absolute costs from which they start
(particularly landlocked countries), limited institutional capacity and resource constraints. This is where aid for trade is
contributing to lowering trade costs. A review of Diagnostic Trade Integration Studies, together with evaluations and
case studies, shows that the impact of these interventions is highest when based on: robust and credible analytical
work; a high level of country ownership; institutional capacity building; continuous support over a sufficiently long
period; resource leveraging; and a co-ordinated donor response.

… and small- and medium-sized enterprises.

Small- and medium-sized enterprises (SMEs) represent the backbone of economic activity especially in developing
countries. Those that are integrated in global markets – whether directly or indirectly – are more productive than SMEs
that do not participate in trade. More productive SMEs find it easier to integrate, but integration is also likely to contribute
to raising productivity and closing the productivity gap between small and large enterprises. The result is higher and

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 23
EXECUTIVE SUMMARY

more inclusive growth. However, SMEs suffer disproportionately from high trade costs, hampering their integration into
the global economy. Reducing trade costs will therefore contribute to making trade more inclusive as it may allow SMEs
to expand employment and increase wages. Gender equality can benefit from this, given that many SMEs are owned
by women and employ more women than men.

The WTO Agreement on Trade Facilitation is an important step

An important step towards reducing trade costs was taken in 2013 when the Ninth WTO Ministerial Conference in Bali
concluded the Agreement on Trade Facilitation (TFA). The TFA promises to bring substantial cost reductions for traders
and revenue increases for governments. The TFA gives customs and border modernisation efforts a new focus and
direction. Donors have expanded their financial support to implement trade facilitation measures to USD 1.9 billion
since 2005, with positive results reported on many of the issues covered by the TFA. Sustained donor support will be
needed to assist developing countries in making good on their commitments and realising the full potential of the
agreement.

… and helps countries to connect with global value chains.

Many of the costs that affect the smooth connection of various parts of the production chain transcend national
borders. For this reason, regional initiatives to enhance connectivity can often be more effective in addressing such
costs than purely national programmes. Thus, there is significant scope to tackle trade barriers on a multi-country or
regional basis and in ways compatible with the principles of the multilateral trading system. In response, several aid-
for-trade projects – often with multi-donor funding – have targeted regional trade costs and successfully improved
regional economic co-operation. Going forward, it is important to learn from these examples that have succeeded in
reducing trade costs sustainably

Aid-for-trade disbursements are helping …

A total of USD 264.5 billion has been disbursed for financing aid-for-trade programmes and projects since the Aid-for-
Trade Initiative was launched in 2006, while the share of aid for trade in sector-allocable aid has risen from 31% to 38% in
2013. To date, more than three-quarters of total aid for trade has financed projects in four sectors that are closely related
to cutting trade costs; transport and storage (29%), energy generation and supply (21%), agriculture (18%) and banking
(10%). Middle Income Countries received, in addition, USD 190 billion in trade-related other official flows mainly for
infrastructure and private sector development. The LDCs received 10 USD per capita in aid for trade, more than double
the average.

… with further support through public-private co-operation.

In order to design effective solutions for cutting trade costs, in particular those occurring at the border, close collaboration
between the public and the private sector is key. Partnership between the public and private sectors can ensure that
efforts tackle the value chain-related constraints and reach tipping points for growth. To that end, a constant dialogue
between government and the private sector can help adapt reforms to meet the needs of firms including SMEs which
will also enhance poverty reduction. While business’ first priority is implementing the TFA, a co-ordinated approach is
required, that goes beyond encouraging trade. For example, enabling trade should go hand in hand with facilitating
investment to enlarge the pool of finance for development.

24 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 EXECUTIVE SUMMARY

Aid for trade and the sustainable development agenda

The post-2015 development agenda, which aims at inclusive and sustainable development in social, economic and
environmental dimensions, requires a significantly increased amount of financing. This will strengthen the prominence
of international trade as a source of financing for development, particularly for the LDCs. However, the trade and
development community should take care that the transformative nature of the post-2015 development agenda does
not inadvertently result in a rise of unnecessary non-tariff measures that would increase trade costs and reduce the
capacity of developing countries to use trade as an engine of economic growth and poverty reduction.

The new development paradigm under the post-2015 development agenda may require aid for trade to adopt a
more integrated approach. Such an approach should ensure that aid for trade contributes to inclusive and sustainable
development outcomes. That is, in addition to improving trade performance, the Aid-for-Trade Initiative should aim at
positive social, economic and environmental impacts. For example, it should help developing countries to deal with the
extra cost that may be associated with a greater burden of compliance with non-tariff measures.

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 25
 INTRODUCTION

Trade can play a powerful role in contributing to productivity, growth, incomes and jobs. The evidence is incontrovertible
that openness to trade raises national incomes. Trade can also contribute to new and better jobs and improve overall
working conditions. It is essential for the transfer of knowledge, technology and skills – and thus for development.
Indeed, trade is in most cases the single most important external source of development financing. Aid for trade helps
developing countries maximise the gains from trade by assisting them to analyse, implement and adjust to trade
agreements and to build their supply-side capacity and infrastructure they need to compete internationally.

International trade is not a seamless process and frictions give rise to trade costs. The range of policies and procedures
that affect trade costs is broad and located behind the border. They include as non-tariff regulatory measures, market
access restrictions, trade finance availability and costs and general impediments to doing business, documentation
and customs compliance requirements, lengthy administrative processes and other delays. Moreover, they occur at
all stages of the international trade chain, such as during transport and in logistics. High trade costs effectively nullify
comparative advantage by rendering exports uncompetitive.

The burden of trade costs falls heaviest on least developed countries (LDCs), although the impact may vary by region.
Other factors (e.g. being landlocked) also play a role. LDCs are making progress in mainstreaming the issue of trade costs
into national development policy frameworks, as assisted by the Enhanced Integrated Framework and other actors, but
progress in bringing down trade costs varies widely. A virtuous circle of national action supported by aid for trade is
laying the groundwork for export diversification and attracting FDI and can be observed in some LDCs – although in all
too many others the situation remains challenging.

Trade costs are a major determinant of how developing country firms connect to GVCs – and their ability to draw benefits
from their participation. The burden of trade costs falls heavily on SMEs, which – mindful of the positive employment
and empowerment effects – increasingly focus their efforts on stimulating inclusive, sustainable growth in this segment
of the economy. Non-tariff measures emerge strongly as a particular concern for SMEs, namely in connecting to value
chains.

Several policy areas affecting value chain integration fall within the purview of the aid-for-trade initiative, in particular
trade facilitation and the quality of infrastructure. The WTO Trade Facilitation Agreement represents a historic
opportunity to streamline border procedures and reduce trade costs. Aid-for-trade facilitation has already scored
measurable successes, but TFA implementation requires further sustained financial and technical support, notably for
LDCs and landlocked countries. It will also require a coherent approach at the regional and national level that not only
involves customs but also other border agencies and the private sector.

Aid for trade is helping reduce trade costs, particularly where partner governments, regional economic communities
and transport-corridor initiatives are mainstreaming this issue into their development strategies and where other
sources of financing are being leveraged so as to ensure medium-term sustainability. Where sequencing is right and
the engagement of governments, development partners and the private sector is sustained, rapid progress can result.
Research highlights how regional initiatives to address trade costs are gaining traction in some regions, while in others
efficiency gains from regional initiatives remain unrealised. Aid-for-trade flows have held up through the financial crisis
– and other sources of development finance (i.e. new actors and new approaches) are coming onstream. The challenge
is how to use aid for trade in a catalytic way so as to leverage other development financing, with inclusive, sustainable
growth objectives in mind and ensuring equity in distribution of those funds, particularly for LDCs.

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INTRODUCTION

Realising the inclusive, sustainable growth that lies at the heart of the post-2015 development agenda will require
concerted, ongoing action on the trade agenda, including on bringing down trade costs. There is scope to use
aid for trade to leverage other sources of financing and as a catalyst for the transformational, sustainable vision that lies
at the heart of the SDGs. Reducing trade costs is an area where the private sector has much to contribute – and the
development community much to learn on how to integrate the private sector in development planning frameworks.

MONITORING AID FOR TRADE

This is the fifth monitoring report on aid for trade. The aim of the report is to link accountability at the local and regional
level with a global review process to build genuine partnerships and create incentives for delivering results in terms of
trade performance, economic growth and poverty reduction. The monitoring framework provides transparency about
the demand for aid for trade, which is based on the extent to which trade is prioritised in development strategies,
the response in terms of aid-for-trade commitments and disbursements, the outcomes in terms of enhanced trade
capacities and the impact in terms of trade performance and reduced poverty.

The framework consists of a qualitative and quantitative component. The qualitative component is based on self-
assessments, case stories, evaluations and empirical studies. Quantitative monitoring tracks the aid-for-trade flows at
the global level based on data extracted from the OECD Creditor Reporting System (CRS) database, following the aid-
for-trade proxies that most closely match the measurement of aid-for-trade flows as agreed by the WTO Task Force on
Aid for Trade (WT/AFT/1).

WHO PARTICIPATED IN THE MONITORING EXERCISE?

In 2015, 62 developing countries (half of them LDCs) submitted an aid-for-trade self-assessment in the context of
the monitoring exercise. In addition, 10 organisations responsible for facilitating trade through transport corridors
participated for the first time in the monitoring exercise. The total number of donors that participated in the 2015 survey
reached 31, with 24 bilateral and 13 multilateral donors. Furthermore, three providers of South-South trade-related
assistance (i.e. China, Chile and Indonesia) submitted a self-assessment. However, statistical data on their programmes
remains anecdotal and has to be harvested from secondary resources (see chapter 3).

Figure 0.1 Questionnaires by respondents

Number of responses are shown in white.
Partner country
Regional/Transport Corridor
(LDCs)
9% 31
28%
10

3
South-South providers
3%
Total responses
31 112 13 Multilateral donors
Partner country 12%
(developing countries)
28% 24

Bilateral donors
21%
Source: OECD/WTO aid for trade monitoring exercise (2015).
12http://dx.doi.org//10.1787/888933240669

28 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 INTRODUCTION

The 2015 monitoring exercise also included a call to the public and private sector to submit case stories about aid-
for-trade programmes. This followed the success of the 2011 call for case stories, which resulted in an OECD/WTO
publication, Aid for Trade in Action (OECD/WTO, 2013). The purpose of this call for case stories was to probe more deeply
into the objectives, challenges and processes of trade-related assistance to better understand the results – particularly
what was working in the provision of aid for trade, what were the key ingredients of success and what governments and
practitioners could learn from experience.

Figure 0.2 Case stories by sector

% SHARE OF TOTAL RESPONSES

Trade policies & regulations 50%

Productive capacity building: Business 15%
Productive capacity building: Agriculture 15%
Economic infrastructure: Transport & storage 9%

Economic infrastructure: communications 5%

Productive capacity building: Banking 3%
Economic infrastructure: Energy 2%
Productive capacity building: Industry 1%
Productive capacity building: Fishing 1%
0 10 20 30 40 50 60
NUMBER OF RESPONSES

Source: OECD/WTO aid for trade monitoring exercise (2015).

12http://dx.doi.org//10.1787/888933240678

A total of 117 case stories were submitted; 94 from the public sector, 18 from the private sector, and five from NGOs
and academia. Half of the case stories focused on support for capacity building in trade policy and regulations and, in
particular, trade facilitation projects. Building productive capacities was the topic of 35% of the case stories, and the rest
recounted experiences in building infrastructure. Projects in the high income countries was the topic of 45 case stories,
followed by 27 in the LDCs, 21 in the UMICs, 11 in the LMICs and four in the OLICs.

The substantive response is a clear reflection of members’ active involvement in the aid-for-trade initiative and their
generally positive response to the global monitoring exercise. The sheer quantity of activities described in these stories
suggests that aid-for-trade efforts are substantial, that they have taken root across a wide spectrum of countries and that
they are becoming central to development strategies. The fact that nearly half of the stories were provided by developing
countries underlines the salience of these programmes – and highlights the potential for knowledge-sharing.

THE STRUCTURE OF THE REPORT

The aid-for-trade initiative has allowed for the active engagement of a large number of organisations that are helping
developing countries, and especially the least developed, build the infrastructure and supply-side capacity they need
to connect to regional and global markets and improve their trade performance. Some of these organisations have
contributed chapters which deal with specific aspects of the topic of reducing trade costs for inclusive and sustainable
growth and which are related to their core competences. In addition, the World Economic Forum has provided
the business perspective on these issues. These chapters are published under the responsibility of the respective
international organisations.

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 29
INTRODUCTION

Chapter 1 was written by the World Trade Organization and addresses the question of why trade costs matter for
inclusive, sustainable growth. The chapter defines trade costs and argues that policies matter in reducing trade costs
in the goods and services markets. Next, the chapter illustrates the scale of the trade costs many developing countries
must face and shows that lowering trade costs will result in more trade and potentially higher incomes, particularly in
developing countries. The chapter highlights how LDCs and developing country governments are using aid for trade
to support action to tackle high trade costs and integrate countries in regional and global trade networks. The analysis
highlights that there are good reasons to believe developing countries and their partners are taking this issue seriously
and their action in this area builds from solid practical and theoretical foundations.

Chapter 2 was written by the World Bank and uses recent advances in trade theory and empirics to infer trade costs
from the observed pattern of trade and production across countries. This then is used to provide evidence on recent
trends in trade costs, focusing on the developing world. The data show that developing countries, particularly low
income countries, suffer from relatively high trade costs. Although some middle income countries have been successful
in reducing trade costs, low income countries and countries in sub-Saharan Africa have been proceeding at a much
slower pace. They risk continued marginalisation from the global trading economy. However, empirical research
suggests a variety of policies that can be effective in reducing trade costs, such as improving trade facilitation and
logistics performance, boosting connectivity, and improving the business environment.

Chapter 3 was written by the Organisation for Economic Co-operation and Development and analyses aid-for-trade
policies, priorities and flows. The chapter examines the USD 246.5 billion in aid for trade and an additional USD 190 billion
in trade-related other official flows (OOF) that was disbursed between 2006 and 2013. Next, the chapter summarises
the findings from empirical studies, evaluations and case stories to show the impact of this trade-related support. This
is followed by a section that looks at the trade-related priorities of partner and donors countries and whether donors
align their support around these priorities, including for reducing trade costs. The final section assesses the short-term
outlook for aid-for-trade flows.

Chapter 4 was written by the World Trade Organization and focuses on the landmark WTO Trade Facilitation
Agreement (TFA). The chapter starts with a brief explanation of the new Agreement. Next, it analyses the needs of
developing countries and, in particular, the least developed countries (LDCs), as well as the available support from
donors that report to the OECD CRS. The WTO TFA provides a new locus to the extensive and ongoing trade facilitation
support that donors have expanded in recent years. As such, there is emerging good practice in implementing some
of the provisions of the Agreement and the resulting benefits. There is, however, an ongoing concern on the part of
developing countries that the specific support needed to implement the so-called Category C provisions (i.e. those
that would need support to be implemented) may not be available or adapted to their implementation challenges – a
concern that has prompted the WTO to create the Trade Facilitation Agreement Facility.

Chapter 5 was written by the Executive Secretariat for the Enhanced Integrated Framework and concentrates on the
issue of reducing trade costs and the LDCs. The chapter starts with a discussion as to why trade costs matter, especially
for the LDCs. This is followed by a section that analyses trends in LDC trade costs over the last ten years. The next section
looks at LDCs’ priorities in tackling trade costs and the role of development partners. Based on the EIF’s experience, the
chapter also investigates what works and what does not, as well as where improvements are needed in addressing the
challenges of trade costs facing LDCs.

30 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 INTRODUCTION

Chapter 6 was written by the Organisation for Economic Co-operation and Development and looks at the influence
of trade costs and trade facilitation on connecting firms to regional and global value chains (GVCs). The chapter starts
with analysing the global and regional value chains, in particular how countries engage in GVCs and what determines
their participation. Next, the chapter provides a regional perspective on trade costs and, in particular, trade infrastructure
and trade facilitation. This is followed by a section on regional aid-for-trade (facilitation) initiatives and their results.

Chapter 7 was written by the International Trade Centre and analyses how aid for trade can help reduce the burden of
trade costs for small and medium sized enterprises (SMEs) in developing countries. First, the chapter defines SMEs and
why fixed trade costs matter for them. Next, the chapter reports on the perception of SMEs regarding trade costs and,
in particular, those that are fixed. This is followed by a section on how trade support institutions can help address these
and other costs, which are often related to the problem of SMEs finding buyers.

Chapter 8 was written by the Organisation for Economic Co-operation and Development and looks at how to
deepen private sector engagement in aid for trade. The chapter starts with highlighting the changing context of public-
private co-operation for development, then it analyses how OECD countries are promoting private sector engagement
to achieve economic growth and development. The next section looks at donor support for building productive
capacities and the results of these programmes. The last section highlights some lessons learned about working with
the private sector to achieve development outcomes.

Chapter 9 was written by the United Nations Conference on Trade and Development and discusses the role of trade
in the post-2015 development agenda and the implications for the aid-for-trade initiative. The chapter describes how
trade is a means of implementing the sustainable development goals (SDGs) and how trade can help LDCs achieve
them. The chapter finally highlights how aid for trade can be made more useful in the new development environment.

Chapter 10 was written by the World Economic Forum and argues that it is important to engage the private sector
at the beginning of aid-for-trade planning. Moreover, a constant dialogue between the government and the private
sector can help adapt reforms to meet the needs of users and enhance their impact. The chapter reasons this should
not only be limited to trade issues but also to investment matters. Finally, the chapter provides some examples of
successful company-led efforts to reach trade tipping points.

Chapter 11 was written by the Organisation for Economic Co-operation and Development and World Trade
Organization and assesses whether the aid-for-trade initiative it is still fit for the purpose of helping developing
countries, particularly LDCs, build the supply-side capacity and trade-related infrastructure they need to implement and
benefit from WTO agreements and more broadly expand their trade. The concluding chapter highlights some of the
main achievements and challenges of the initiative and suggests a focus on the reduction of trade and investment costs
could serve as a rallying point for integrated approaches to ensure inclusive and sustainable development outcomes.

The remainder of the report contains the aid-for-trade factsheets of the countries that participated in the monitoring
exercise and the aid-for-trade statistical data used in the report. Lastly, all the information used in this report, including
the self-assessments and case stories, is available on the OECD/WTO aid-for-trade website: www.aid4trade.org.

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 31
INTRODUCTION

TABLE 0.1 Responses to the Aid for Trade questionnaire

Overall total Partner country LDCs Donors South-South

Responses 2015 112 62 31 37 3

Responses 2013 133 80 36 43 9
Responses 2011 146 84 31 43 10
Source: OECD/WTO aid for trade monitoring exercise (2015).

TABLE 0.2 Partner country responses to the Aid for Trade questionnaire
Region Responses to questionnaire 2015 Responses to questionnaire 2013

Africa (28) Benin; Botswana; Burkina Faso; Cameroon; Benin; Botswana; Burkina Faso; Burundi;
Central African Republic; Chad; Comoros; Cape Verde; Central African Republic;
Congo DPR; Côte d’Ivoire; Gambia; Guinea; Chad; Comoros; Congo, Dem. Rep.; Côte
Guinea Bissau; Lesotho; Madagascar; d’Ivoire; Djibouti; Ethiopia; Gabon; Gambia;
Malawi; Mali; Mauritius; Nigeria; Rwanda; São Ghana; Guinea; Kenya; Lesotho; Liberia;
Tomé and Principe; Senegal; Sierra Leone; Madagascar; Malawi; Mali; Mauritania;
Swaziland; Tanzania; Togo; Tunisia; Uganda; Mauritius; Morocco; Mozambique; Niger;
Zimbabwe Nigeria; Rep. of Congo; Rwanda; Senegal;
Sudan; Tanzania; Togo; Tunisia; Uganda;
Zambia; Zimbabwe
Arab and Middle East (1) Yemen Jordan; Oman; Yemen
Asia and Pacific (14) Bangladesh; Bhutan; Cambodia;Indonesia; Bangladesh; Bhutan; Cambodia; Fiji; India;
Lao DPR; Mongolia; Nepal; Pakistan; Papua Indonesia; Nepal; Pakistan; Papua New
New Guinea; Samoa; Solomon Islands; Guinea; Samoa; Tuvalu; Vanuatu
Thailand; Tonga; Vanuatu
Central and Eastern Afghanistan Afghanistan; Turkey
Europe and Central Asia (1)

Latin America and the Antigua and Barbuda; Belize; Colombia; Antigua and Barbuda; Bahamas; Barbados;
Caribbean (18) Costa Rica; Dominica; Dominican Republic; Belize; Colombia; Costa Rica; Dominica;
El Salvador; Grenada; Guatemala; Haiti; Dominican Republic; El Salvador; Grenada;
Honduras; Mexico; Panama; Paraguay; Peru; Guatemala; Haiti; Honduras; Jamaica,
St. Lucia; St. Vincent and The Grenadines; Mexico; Nicaragua; Panama; Paraguay;
Trinidad and Tobago Peru; St. Kitts and Nevis; St. Lucia; St.
Vincent and the Grenadines; Suriname;
Trinidad and Tobago; Uruguay
LDCs (31) Afghanistan; Bangladesh; Benin; Bhutan; Afghanistan; Bangladesh; Benin; Bhutan;
Burkina Faso; Cambodia; Central African Burkina Faso; Burundi; Cambodia; Central
Republic; Chad, Comoros; Congo DPR; African Republic; Chad; Comoros; Congo,
Gambia; Guinea Bissau; Guinea; Haiti; Lao Dem. Rep.; Djibouti; Ethiopia; Gambia;
DPR; Lesotho; Madagascar; Malawi; Mali; Guinea; Haiti; Lesotho; Liberia; Madagascar;
Nepal; Nigeria; Rwanda; São Tomé and Malawi; Mali; Mauritania; Mozambique;
Principe; Senegal; Sierra Leone; Solomon Nepal; Niger; Rwanda; Samoa; Senegal;
Islands; Tanzania; Togo; Uganda; Vanuatu; Sudan; Tanzania; Togo; Tuvalu; Uganda;
Yemen Vanuatu; Yemen; Zambia
Source: OECD/WTO aid for trade monitoring exercise (2015).

32 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 INTRODUCTION

TABLE 0.3 Donor country response to the Aid for Trade questionnaire
Region Responses to questionnaire 2015 Responses to Questionnaire 2013

Bilateral (24) Australia, Austria, Belgium, Canada, Chinese Australia; Austria; Belgium; Bulgaria; Canada;
Taipei, Czech Republic, Denmark, EU, Czech Republic; Denmark, EU; Finland;
Finland, France, Germany, Hungary, Ireland, France; Germany; Greece; Ireland; Italy; Japan;
Italy, Japan, Korea, New Zealand, Norway, Korea; Lithuania; Netherlands; New Zealand;
Sweden, Switzerland, Netherlands, UK, US, Norway; Portugal; Singapore; Spain; Sweden;
UNDP-Uzbekistan Switzerland; Chinese Taipei; UK; US
Multilateral (13) AfDB; AsDB; EBRD; IaDB; IsDB (ITFC); ITC; AfDB; EBRD; EIF; FAO; IaDB; IMF; IsDB; ITC;
UNCTAD; UNDP; UNECA; UNECE; UNIDO; UNCTAD; UNDP; UNECA; UNECE; UNIDO;
UNESCAP; WB World Bank; WTO
Source: OECD/WTO aid for trade monitoring exercise (2015).

TABLE 0.4 Providers of South-South co-operation responses to the Aid for Trade questionnaire
Region Responses to questionnaire 2015 Responses to Questionnaire 2013

3 Chile, China, Indonesia Chile; China, Colombia; Costa Rica; Indonesia;

Mauritius; Mexico; Morocco; Oman; Sudan
Source: OECD/WTO aid for trade monitoring exercise (2015).

TABLE 0.5 Regional & Transport corridor questionnaire

Responses to Regional Economic Communities Regions
questionnaire 2015

10 NCTTCA, OECS, Trade Mark East Africa, Africa (5), Latin America and the Caribbean
SIECA, OCTA, COMESA, CARICOM, SADC, (3), Asia and the Pacific (2)
PIFS, ECOWAS
Source: OECD/WTO aid for trade monitoring exercise (2015).

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 33
INTRODUCTION

REFERENCE

OECD/WTO (2013), Aid for Trade in Action, http://dx.doi.org/10.1787/9789264201453-en, OECD Publishing, Paris.

34 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 CHAPTER 1
 HY TRADE COSTS MATTER
W
FOR INCLUSIVE, SUSTAINABLE GROWTH
Contributed by the World Trade Organization

Abstract: International trade is not a seamless process. “Frictions” abound that give rise to trade costs.
High trade costs effectively nullify comparative advantage by rendering exports uncompetitive. High trade
costs deny firms access to technology and intermediate inputs, preventing their entry into, or movement
up, global value chains. High trade costs also erode consumer welfare narrowing the range of good and
services on offer and pushing up prices. While trade costs do not alone explain the development pathways
of economies, they are a major factor explaining why some countries are unable to grow and diversify.
The range of policies that affect trade costs is broad. Although trade costs are ubiquitous, they are not
immutable. Action can, and is, being taken to reduce trade costs. Policy reforms are yielding positive
impacts, although these cannot be assumed, with research suggesting that the lowest income countries
stand to gain the most from enacting such reforms. Much work remains to be done to reduce trade costs
further and integrate countries more completely into the global economy, but there are positive reasons to
believe that developing countries and their partners are taking this issue seriously.

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CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

INTRODUCTION
Trade costs matter. They exert a strong influence on trade flows; on who trades what and with whom; on where
products are made and services traded; and on the goods and services available to consumers and the prices they
pay for them. Trade costs interact with economic fundamentals like technology and factor endowments (labour and
capital) to produce the pattern of trade and production we observe around the world. As such, they have a great
potential to influence the trajectory of a country’s economic development. Box 1.1 below provides an overview of why
trade costs matter in the opinion of some least developed country (LDC) governments.

BOX 1.1 Why trade costs matter to some least developed countries

“As a landlocked country, Bhutan tends to have higher trade costs in reaching markets beyond borders.” Bhutan
“Trade costs are very important for the competitiveness of our exports because of our isolation, which together with
transport costs and the transit of our goods for export makes us less competitive”. Central African Republic
“The cost of trade remains decisive in the structure of the prices of imported products and significantly affects the
purchasing power of the Congolese population.” Democratic Republic of Congo
“Despite all the efforts already made, reducing the costs of trade remains a major challenge for Madagascar.”
Madagascar
“High trade costs for accessing imports directly from Sierra Leone are reflected in high prices for the same goods
when compared to the prices in the neighbouring countries of Guinea and Liberia. This has to a large extent been
responsible for the increase in illegal activities like smuggling across the porous borders, thus leading to loss of
customs revenue for the government.” Sierra Leone
“As a landlocked country, Uganda’s trade costs are high, affecting the competitiveness of Uganda’s exports.” Uganda
“Our private sector has time and again informed responsible government ministries of the very high cost of doing
business. Some even asked government ministries for support by lowering the cost of inputs, especially fuel, electricity,
etc. Also, the transportation links do not suit our private sector, adding to the cost of exporting.” Solomon Islands

Source: OECD/WTOAid for Trade monitoring exercise, 2015.

High trade costs effectively isolate countries from world markets: consumers in these countries cannot take advantage of
competitively priced goods from abroad, and their firms cannot access high quality foreign inputs or export to overseas
markets. For those living at the base of the pyramid, often in extreme poverty, high prices disproportionately impacts
on their consumer welfare. Not surprisingly, lower trade costs are typically associated with net poverty reductions even
though the distributional impact of trade costs differs across countries. This positive relationship between trade costs
and poverty is illustrated in Figure 1.1. Developing countries with higher trade costs – measured by the number of days
required to export in 2005 – tend to have a higher share of the population living on less than USD 2 per day.

High trade costs price some country regions, countries and companies out of export markets, thereby limiting their
economic development opportunities. Trade costs may not explain why some countries are low income or least
developed, but, in combination with other factors, they do explain why some countries struggle to grow and exploit
their comparative advantages (see figure 1.2). Keeping trade costs at reasonable levels and reducing them as far as
possible in some key areas is essential to enjoying comparative advantage and the gains from trade.

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 CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

Figure 1.1 Population living on less than USD 2 per day (2008-12) and number of days
needed to export (2005)
PERCENT
100

50

2.5 3.0 3.5 4.0 4.5

DAYS TO EXPORT (2005) – LOGARITHMIC SCALE
95% Confidence interval Fitted values pov200
Note: The number of days required to export in 2005 is in natural logarithms. High income countries are not included in the figure.
Note: The number of days required to export in 2005 is in natural logarithms. High income countries are not included
in the figure.
Source: WTO Secretariat calculation. Data: World Bank World Development Indicators.
12http://dx.doi.org//10.1787/888933240687

Figure 1.2 Doing Business costs to export, USD per container, 2014
INCOME GROUP
Low income

Lower middle income

Upper middle income

High income: OECD

High income: non-OECD

0 500 1 000 1 500 2 000 2 500
USD PER CONTAINER

Source: World Development Indicators.

12http://dx.doi.org//10.1787/888933240694

In a static sense, economic welfare can increase from lower trade costs – the real economic cost of doing business
is reduced and GDP correspondingly increases as new transactions take place. Dynamic gains are also possible. In
particular, access to foreign inputs has been found to be associated with innovation activity: as firms gain access to
new goods, they combine them in different ways to make new products. Indigenous technology development or
adaptation is at the core of economic development over the medium to long term and harnessing the process is likely
an important part of moving up global value chains.

High trade costs are a considerable burden on the poor, undermining economic welfare by pushing up consumer
prices and keeping poor producers out of global markets. Figure 1.3 below highlights the average number of days to
import. Time is an important parameter for trade costs. Against this background, it is important to note what happens

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CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

when trade costs for a particular country stay at an unnecessarily high level while those of its partners fall. The country
will be less able to take advantage of specialisation by comparative advantage and thus will feel the gains from trade
less fully than its partners. This point stands for countries that remain relatively marginalised from the global trading
system as a result of high trade costs, for example, landlocked developing countries and small island developing states.

Figure 1.3 Average number of days required to export by income group

DAYS
60

50
LDC
40
LLDC
Low income
30
Lower middle income
20 Upper middle income
High income
10

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Notes: Figures calculated based on simple averages across 44 LDCs, 16 LLDCs, 30 LICs, 48 LMICs, 49 UMICs and 46 HICs.
Note: Figures calculated based on simple averages across 44 LDCs, 16 LLDCs, 30 LICs, 48 LMICs, 49 UMICs and 46 HICs.
Source: World Development Indicators.
12http://dx.doi.org//10.1787/888933240704

Chapter 2 provides further details on the level of trade costs around the world, but as a general rule, they decrease as per
capita income increases: on average richer countries tend to have lower trade costs than poorer countries (Figure 1.1).
As a result, some countries are not able to fully reap the economic gains that come from specialisation by comparative
advantage, and their pattern of production and trade is distorted due to the presence of high trade costs. Of course,
high trade costs may be beneficial for certain people or groups within those countries – this is detailed below. But in
an aggregate sense, trade costs prevent the market from allocating resources in the most efficient way possible overall.
Consequently, countries that do more to lower trade costs – for instance, by improving logistics and trade facilitation
performance – tend to grow more quickly than others. This correlation is highlighted by the large number of countries
on the right side of the vertical line in Figure 1.4 below and the higher rates of GDP growth over the period 2006-13 for
these countries (i.e. they are making improvements in their logistics performance).

Not only do trade costs matter between countries, they also matter within countries. Firms that face high costs of
moving their goods from the factory gate to an international gateway, like a port or airport, effectively have an extra
hurdle to clear when they try to enter international markets. Sometimes these barriers keep them out of business
altogether, so Policy makers may not even realise the harm that is being done. Regions with high trade costs are often
economically deprived and lie at the low end of income distribution (Inter-American Development Bank [IADB], 2013).
Of course, many factors are at play in determining the ability of a country to grow and develop, and there are complex
interactions among them. But trade costs stand out as one important source of disadvantage for some countries.

A substantial body of research has emerged that highlights the negative impact of trade costs on economic welfare
and development, as well as trade connectivity (a range of metrics and indices are in place to track trade costs – see
Chapter 2). Respondents to the 2015 joint OECD-WTO Aid for Trade monitoring survey questionnaire (2015 monitoring
exercise) agreed strongly as to the impact of trade costs (see Figure 1.5 below). Some 87.0% of the 62 developing and
least developed country respondents indicated that trade costs are very important for their export competitiveness.
A higher number, 91.9%, believed that trade costs were important or very important for access to imports.

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 CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

Figure 1.4 Correlation between improvement in logistics performance and

GDP growth rate
ANNUALISED GROWTH RATE OF GDP IN REAL PPP TERMS 2007–2013
14
12
10
8
6
4
2
0
-2
-4
-6
-30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80%
PERCENT CHANGE IN LPI SCORE 2007–2014

Source: UNESCAP-World Bank Trade Costs Database; World Development Indicators.

12http://dx.doi.org//10.1787/888933240715

Figure 1.5 What contribution can reducing trade costs make to the target of inclusive,
sustainable growth?

Increase in exports
Rise in employment
Entry into new value chains
Diversification in export markets
Foreign direct investment
Diversification in export products
Reduction in poverty
Moving up value chains
Domestic private sector investment
Rise in female employment
Increase in imports
Consumer welfare effects
0 20 40 60 80 100
NUMBER OF RESPONSES

Partner country Donor South-South REC/TC

Source: OECD/WTOAid for Trade monitoring exercise (2015).
12http://dx.doi.org//10.1787/888933240720

In the context of the emerging narrative in the post-2015 development agenda, respondents to the 2015 monitoring
exercise highlighted issues such as export promotion, job creation, entry into value chains – as well as moving up within
them – and export diversification as just some of the ways in which lower trade costs can contribute to the target of
sustainable and inclusive growth. The relationships between trade policies, trade facilitation and inclusive growth are
explored in UNESCAP (United Nations Economic and Social Commission for Asia and the Pacific), 2013.

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CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

WHAT ARE TRADE COSTS?

In the economic literature, trade costs are defined as: “…[a]ll costs incurred in getting a good to a final user other than
the cost of producing the good itself: transportation costs (both freight costs and time costs), policy barriers (tariffs and
non-tariff barriers), information costs, contract enforcement costs, costs associated with the use of different currencies,
legal and regulatory costs and local distribution costs (wholesale and retail)” (Anderson and Van Wincoop, 2004).

Although we live in an increasingly interconnected world, goods and services do not flow seamlessly across borders. A
range of factors create friction, which in turn generates costs (Moïsé and Le Bris, 2013). How trade costs and economic
fundamentals interact explains, in large part, the range of goods and services exported and the markets served by
exporters and importers. The 2015 monitoring exercise asked for respondents’ views on a representative cross-section
of trade costs:

For merchandise goods, the questionnaire surveyed views on trade costs: impacts of border
procedures (i.e. trade facilitation); tariffs, fees and other charges; non-tariff measures; transport
infrastructure; and access to trade finance.
For services, the following trade costs were considered: network infrastructure (ICT, power, telecoms);
transport infrastructure; non-recognition of professional qualifications; restrictions on commercial
presence; restrictions on the movement of natural persons; a poor regulatory environment for services;
tariffs on product inputs (e.g. on computers for ICT services); and low skill levels in the services sector.
Economists distinguish between fixed and variable trade costs. Fixed costs require investment (e.g. investment needed
to meet a product standard in an importing market). Considering just a single period of operation, fixed costs are
typically paid once. Variable costs are paid per unit shipped (e.g. transport costs). The international movement of goods
is itself costly. Products need to be moved from a factory to a port or airport, processed at the border and loaded onto
a cargo ship or airplane. They are then transported an often long distance and unloaded, processed again at the border,
transferred onto a truck or train and moved into a local distribution network so that they can finally reach the consumer
in the importing country. Externalities such as congestion and pollution arise in this process. Where markets do not
operate effectively, pure friction, or economic “waste”, can occur.

BOX 1.2 What sets transport costs apart from tariffs?

IADB (2008) identifies at least three factors that set transport costs apart from other trade costs, particularly tariffs:
Unlike tariffs, transport costs are highly variable over time and the degree of uncertainty is likely to be directly
correlated to the quality of the country’s infrastructure (quality of the regulation included). A high degree of
uncertainty is likely to inhibit trade, particularly trade of new products, irrespective of the level of transport costs.
Unlike tariffs, transport costs are not a simple, fixed proportion (ad valorem) of the price of products. They represent
a per unit component that has important implications for the composition of the country’s exports. Because of
this component, transport costs are never product-neutral, bringing higher penalties for products that are more
“transport intensive”, not only in the sense of having low price-to-weight ratios, but also because of higher costs
related to inventory-holding and depreciation.
Unlike tariffs, transport costs are not fixed by fiat but respond to variables such as trade flows, the quality of the
country’s infrastructure and the degree of competition in the transport industry. Bringing transport costs down,
therefore, goes well beyond the political economy of protection and requires a more complex set of policy actions
than those involved in typical trade liberalisation.

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 CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

Trade costs in goods markets take many forms. Tariffs are one well-known component, but they only account for a
relatively small part of the total level of trade costs in most countries. Non-tariff measures are also important, including
product standards, as well as other types of regulation that make it more costly to do business abroad than at home. The
business environment and commercial and governance institutions also matter because they affect the cost of doing
business for foreign firms. Over the last two decades, trade in services has expanded rapidly to reach more than a fifth of
global trade flows. The participation of developing countries in this trade has increased dramatically, rising from 11% of
world services exports in 1990 to 20% in 2011. As an input into other economic activities, services are a direct determinant
of country’s competitiveness. Services such as telecommunications, energy, transport and business services are critical
inputs into the production of goods and other services and influence productivity and competitiveness. Opening up
to services imports and Foreign Direct Investment (FDI) can be an effective mechanism to increase the availability,
affordability and quality of these services, which are crucial for export diversification, economic growth and poverty
reduction. In addition, services can offer dynamic new opportunities for exports (World Bank, 2015 monitoring exercise).

Services trade also involves transaction costs. Where pure cross-border trade is possible – for instance, via the internet –
issues such as transport costs do not arise. Nonetheless, there may be issues of regulation or infrastructure investment
that generate friction. Trade in services is governed entirely by domestic regulation. The regulatory framework governing
services trade includes a vast range of domestic laws and regulations in areas that often include land ownership,
establishment of foreign companies and migration policies. They exist in sectors as diverse as banking, professional
services, transport, education and tourism. Laws and regulations on services sectors are generally dispersed throughout
different government agencies and not easily accessible. As a result, the regulatory environment for trade and investment
in services is often opaque and unpredictable, which impairs the investment environment and limits the policy making
capacity (World Bank, 2015 monitoring exercise).

For instance, online banking is legal in many countries, and in many cases is open to international customers. However,
many countries prohibit foreign banks without a local presence from advertising their services domestically, which
means that it is relatively difficult for them to do business in a competitive marketplace. Regulatory heterogeneity—the
ability to advertise in their home markets but not overseas—is a source of trade costs in the services sector, even in cases
where pure cross-border trade is now possible. Of course, there may be strong rationales for regulation in some cases—
such as consumer protection—but many countries could still benefit from making their services sector regulations
more effective and efficient, which would tend to lower trade costs.

A further source of friction is that such services trade relies on the provision of backbone infrastructure services, such as
phone networks or broadband connectivity, without which the service cannot be traded. Another example here would
be tourism and transport infrastructure. Sierra Leone cited poor internet connectivity countrywide and poor transport
infrastructure, especially in the attractive tourist destinations in the country, as the biggest bottlenecks or sources of
trade costs for services. Likewise, Costa Rica highlighted shortcomings in transport infrastructure affecting the tourist
sector, which is Costa Rica’s largest export service sector. It also stated Costa Rican professionals face trade costs by not
being able to exercise in other countries because of restrictions related to recognition of qualifications. (Costa Rica, 2015
monitoring survey)

Integration of goods and services markets has been proceeding apace in most parts of the world in recent decades.
Nonetheless, trade costs remain surprisingly high. Anderson and Van Wincoop (2004), for example, review the available
literature on goods trade and conclude that a reasonable estimate for the trade costs faced by a representative
developed country are around 170% of the producer price of exported goods. The total is made up of international
trade costs of around 74% and domestic distribution costs of around 55% (because they are typically referred to in
ad valorem equivalent terms, trade costs are multiplicative not additive – the 170% figure therefore comes from
multiplying 1.55 by 1.74 to get 2.70).

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CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

BOX 1.3 Services trade costs – more research required

Better evidence is needed on what the major sources of costs are for services exports in developing countries
and the economic benefits of addressing these costs. World Bank studies have noted that since the 1990s services
exports of 20 key developing countries have grown by over 15% annually. It is expected that there are considerable
economic benefits from the better movement of people across borders. Greater transparency around labour mobility
requirements would aid in further movements of natural persons. Related to this, non-recognition of professional
qualifications would make it difficult or impossible for professionals to export services from developing countries.
There are also a number of other factors which affect developing countries’ ability to participate in services trade,
including investment in human capital (through health and education services) and institutional impediments (for
example, poor regulatory environments for services hamper the development of competitive services sectors in
developing countries). In addition, poor and non-competitive infrastructure (e.g. telecommunications) and inadequate
financial services inhibit the ability of services providers to efficiently deliver and advertise services. There is also a
significant correlation between investment and services trade. Encouraging further FDI is important for increased
services exports by developing countries.

Source: Australia, OECD/WTO Aid for Trade monitoring exercise, 2015.

Of course, recent years have seen significant declines in global trade costs (see Chapter 2). Technological innovations,
such as the ability to connect buyers in one country with sellers in another through the internet, have made it easier for
small firms, and even individuals, to participate in international trade. A case story submitted for the 2015 monitoring
exercise provides a snapshot of eBay commercial sellers in Chile, Peru, Ukraine, South Africa, Jordan, India, Indonesia
and Thailand. The case story authors argue that there is evidence of a real democratisation of trade due to lower trade
costs associated with electronic transactions: 95% of these commercial sellers export to on average more than 30
markets around the world. Moreover, 60-80% of businesses survive their first year, which is about double the rate for
the traditional business sector. eBay estimates that barriers related to distance are 83% lower for sales conducted via an
electronic marketplace and that the figure is even higher for developing countries, at 94%.

Of course, business models like eBay and other e-commerce platforms cannot function without express delivery
services. Those services have taken off in recent years and now reach most parts of the planet. Express delivery is a
major international industry and its workers deal with trade costs on an everyday basis. Globally, the industry directly
employs over 500 000 workers (GEA, 2015). Reducing trade costs makes it easier for express delivery services to move
goods quickly, cost effectively and reliably from one place to another, including small shipments related to electronic
transactions.

Policy matters for trade costs in goods markets

Trade costs in goods and services markets can be loosely classified under two headings: locational factors and policy-
related factors. Locational factors are exogenous: each country must take them as a given and cannot change them.
They include issues such as sharing a common land border, geographical distance and remoteness, being landlocked
or a small island state, having a population that speaks one of the main international languages and historical and
commercial links with other countries.

Although countries must take geography and history as given, that does not mean that the trade costs related to those
factors are completely impervious to government action. Geographical remoteness, for example, tends to increase
trade costs substantially and poses particular problems that governments need to work hard to solve.

Policy makers can limit the effect of remoteness by developing the hard and soft infrastructure needed to build an
economy that is strongly connected to global trade, transport and production networks. High country connectivity
based on appropriate policies can reduce trade costs and limit economic remoteness, even though geographical
remoteness in the strict sense cannot be changed.

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 CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

BOX 1.4 The Pacific agreement on closer economic relations (PACER) plus

The Pacific Islands are some of the remotest economies on earth. They are far from major trade routes and even
from each other, which makes trade integration difficult. They face particularly high levels of trade costs as small
island developing states. The PACER Plus agreement currently under negotiation is designed to support Pacific Island
countries’ increased participation in international trade. The Agreement will not be a traditional free trade agreement
as its primary objective is to promote the economic development of Pacific Island Countries. It contains chapters on
issues such as Customs Procedures, Transparency, SPS and TBT measures and co-operation fora chapter on economic
and development, including addressing supply-side constraints co-operation. The latter will assist developing country
parties to implement the Agreement and maximise the benefits flowing from it. The two developed country markets
will be sources of technical assistance and capacity building in various areas, in particular trade facilitation, in line with
the new WTO TFA agreement.

Source: Office of Chief Trade Adviser, Joint OECD/WTO Aid for Trade monitoring exercise, 2015.

The case of trade costs that stem from policy-related factors is even starker: action by Policy makers can reduce such
costs substantially because they have endogenous causes. Policy measures affecting trade costs come in three types:
at the border, between borders and behind the border (Figure 1.6).

Figure 1.6 Types of trade costs in goods markets

Between the border
measures
(e.g., transport)

At-the-border measures Behind the border

(e.g., tariffs and customs measures
and border procedures) (e.g., product standards)

TRADE COSTS
IN
GOODS
MARKETS

Source: Shepherd 2015.

Recognition of the importance of trade costs needs to be distinguished from action by governments to reduce trade
costs. For example, while 87% of the 62 developing and least-developed country respondents to the 2015 monitoring
exercise recognised the importance of trade costs, only 62% of respondents indicated that trade costs were addressed
in their national development strategies, 60% in their national trade strategies and 53% in sector-specific strategies.
Interestingly, the percentage is less for infrastructure strategy (35%), although this sector is one that has considerable
potential to influence trade costs and performance.

The picture at the regional level is similar: 80% of respondents indicate that the regional development strategy addresses
trade costs, 60% in the case of the regional infrastructure and trade strategies and 50% for sector- and corridor-specific
strategies. While there is clear recognition of the importance of trade costs, there are difficulties capturing this insight at
a policy level, both nationally and regionally. This is especially true on the side of donor partners.

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 43
CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

All 37 donor countries and agencies which responded to the 2015 monitoring exercise recognised the importance
of trade costs, with 54.1.% of them indicating that trade costs are very important to the integration and development
of countries and LDCs and 45.9% considering them important. However, only 59.5% of donor countries’ aid-for-trade
strategies specifically address the issue of trade costs. Of course, trade costs issues are still reflected in aid-for-trade
programming, particularly in regional projects and programmes and in country work (73.0% and 64.9% respectively).

One set of border policies that affect trade costs in a very direct way relates to trade facilitation, i.e. customs and other
border procedures. When those procedures are slow, expensive or unreliable, costs to business increase – with a resulting
impact on trade costs. Trade facilitation reforms can therefore reduce trade costs, and the WTO agreement on Trade
Facilitation (TFA) provides one framework for moving forward in this area. The OECD has estimated full implementation
of the new WTO agreement could reduce developing countries’ trade costs by 14% for low income countries, 15% for
lower middle income countries and 13% for upper middle income countries (OECD, 2014).

Trade facilitation in this sense is of particular importance in some contexts. For example, India and Pakistan have only
one permitted land border crossing, at Attari-Wagah. In 2012-13, 54% of India’s imports from Pakistan and 25% of India’s
total exports to Pakistan passed through this crossing, even though only a restricted list of products is allowed to
be traded. Historically, this border crossing has been well known as a chokepoint for traders. However, recent trade
facilitation measures appear to have improved performance somewhat. India has introduced an Integrated Check Post,
with a dedicated cargo building, an export warehouse and truck parking facilities. Similar facilities are being developed
in Pakistan. Border crossing hours have been increased from eight hours per day to 12, and truck capacity has been
increased tenfold. Trade facilitation has brought concrete benefits to the trading community in the form of lower trade
costs and higher volumes. (CUTS, 2015 monitoring exercise)

The TFA deals with one set of factors that determine trade costs in goods markets, namely customs and other border
procedures. However, many other policies are also at play. As already mentioned, transport plays a key role. On the one
hand, goods have to be moved internationally, so policies governing the development and operation of maritime and
air gateways have the potential to affect trade costs. Similarly, policies governing air and maritime transport are also
relevant. Countries that sign liberal bilateral air services agreements can expect to see their trade costs go down for
goods transported by air, such as parts and components that circulate through global value chains (GVCs) or horticultural
products and new agricultural productions. Some countries limit competition in some aspects of their maritime services
sectors, such as cabotage (movement between domestic ports), with resulting increases in trade costs.

Figure 1.7 Changes in road governance conditions 2010-2013 in West Africa

USD
50 9.7

8.2 8.1 8.0 8.0 8.1

40
7.2
6.2
30
25 5.8
2.4 2.4 24
4.5 4.5 4.5
4.3
2.0 2.3 19 20 20 2.0
1.9
Bribes (USD)
20 2.1 1.7
15 2.0 1.9 1.6 Number of checkpoints
1.7 1.8 18
15 Delays (min)
16 14 16 16
14
10
Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13

Source: West Africa Trade Hub

Source: West Africa Trade Hub 12http://dx.doi.org//10.1787/888933240732

44 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

So far, the analysis has focused on policies at and between borders. But behind-the-border policies are also relevant
(e.g. Moïsé and Le Bris, 2013). Wholesale and retail distribution, as well as transport and logistics, determine the ability
of producers to get their goods to market in a cost-effective way. Countries with poorly performing distribution and
logistics networks tend to suffer from high trade costs and can become insulated from world markets. In some countries
in West Africa, for example, completion of national markets – not just the interface between national and international
markets – is an issue. Roadblocks are frequent along main trucking routes (Figure 1.7), which lead to significant delays
and the prevalence of unofficial “speed money” payments that add to overall transaction costs and uncertainty. A
trade costs priority for these countries is reducing or eliminating internal roadblocks, which is not an easy matter in
an environment of weak and fragmented governance. It is, however, an area in which local governments and regional
institutions are active. Despite the difficulties, progress has been reported between 2010 and 2013 in addressing this
issue through the West Africa Trade Hub/UEMOA Improvement in Road Transport Governance Project (IRGT).

Another policy question of relevance for trade costs is product standards. This is a type of behind-the-border measure
that is usually not protectionist in intent but can be in practice because of the competitive advantage it creates for
national firms. Overseas firms need to certify their products and production processes to meet foreign norms, an often
expensive proposition, which adds to the wedge between producer and consumer prices. Box 1.5 highlights some of
the concerns raised by respondents as part of the 2015 monitoring exercise.

A case story submitted by the World Bank suggests that in Central America, non-tariff measures are creating obstacles
that hinder effective trade integration - with the issue being less about the measures enacted and more about the way
they are applied in practice. The Bank study estimates that SPS measures—such as inspection requirements or labeling
standards for meats and grains – increase import prices in Central America by approximately 30% on average.

In one country, the entry of foods and drinks into the sanitary registry – a process that verifies that all the products
meet the country’s SPS standards – requires between 48 hours (for low-risk goods) and 20 days (for goods that require
laboratory testing). The exporting company must then spend two to four weeks preparing a product file. They must also
pay between 250 and 450 US dollars per item registration. The Bank study suggests that when faced with this type of
requirement, some companies – especially if they are small – abandon the effort altogether. The Bank study concludes
that while non-tariff measures are effective policy tools to achieve non-trade objectives, such as the protection of
human, animal and plant health, the imprudent use of these measures can hurt poor consumers.

BOX 1.5 Examples of trade costs associated with product standards, cited by 2015 monitoring respondents

“Other issues currently exist such as the connection between non-tariff barriers and new trends regarding approval
of products by consumers, which are reflected in private standards.” Guatemala
“Yemen’s exports to the Gulf countries face border processing and non-tariff obstacles without appropriate
justifications.” Yemen
“Trade costs depend on markets. In Africa the costs are related to border procedures, while in the EU they are geared
towards stringent standards.” Mauritius
“According to the series of studies by the UNECE (United Nations Economic Commission for Europe) on regulatory
and procedural barriers to trade, non-tariff measures, such as standardisation (standards, standardisation policy, use
of national, regional and internationally agreed standards), and regulatory issues are a significant source of barriers to
trade.” UNECE

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CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

Research undertaken by the Standards and Trade Development Facility concludes that countries can make huge
progress in reducing SPS trade transaction costs, while simultaneously strengthening or reinforcing the protection of
human, animal and plant health, through proper implementation of the WTO SPS Agreement and implementation of
measures in the WTO Trade Facilitation Agreement.

More generally in the area of behind-the-border measures, it is necessary to consider issues such as the business
environment and investment climate, which affect the ability of firms to do business internationally. Finance is also
crucial: as seen during the Great Trade Collapse, trade finance plays a key role in enabling private sector operators to
move goods across borders. Indeed, it is important to remember that it is the private sector that trades. Governments
put in place regulations, institutions and structures, but it is people and businesses that buy and sell goods and services.
As a result, private sector development is also a key part of the trade costs agenda.

Figure 1.8 summarises the above discussion by means of reference to a broad set of trade cost factors that are of
relevance to many countries.

Figure 1.8 Policies affecting trade costs in goods markets at all points in the supply chain

GETTING TO THE BORDER AT THE BORDER BEYOND THE BORDER

Trade finance Tariffs Regulations Institutional

Export restrictions
(NTMs) structure

Access Foreign Direct costs

to credit currency Quotas Standards Business
& exchange Logistics services TBTs, SPS environment
rate Supplying info Supplying info
& docs. & docs. Transparency
Private sector
participation Procedural delays
Services, trade
Competition
policy Indirect costs
Direct barriers; ICT
Hard infrastructure foreign ownership, R&D
Opportunity costs Inventory holding
MA restrictions
Smuggling Implicit barriers;
Inland transit Seaports, aeroports and info. trade licensing, recognition

Hidden costs

Corruption & bribery

TRANSPORT
TRADE CHAIN

EXPORTING COUNTRY IMPORTING COUNTRY

Source: Moïsé and Le Bris (2013).

As this section has made clear, trade costs come in a variety of different forms. However, each country has its own
particular circumstances. A particular constraint may be binding in one country in the sense that it represents the main
source of trade costs that prevents businesses from engaging with the world economy. The critical policy may be
something quite different in another developmental or regional setting.

46 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

The OECD-WTO survey provides some information on the types of trade costs that are most important in partner
countries (Figure 1.9). The most commonly identified are trade facilitation (in the sense of customs and border
procedures), transport infrastructure and non-tariff measures, including product standards. Each of these areas is one in
which aid for trade can play an important role. In the case of trade facilitation, aid for trade is built into the architecture
of the new WTO Agreement, so there is a strong chance that progress in this area will be possible with a combination
of political will in partner countries and mobilisation of resources in donor countries. Transport infrastructure is a key
component of traditional aid-for-trade spending, and Figure 1.10 indicates that although progress has been made
critical needs obviously remain in partner countries. Finally, non-tariff measures like product standards are frequently the
subject of technical assistance programmes run by donor agencies – either governmental or multilateral organisations
– and have real potential to reduce the trade cost burden on partner country exporters.

Figure 1.9 Number of partner country survey respondents indicating that a particular
source of trade costs is important (goods)
Transport infrastructure 51
Border procedures (trade facilitation) 50
Non-Tariff Measures (including standards) 48
Access to trade finance 36
Network infrastructure (ICT, power, telecoms) 34
Tariffs, fees and other charges 29
0 10 20 30 40 50 60
NUMBER OF RESPONSES

Source: OECD/WTOAid for Trade monitoring exercise (2015).

12http://dx.doi.org//10.1787/888933240746

In the context of aid for trade, it is important to ensure that partner country and donor country priorities are aligned.
That appears to be the case in the area of trade costs in goods markets (Figure 1.10). The top three priorities are the
same: trade facilitation, transport infrastructure and non-tariff measures such as product standards. The evidence in this
case suggests that donor countries and partner countries have a sound basis for working together to reduce the most
important sources of trade costs in the developing country context.

Figure 1.10 Number of donor country survey respondents indicating that a particular
source of trade costs is important (goods)

Transport infrastructure 31
Border procedures (trade facilitation) 29
Non-Tariff Measures (including standards) 29
Access to trade finance 18
Network infrastructure (ICT, power, telecoms) 13
Tariffs, fees and other charges 11
0 5 10 15 20 25 30 35
NUMBER OF RESPONSES

Source: OECD/WTOAid for Trade monitoring exercise (2015).

12http://dx.doi.org//10.1787/888933240756

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CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

One example reported of a successful aid-for-trade initiative in an area identified as important by partner countries and
donors alike is Japan’s support for One Stop Border Posts (OSBPs) in East Africa. Japan has worked with local counterparts
to develop OSBPs on key routes in the region. As the project enters its advanced phases, the focus is now shifting to
capacity building to ensure that customs and border agencies are well versed in the operation of these facilities. It
can be expected that this series of interventions will reduce trade costs on key economic corridors in the region, with
corresponding economic benefits.

This example is by no means an isolated one. According to the OECD-WTO survey, partner countries, with donor support,
have been active in pursuing aid-for-trade activities aimed at reducing trade costs. Over 93% of partner countries have
taken action on trade facilitation, and the corresponding figures for infrastructure and non-tariff measures are about
70% and 68%. There is clear evidence of activities aligned with common priorities.

Services policies also affect trade costs

The discussion so far has focused on trade costs in goods markets. But as mentioned at the outset, trade costs in
services are also significant. Border measures like tariffs usually do not apply in services markets, but a variety of other
issues can contribute to trade costs in the services sector. Recent estimates suggest that despite technological advances
like e-commerce, trade costs in services sectors may actually be substantially higher than in goods sectors, perhaps as
much as double (Miroudot et al., 2013).

Firstly, there are policies that directly restrict trade in services. The WTO’s General Agreement on Trade in Services (GATS)
recognises four ways in which services can be traded, known as modes of supply (Figure 1.11). Mode 1 most closely
resembles goods trade: it is pure cross border trade, for example, through the internet. Some countries apply direct
restrictions on this kind of trade in certain sectors – such as the retail banking example cited earlier. More generally, the
ability to engage in pure cross-border services trade depends on the quality and quantity of ICT infrastructure that is
available, as well as the way in which access to and use of the infrastructure are regulated. Better connected countries
can be expected to have lower trade costs for Mode 1.

Figure 1.11 Trade in services under the GATS

Mode 2: Mode 3:
movement of the consumer commercial presence

Mode 1: Mode 4:
pure cross-border temporary movements
GATS of service providers
TRADE IN SERVICES

Source: Shepherd 2015.

Although Mode 1 services trade is becoming more important, proximity between the producer and the consumer
remains necessary in many sectors. For that reason, GATS Mode 3 is often the preferred means of services trade for
business. Under Mode 3, services are exported from a country when one of its firms sells services to foreigners through
a subsidiary set up in the importing country. Explicit trade policies again affect firms’ ability to enter markets through

48 AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015
 CHAPTER 1: WHY TRADE COSTS MATTER FOR INCLUSIVE, SUSTAINABLE GROWTH

Mode 3. Some countries apply restrictions on commercial presence in certain sectors, for example, only permitting
foreign companies to enter the market through a joint venture with a local company or setting foreign ownership
limits. Restrictions on commercial presence, such as a form requirement, limit a company’s ability to compete in the
marketplace in the most efficient way possible and therefore increase trade costs.

GATS Mode 4 is also a potentially important way for services to be traded internationally. In this case, the service provider
(a natural person) moves temporarily to provide the service to the overseas consumer and then returns home. Globally,
Mode 4 trade is relatively restricted. One possible reason is that Mode 4 trade intersects with countries’ visa regimes, and
this trade is seen as having potential implications for local labour markets.

Common to all the GATS modes of supply is the issue of regulation (Figure 1.12). And it is not just border regulations
that matter for trade costs. As in the case of goods, behind-the-border regulatory measures also play an important role.
Particularly in the case of services, an important factor is regulatory heterogeneity, i.e. differences in sectoral regulations
between countries. Services firms develop their business models based on a particular regulatory and institutional
environment. Making that business model work in a foreign setting can be challenging because the regulatory and
institutional environment may be quite different. Transactions that can be legal in one form in one country may need to
take a different form in another. Advertising needs to be adapted to meet not only local standards but also local tastes
and interests. More generally, services need to be tailored to meet the environment in which they are being supplied.
All of this adds to the cost of doing business abroad as opposed to at home. To a large extent, it is likely factors such
as these that make it plausible that despite improvements in ICTs, trade costs in services remain high, potentially even
higher than in goods markets, as noted above.

Figure 1.12 Partial typology of policy measures affecting trade costs in services, according
to the GATS mode of supply

MODE 1 MODE 2 MODE 3 MODE 4

Legal form
Restrictions on requirements, Visa requirements
Typically
pure cross-border including for temporary
lightly regulated
trade joint ventures workers

Limitations on
Limitations Foreign ownership movements of
on e-commerce limits company officials

Local content
requirements

Repatriation
of profits

Source: Shepherd 2015.

Respondents to the OECD-WTO monitoring exercise provide an indication of the most important sources of trade costs
affecting services’ trade (Figure 1.13). The two most commonly cited are network infrastructure, such as information and
communication technologies, and transport infrastructure. These issues are important to all service providers because
ICTs are typically an important input into the production of modern services. However, network services are of particular
importance to services traded by GATS Mode 1 (pure cross-border supply), which includes international e-commerce.

AID FOR TRADE AT A GLANCE 2015: REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH - © OECD, WTO 2015 49
Exploring the Variety of Random
Documents with Different Content
mistress, "It is impossible, ma'am, you can put up here; you never
saw such a slovenly place in your life." "I am sorry to say," replied
Colonel Desmond, in answer to her interrogatories, "there is no
better between this and Ballinamoyle: you may remember, I told
you, the canal would take you out of the direction of the high road,
and that you would be very miserably accommodated; you will now
have to put up with a carman's inn."
There was no option; therefore the ladies entered through a kitchen,
which also served as bar and larder. A set of carmen were sitting
drinking whisky punch and smoking tobacco (the same pipe passed
from one mouth to another in turn); they very civilly rose, and went
out, till the newly arrived and unusual guests should make their
arrangements. The ladies were shown into a parlour, where a pretty
looking, but bare legged and bare footed girl, was turning up a press
bed, that had remained untouched since the last occupier had slept
in it. They agreed to walk out till this place should be swept, and get
"a wipe," as the maid called dusting it, previously pushing up the
window sash with some difficulty, as the paint stuck together, from
the length of time it had been unopened. To the inquiry for beds,
she answered, "Troth, we've four brave good beds; and ye'z can
have dry lodging at Susy Gologhan's, or Gracy Fagan's, over the way,
there beyant, for the sarvant maids and the boys." Mrs. Sullivan
declined ascending to the second story, when she saw the house
had no regular stairs, but that merely a sort of ladder, without any
thing to serve as bannister, led to the loft above. The Miss Webberlys
declaring once going up would be enough for them, requested
Adelaide to reconnoitre the premises. "You know, Miss Wildenheim,"
said Amelia, "you're used to travelling in outlandish places; and an't
afraid of nothing.—I think I'll sit up all night, rather than mount the
ladder, and walk along that unrailed passage." Adelaide, quickly
ascending the redoubtable ladder, opened a door the maid pointed
to, which led into a small close room, with two beds.—It was lighted
by three little panes of glass fastened in the wall, but looking up, she
saw a large door with one hinge broken, laid against an aperture in
the roof, which she determined to turn to account, and begged it
might be set open to admit fresh air into the apartment. "Have you
not another room?" said she. "Aye, sure, and that we have, dear,"
replied the maid, leading her along the passage. They went into a
second, rather closer and smaller than the first, with no friendly hole
in the roof, to admit the breath of heaven to visit it. Adelaide,
looking on the bedstead, perceived the bed clothes move, and, out
of a mass of black hair, saw two dark eyes shoot fire at her. "Pray,
what's that?" said she, catching hold of her attendant's arm. "Och!
it's only the poor soldier, Miss, just come back to his people, from
the big battles over seas; but he'll give his bed to you, with all the
pleasure in life, if you fancy it, Miss."—"Not on any account," quietly
replied Adelaide, as she quickly retreated to the passage—"I should
be very sorry to disturb him. Mrs. O'Sullivan will sleep below stairs;
and we young ladies can occupy the double-bedded room: will you
have the goodness to show me your sheets?" These she was
surprised to find not only white, but fine, forgetting that linen was
the staple manufacture of the country, though but lately introduced
into this district.
This affair being settled, she joined the party in a walk; and, on their
return, they found their little parlour laid out tolerably comfortably
for tea; the kitchen, through which they had to pass, was swept
clean; all traces of the carmen, their punch, and tobacco, had
disappeared; and they might, by diverting themselves with the
oddity of their situation, have found amusement for the evening, had
not the Webberly family, encouraged by the dilettante, made, every
five minutes, some acrimonious speech against the country and its
inhabitants, which rendered themselves inclined to find every thing
even more uncomfortable than it really was. Adelaide was pained by
the rudeness of this conduct to Colonel Desmond, who, however,
treated it as it deserved, and quizzing them all from right to left, his
raillery soon silenced Felix and Amelia, who had sense enough to
understand his ridicule. Tea was scarcely over, when the most
extraordinary uproar was heard. Every man, woman, and child in the
village seemed to have assembled about the house, all talking in the
most vehement manner!
The gentlemen, much alarmed, went out to inquire "what was the
matter?" and beheld two men, sawing across the wood-work of the
upper part of the gateway belonging to the inn yard, which was too
low to admit Mrs. O'Sullivan's carriages. As usual, when any thing is
done out of doors in Ireland, every person within ken had repaired
to the scene of action. Two out of three were giving contradictory
directions, whilst the operators were swearing tremendously at the
crowd, bidding them "go along about their business." "Hard for us to
do that same!" answered one, in the name of the rest, "when sarra
hand's turn of business we're got to our kin or kin kind, till shearing
time comes, barring sitting in the chimney corner doing nothing."
Messieurs Webberly and Donolan took this inauspicious moment to
rate at the men who were sawing the gateway, expressing, in no
very gentle terms, their dissatisfaction with the inn, and all its
appurtenances. The men suspended their operations; and one of
them, crossing his arms, his head on one side, and his chin stuck out
with a gesture of contempt, said, in a drawling tone, as he looked
down on them, from the top of the gateway, "Och! then, and it's
grander quality than ever ye were have been here, and never gave
me no bother at all at all! Upon my sowl, myself is cruel misgiving ye
are but half sirs, both of ye'z. It's long before you'd see the Curnel,
that's the real sort, (long life to his honour,) take on him so! If ye
don't like the place, in the name of the Lord, make aff wid ye'z: if ye
can't be agreeable, by the powers, we'd rather have your room nor
your company."—"But where would ye see the likes of the Curnel
any how?" rejoined a female orator of the assembly. "Sarra man,
within twenty miles of himself, that's the fellow of his brother, for
standing a poor man's friend on a pinch! It's the family that have
been good to me and mine, these hundred year before I was born,
and will be after I'm dead, if I've any luck."
The greater part of these harangues was unintelligible to Mr.
Webberly, but the dilettante understanding the dialect of the country,
though he often pretended he did not, as in the present instance,
took his companion's arm, and, without proffering another syllable,
walked into the house.
In nothing do the lower Irish show their quickness of apprehension
more decidedly, than in distinguishing, as it were at a glance, what
they call "the real quality," that is, those who inherit a certain station
in society, from "les nouveaux riches." Their exact discrimination on
this subject is quite astonishing. Mrs. O'Sullivan could not perhaps
have visited ten cottages in Ireland, whose inmates would not, in a
few minutes, have discovered she was a low bred woman, who
attempted to give herself airs of consequence. During her stay in
this country, this foible was every where perceived, and profited by.
The adroit flattery she received, on this favourite point, perhaps
drew more money from her than she had ever before, in a given
space of time, spent gratuitously, either from motives of charity or of
generosity. The cunning arts, that opened her purse, were,
undoubtedly, highly reprehensible in a moral point of view. But why
should we expect more upright disinterestedness from the ignorant
and necessitous class of mankind, than we hourly meet with from
the independent members of the upper ranks of society, who will
delude a king or an emperor, with as little compunction as the poor
Irish cottager cheated Mrs. O'Sullivan? In the latter instance,
however, the mischief began and ended with the parties concerned;
whilst in the former, generations yet unborn may mourn the evils
resulting from base adulation.
As all the party assembled in the inn parlour were, with the
exception of Adelaide and the merry little Caroline, out of temper,
they, by a sort of tacit agreement, separated at an early hour. The
parlour was then converted into a sleeping room, for Mrs. O'Sullivan
and Caroline, a bed being constructed for the latter with the carriage
cushions, and a contribution of pillows. When the Miss Webberlys
ascended the ladder leading to their apartment, the maid of the
house went before, and the mistress behind, to help them up; the
former holding a candle, stuck into a hole scooped out of a large
potato, all the candlesticks the inn was possessed of, three in
number, being appropriated to the use of the ladies. Adelaide had
reserved the worst looking bed to herself, and was scarcely
deposited in it, when down she sunk, and a more romantic
imagination might have supposed some such adventure was going
to occur, as was said frequently to have happened in a remote
auberge in the Black Forest, where travellers were drawn down
through trap doors, and murdered. But she was only alarmed by the
dread of the less heroic death of being knocked on the head by the
bed posts. Springing up with the utmost expedition, she found, to
her great delight, that the bedstead was perfectly secure; but,
proceeding in her search as to the cause of her recent disaster,
discovered that the sacking, which ought to have been laced to
support the bed, had been deprived of its cord, in order to apply it
to some other use. It never was, and most likely, never will be
replaced; but the bed, being dexterously poised on the edge of the
boards which connect the posts, will give the same surprise to every
one who sleeps in it, for many a year to come. After no little
laughter, Adelaide went into bed again, just as it was; and the inn
being perfectly quiet, all its visitants slept till a late hour the
following morning. After breakfast they recommenced their journey;
and as they repaired to the carriages, their attention was attracted,
by hearing the woman who had been so warm in praise of the
Desmond family the evening before, say to her friend (carrying a
basket of gingerbread on her arm), with the utmost seriousness of
countenance and vehemence of gesticulation, "The low-lived
blackguard! to even such a thing at me! All my people that went
before me, and all that came after me, were gintlemin and gintle la
—dies. See dat now, Susy dear!" Our party were not a little
entertained at the figure and gesture of this extraordinary sprig of
gentility, and continued to look after her as long as the carriages
were in sight.
In the course of the morning they reached Tuberdonny, which was
within a few miles drive of Ballinamoyle, but here only one pair of
horses could be procured; they therefore had the pleasant prospect
of spending another night as agreeably as the last, as no more
horses were expected there till the following day. For some hours
they found amusement in viewing the antiquities of Kilmacduagh,
close by, consisting of seven antique churches; an abbey, with very
curious workmanship on its walls; and the most remarkable round
tower in Ireland, constructed with immense stones, which rises to
the height of one hundred and twelve feet, and, strange to say,
leans seventeen feet out of the perpendicular, which is four more
than the celebrated leaning tower at Pisa.
As the travellers returned towards the place where the carriages had
been put up, they saw five horses, mounted by twice as many men
and boys, galloping furiously down the street; and, at the sight of
the servants in livery, the riders set up such a hurraing as was quite
deafening. Jumping quickly off, two or three of them came up with
"Long life to your honours! Myself's right glad to see your honours!"
"Why, what the devil do you know about our honours?" said Colonel
Desmond, laughing. "Didn't I hear at Kurinshagud, that your honour
passed through Ballycoolen, in two carriages? and haven't I been
hunting ye all round the country this blessed morning, thinking you
might want cattle? It's I that will drive you to the world's end in a
crack!" The horses were soon harnessed, and Colonel Desmond and
Mr. Donolan, after handing the ladies into the carriage, made their
parting bows, and pursued their way to Bogberry Hall.
Mrs. O'Sullivan did not reach Ballinamoyle till half past twelve at
night; for the horses, being not much the better for the morning's
chase, proceeded but slowly up a mountainous road. From the
lateness of the hour, she did not, on that night, see Mr. O'Sullivan;
who, finding himself indisposed in the evening, had unwillingly
retired to bed, delegating the task of receiving his guests to his
cousin, an ancient virgin, who presided over his ménage, and who
gave the travellers, if not a courtly, at least a cordial reception; and,
after doing the honours of an excellent supper, conducted them to
their sleeping rooms, which they most gladly occupied, and enjoyed
all the luxury of the sensation of comfort, as they compared them to
those they had the night before inhabited, in the miserable cabaret
at Ballycoolen.

END OF VOL. II.

[1]

I know, Olalla, that thou lov'st me,

Though words have ne'er thy flame confess'd;
Nor even have those guarded eyes,
Mute tell-tales of love's embassies,
Betray'd the secret of thy breast,—
Yet still, Olalla, still thou lov'st me.

[2] The false propriety which she preaches is more dangerous than vice itself,
inasmuch as it seduces by an appearance of reason—inasmuch as it recommends
the usages and the maxims of the world in preference to strict integrity—inasmuch
as it makes wisdom appear to be a certain medium between vice and virtue.
[3] What should I do at Rome, unknowing how to feign?
[4]

When tremblingly I raise my eyes

To view that form, which in my breast
The hand of Love has deep impressed,
My shiv'ring frame, in sudden trance,
Congeals beneath thy lightning glance;
But soon my heart, in broken sighs,
Renews the tale it told before,
And, counting all thy beauties o'er,
Dwells on thy talents, virtues rare,
Thy mind so pure, thy form so fair,
Till even hope amid the whispers dies.

N. B. Freezing beneath a lightning glance, in the original—a fair example of Italian

concetti.
[5]

Remember still love can dissemble,

And even with the wisest tremble;
For when we think there's nought to fear,
Often danger's lurking near.

[6]

At least allow that in the track,

Once mark'd by joys now fled,
My wandering thoughts may trace the path
Which thy dear footsteps tread:
For once where'er those footsteps stray'd,
Still, still beside thee I delay'd.
[7] Proceeding from a frivolous head and a cold heart, their object is to express to
women all that men do not feel, and all they wish to persuade them they do.
[8]

Alas! then where should happiness be sought?

In Nature's self.—Cast but thine eyes around,
In every place, in every age, 'tis found;
No where entire, but always in degree,
And fleeting still, except, Oh God! with thee,
(Thou its great Author.) Like thy fire, its heat
In every other element we meet;
Deep in the bosom of the harden'd stone,
As in the clouds its vital power we own;
In ocean's caves, in coral beds it glows,
And lives beneath the glacier's endless snows.

As the reader may find it not uninteresting to compare the ideas of such great
writers as Pope and Voltaire on the same subject, the opening verses of the fourth
epistle of the Essay on Man are here subjoined, though perhaps an apology is due
for transcribing lines impressed on every English memory.

Oh Happiness! our being's end and aim!

Good, Pleasure, Ease, Content! whate'er thy name:
That something still, which prompts th' eternal sigh
For which we bear to live, or dare to die;
Which still so near us, yet beyond us lies,
O'erlook'd, seen double by the fool and wise.
Plant of celestial seed! if dropp'd below,
Say, in what mortal soil thou deign'st to grow;
Fair op'ning to some court's propitious shine,
Or deep with diamonds in the flaming mine?
Twin'd with the wreaths Parnassian laurels yield,
Or reap'd in iron harvests of the field?
Where grows? where grows it not? If vain our toil,
We ought to blame the culture, not the soil:
Fix'd to no spot is happiness sincere,
'Tis no where to be found, or ev'ry where;
'Tis never to be bought, but always free,
And, fled from monarchs, St. John! dwells with thee.

[9]
 Delightful spring! youth of the year,
Thou blooming mother of the opening flowers,
The fresh'ning verdure, and the new-born loves—
Thou now returnest! But no second spring
Will e'er return of those serene delights,
That bless'd my fleeting hours of happiness—
Thou now return'st! But with thee nought returns
To my sad thoughts but renovated sorrow,
And bitter mem'ry of departed joys.
[10] He is saturated with graces! His every gesture is of refined elegance; his
every word an enigma. He investigates and discusses trifles with infinite dexterity,
and is more completely master of the etiquette of gallantry than all the Scuderies
of the universe.
[11] Verbatim.
[12]

——I despise
A beardless censor, that with Cato's frown,
Assumes the pedant in a scholar's gown:
Mere vacant folly, void of all pretence,
Is sure less hateful than affected sense;
He is too vain.

[13] "A propos to fools; that gentleman is in love—that is not very surprising; but
is the fair lady equally enamoured?"
"Oh! Heaven forbid!"

Printed by S. Hamilton, Weybridge, Surrey.

[Transcriber's Note: Hyphen variations within volume and between

volumes left as printed.]
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