Global enabling trade report

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Global Enabling Trade Report 2012 finds Europe the most willing to allow the free flow of goods across borders.

The report ranks 132 countries worldwide and measures their trade preparedness. Bangladesh jumps from position 113 to 109

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Global enabling trade report

  1. 1. Insight ReportThe Global EnablingTrade Report 2012Reducing Supply Chain BarriersROBERT Z. LAWRENCE, MARGARETA DRZENIEK HANOUZ, AND SEAN DOHERTY, EDITORS
  2. 2. Insight ReportThe Global EnablingTrade Report 2012Reducing Supply Chain BarriersRobert Z. LawrenceMargareta Drzeniek HanouzSean DohertyEditors @ 2012 World Economic Forum
  3. 3. The Global Enabling Trade Report 2012 is published by World Economic Forumthe World Economic Forum within the framework of the GenevaGlobal Competitiveness Network and the Supply Chainand Transportation Industry Partnership. Copyright © 2012 by the World Economic ForumThe terms country and nation as used in this Report donot in all cases refer to a territorial entity that is a state Published by World Economic Forumas understood by international law and practice. The www.weforum.orgterms cover well-defined, geographically self-containedeconomic areas that may not be states but for which All rights reserved. No part of this publication may bestatistical data are maintained on a separate and reproduced, stored in a retrieval system, or transmitted,independent basis. in any form or by any means, electronic, mechanical, photocopying, or otherwise without the prior permission of the World Economic Forum. ISBN-10: 92-95044-29-0 ISBN-13: 978-92-95044-29-6 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. The full version of the Report with profiles of all 132 economies is available at www.weforum.org/getr. @ 2012 World Economic Forum
  4. 4. ContentsContributors v 1.5 Illicit Trade, Supply Chain Integrity, 57 and Technology by Justin Picard, Advanced Track & Trace;Partner Institutes vii and Carlos A. Alvarenga, AccenturePreface xiii 1.6 Business Perspectives on Obstacles 65by Børge Brende and Robert Greenhill, to Trade: Evidence from New Survey DataWorld Economic Forum by Julia Spies, International Trade CentreExecutive Summary xv 1.7 Expansion of Customs-Business 77by Sean Doherty, Margareta Drzeniek Hanouz, Partnerships in the 21st Centuryand Ronald Phillip, World Economic Forum by Kunio Mikuriya, World Customs Organization 1.8 The Merchant Fleet: A Facilitator of 85 World TradePart 1: Enabling Trade: Selected Issues 1 By Hans Oust Heiberg, DNB Bank ASA1.1 Reducing Supply Chain Barriers: 3The Enabling Trade Index 2012 1.9 Benefits of Trade Facilitation: 91 The Case of Costa Ricaby Robert Z. Lawrence, Harvard University; by Carlos Grau Tanner, Global Express Associationand Sean Doherty and Margareta Drzeniek Hanouz,World Economic Forum1.2 The Rise of Global Supply Chains: 35 Part 2: Country/Economy Profiles 95Implications for Global Trade How to Read the Country/Economy Profiles...................................97by the Global Agenda Council on Index of Countries/Economies.......................................................101the Global Trade System, World Economic Forum Country/Economy Profiles.............................................................1021.3 The Global Value Chain, the 41 Technical Notes and Sources 367Enterprise-Based Operating Model,and Challenges to the Sovereign-BasedEconomic Measurement System About the Authors 375by Gene Huang, FedEx Corporation Acknowledgments 3791.4 Logistics Investment and Trade 47Growth: The Need for Better Analyticsby Donald Ratliff and Amar Ramudhin,Georgia Institute of Technology The Global Enabling Trade Report 2012 | iii @ 2012 World Economic Forum
  5. 5. @ 2012 World Economic Forum
  6. 6. ContributorsProfessor Klaus Schwab, Executive Chairman, STRATEGIC ADVISORSWorld Economic Forum Jennifer Blanke, Senior Director, Lead Economist, GlobalBørge Brende, Managing Director, Government Relations Competitiveness Network, World Economic Forumand Constituents Engagement, World Economic Forum John Moavenzadeh, Senior Director, Head of Mobility Industries,Robert Greenhill, Chief Business Officer, World Economic Forum World Economic ForumLEAD ACADEMIC AND CO-EDITOR DATA PROVIDERSRobert Z. Lawrence, Albert L. Williams Professor of Trade The World Economic Forum is pleased to thank the followingand Investment, John F. Kennedy School of Government, experts who helped identify and provide data for the EnablingHarvard University Trade Index: Jean François Arvis, Senior Transport Economist, Trade LogisticsCO-EDITORS & Facilitation, International Trade Department, The World BankSean Doherty, Associate Director and Head of Supply Chain Jean-François Bourque, Senior Legal Advisor, Businessand Transportation Industry, World Economic Forum Environment Section, Division of Business and InstitutionalMargareta Drzeniek Hanouz, Director, Senior Economist, Support, International Trade CentreWorld Economic Forum Carlos Grau Tanner, Director General, Global Express Association Jan Hoffmann, Chief, Trade Facilitation Section, Trade LogisticsPROJECT MANAGER Branch, Division on Technology and Logistics, United NationsRonald Philip, Community Manager, Supply Chain and Conference on Trade and DevelopmentTransportation Industry, World Economic Forum Mondher Mimouni, Chief, Market Analysis and Research, International Trade CentrePROJECT TEAM AT THE WORLD ECONOMIC FORUM Monica Alina Mustra, Trade Facilitation and Logistics Specialist,Global Competitiveness Network GFP Coordinator, International Trade Department, The World BankBeñat Bilbao-Osorio, Associate Director, Economist Andrea Navares Juanco, Analyst, Economics Department,Ciara Browne, Associate Director International Air Transport AssociationRoberto Crotti, Junior Quantitative Economist Xavier Pichot, Market Analyst, Market Analysis and Research,Thierry Geiger, Associate Director and Economist International Trade CentreTania Gutknecht, Senior Community Associate Alexander Riveros, Trade Law Associate Expert, Business Environment Section, Division of Business and InstitutionalCaroline Ko, Junior Economist Support, International Trade CentreCecilia Serin, Team Coordinator Bismark Sitorus, Economic Affairs Officer, Trade FacilitationMobility Industries Section, Trade Logistics Branch, Division on Technology and Logistics, United Nations Conference on Trade and DevelopmentKaterina Soulounia, Senior Team Coordinator We thank Hope Steele for her superb editing work and Neil Weinberg for his excellent graphic design and layout.* The World Economic Forum is grateful for the support of the Industry Partners who served on the Advisory Board for this Report. The Global Enabling Trade Report 2012 | v @ 2012 World Economic Forum
  7. 7. @ 2012 World Economic Forum
  8. 8. Partner InstitutesThe World Economic Forum’s Global Competitiveness BangladeshNetwork is pleased to acknowledge and thank the Centre for Policy Dialogue (CPD) Mustafizur Rahman, Executive Directorfollowing organizations as its valued Partner Institutes, Khondaker Golam Moazzem, Senior Research Fellowwithout which the realization of The Global Enabling Kishore Kumer Basak, Research AssociateTrade Report 2012 would not have been feasible: BelgiumAlbania Vlerick Leuven Gent Management SchoolInstitute for Contemporary Studies (ISB) Priscilla Boairdi, Associate, Competence CentreArtan Hoxha, President Entrepreneurship, Governance and StrategyElira Jorgoni, Senior Expert and Project Manager Wim Moesen, ProfessorEndrit Kapaj, Researcher Leo Sleuwaegen, Professor, Competence Centre Entrepreneurship, Governance and StrategyAlgeriaCentre de Recherche en Economie Appliquée pour le Benin Développement (CREAD) CAPOD—Conception et Analyse de Politiques deYoucef Benabdallah, Assistant Professor DéveloppementYassine Ferfera, Director Epiphane Adjovi, Director Maria-Odile Attanasso, Deputy CoordinatorAngola Fructueux Deguenonvo, ResearcherMITC InvestimentosEstefania Jover, Senior Adviser Bosnia and HerzegovinaSouth Africa-Angola Chamber of Commerce (SA-ACC) MIT Center, School of Economics and Business in Sarajevo,Roger Ballard-Tremeer, Hon Chief Executive University of Sarajevo Zlatko Lagumdzija, ProfessorArgentina Zeljko Sain, Executive DirectorIAE—Universidad Austral Jasmina Selimovic, Assistant DirectorCristian Alonso, Project ManagerEduardo Luis Fracchia, Professor Botswana Botswana National Productivity CentreArmenia Letsogile Batsetswe, Research Consultant and StatisticianEconomy and Values Research Center Parmod Chandna, Acting Executive DirectorManuk Hergnyan, Chairman Phumzile Thobokwe, Manager, Information and ResearchSevak Hovhannisyan, Board Member and Senior Associate Services DepartmentGohar Malumyan, Research Associate BrazilAustralia Fundação Dom CabralAustralian Industry Group Marina Araújo, Economist and Researcher, TheCarola Lehmer, Senior Research Coordinator Competitiveness and Innovation CenterHeather Ridout, Chief Executive Carlos Arruda, Executive Director, International AdvisoryNikki Wilson, Administrative Assistant Council and Professor, The Competitiveness andAustria Innovation CenterAustrian Institute of Economic Research (WIFO) Fabiana Madsen, Economist and Researcher, TheKarl Aiginger, Director Competitiveness and Innovation CenterGerhard Schwarz, Coordinator, Survey Department Movimento Brasil Competitivo (MBC)Azerbaijan Erik Camarano, Director PresidentAzerbaijan Marketing Society Nikelma Moura, Communications AssistantFuad Aliyev, Project Manager Tatiana Ribeiro, Project CoordinatorAshraf Hajiyev, Consultant BulgariaBahrain Center for Economic DevelopmentBahrain Competitiveness Council, Bahrain Economic Anelia Damianova, Senior Expert Development Board Burkina FasoNada Azmi, Manager, Economic Planning and Development lnstitut Supérieure des Sciences de la Population (ISSP),Mohammed bin Essa Al-Khalifa, Chief Executive University of OuagadougouMaryam Matter, Coordinator, Economic Planning and Samuel Kabore, Economist and Head of Development Development Strategy and Population Research The Global Enabling Trade Report 2012 | vii @ 2012 World Economic Forum
  9. 9. Partner InstitutesBurundi CyprusUniversity Research Centre for Economic and Social Cyprus College Research Center Development (CURDES), National University of Burundi Bambos Papageorgiou, Head of Socioeconomic andBanderembako Deo, Director Academic ResearchGilbert Niyongabo, Dean, Faculty of Economics & cdbbank—The Cyprus Development Bank Management Maria Markidou-Georgiadou, Manager, International BusinessCambodia BankingEconomic Institute of Cambodia Czech RepublicSok Hach, President CMC Graduate School of BusinessSeiha Neou, Research Manager Tomas Janca, Executive DirectorSokheng Sam, Researcher DenmarkCameroon Innoption EMEA ApSComité de Compétitivité (Competitiveness Committee) Carsten Snedker, Managing PartnerLucien Sanzouango, Permanent Secretary EcuadorCanada ESPAE Graduate School of Management, Escuela SuperiorThe Conference Board of Canada Politécnica del Litoral (ESPOL)Michael R. Bloom, Vice-President, Organizational Elizabeth Arteaga, Project Assistant Effectiveness & Learning Virginia Lasio, DirectorAnne Golden, President and Chief Executive Officer Sara Wong, ProfessorP. Derek Hughes, Senior Research Associate EgyptChad The Egyptian Center for Economic StudiesGroupe de Recherches Alternatives et de Monitoring du Projet Iman Al-Ayouty, Senior Economist Pétrole-Tchad-Cameroun (GRAMP-TC) Omneia Helmy, Deputy Director of Research and LeadAntoine Doudjidingao, Researcher EconomistGilbert Maoundonodji, Director Magda Kandil, Executive Director and Director of ResearchCeline Nénodji Mbaipeur, Programme Officer EstoniaChile Estonian Institute of Economic ResearchUniversidad Adolfo Ibáñez Evelin Ahermaa, Head of Economic Research SectorFernando Larrain Aninat, Director of the Master in Marje Josing, Director Management and Public Policy, School of GovernmentCamila Chadwick, Project Coordinator Estonian Development FundLeonidas Montes, Dean, School of Government Kitty Kubo, Head of Foresight Ott Pärna, Chief Executive OfficerChinaInstitute of Economic System and Management EthiopiaNational Development and Reform Commission African Institute of Management, Development andZhou Haichun, Deputy Director and Professor GovernanceChen Wei, Research Fellow Tegegne Teka, General ManagerDong Ying, Professor FinlandChina Center for Economic Statistics Research, ETLA—The Research Institute of the Finnish Economy Tianjin University of Finance and Economics Petri Rouvinen, Research DirectorLu Dong, Professor Markku Kotilainen, Research DirectorHongye Xiao, Professor Pekka Ylä-Anttila, Managing DirectorBojuan Zhao, Professor FranceHuazhang Zheng, Associate Professor HEC School of Management, ParisColombia Bertrand Moingeon, Professor and Deputy DeanNational Planning Department Bernard Ramanantsoa, Professor and DeanAlvaro Edgar Balcazar, Entrepreneurial Development Director Gambia, TheHernando José Gómez, General Director Gambia Economic and Social Development Research InstituteNelson Fabián Villareal Rincón, Advisor (GESDRI)Colombian Council of Competitiveness Makaireh A. Njie, DirectorRosario Córdoba, President GeorgiaCôte d’Ivoire Business Initiative for Reforms in GeorgiaChambre de Commerce et d’Industrie de Côte d’Ivoire Tamara Janashia, Executive DirectorJean-Louis Billon, President Giga Makharadze, Founding Member of the Board of DirectorsJean-Louis Giacometti, Technical Advisor to the President Mamuka Tsereteli, Founding Member of the Board of DirectorsMamadou Sarr, Director General GermanyCroatia IW Consult GmbH, Cologne Institute for Economic ResearchNational Competitiveness Council Adriana Sonia Neligan, Head of DepartmentJadranka Gable, Project Administrator WHU—Otto Beisheim School of Management, VallendarKresimir Jurlin, Research Associate Ralf Fendel, Professor of Monetary EconomicsMira Lenardic, Senior Advisor Michael Frenkel, Professor, Chair of Macroeconomics and International Economicsviii | The Global Enabling Trade Report 2012 @ 2012 World Economic Forum
  10. 10. Partner InstitutesGhana IsraelAssociation of Ghana Industries (AGI) Manufacturers’ Association of Israel (MAI)Patricia Djorbuah, Projects Officer Shraga Brosh, PresidentCletus Kosiba, Executive Director Dan Catarivas, DirectorNana Owusu-Afari, President Amir Hayek, Managing DirectorGreece ItalySEV Hellenic Federation of Enterprises SDA Bocconi School of ManagementMichael Mitsopoulos, Coordinator, Research and Analysis Secchi Carlo, Full Professor of Economic Policy, BocconiThanasis Printsipas, Economist, Research and Analysis University Paola Dubini, Associate Professor, Bocconi UniversityGuatemala Francesco A. Saviozzi, SDA Assistant Professor,FUNDESA Strategic and Entrepreneurial Management DepartmentEdgar A. Heinemann, President of the Board of DirectorsPablo Schneider, Economic Director JamaicaJuan Carlos Zapata, General Manager Mona School of Business (MSB), The University of the West IndiesGuyana Patricia Douce, Project AdministratorInstitute of Development Studies, University of Guyana Evan Duggan, Executive Director and ProfessorKaren Pratt, Research Associate William Lawrence, Director, Professional Services UnitClive Thomas, Director JapanHaiti Keio University in cooperation with Keizai Doyukai KeizaiPrivate Sector Economic Forum (Japan Association of Corporate Executives)Edouard Baussan, Deputy Coordinator Yoko Ishikura, Professor,Graduate School of Media Design,Reginald Boulos, Coordinator Keio UniversityBernard Craan, Secretary General Kiyohiko Ito, Managing Director, Keizai DoyukaiHong Kong SAR Heizo Takenaka, Director, Global Security Research Institute,Hong Kong General Chamber of Commerce Keio UniversityDavid O’Rear, Chief Economist JordanFederation of Hong Kong Industries Ministry of Planning & International CooperationAlexandra Poon, Director Jordan National Competitiveness Team Mukhallad Omari, Director of Policies and Studies DepartmentThe Chinese General Chamber of Commerce Aktham Al-Zubi, Senior ResearcherHungary Kawther Al-Zou’bi, Head of Competitiveness DivisionKOPINT-TÁRKI Economic Research Ltd. KazakhstanPeter Vakhal, Project Manager JSC “National Analytical Centre of the Government of theÉva Palócz, Chief Executive Officer Republic of Kazakhstan”Iceland Takhir Aslyaliyev, Project ManagerInnovation Center Iceland Ayana Manasova, ChairpersonKarl Fridriksson, Managing Director of Human Resources and Alikhan Yerzhanov, Expert Analyst Marketing KenyaArdis Armannsdottir, Marketing Manager Institute for Development Studies, University of NairobiThorsteinn I. Sigfusson, Director Mohamud Jama, Director and Associate ProfessorIndia Paul Kamau, Senior Research FellowConfederation of Indian Industry (CII) Dorothy McCormick, Research ProfessorChandrajit Banerjee, Director General Korea, Republic ofMarut Sengupta, Deputy Director General College of Business School, Korea Advanced Institute ofGantakolla Srivastava, Head, Financial Services Science and Technology KAISTIndonesia Ingoo Han, Senior Associate Dean and ProfessorCenter for Industry, SME & Business Competition Studies, Byungtae Lee, Acting Dean University of Trisakti Professor Kayla Jisoo Lee, Manager, Exchange ProgrammeTulus Tambunan, Professor and Director Korea Development InstituteIran, Islamic Republic of Joohee Cho, Senior Research AssociateThe Centre for Economic Studies and Surveys (CESS), Iran Yongsoo Lee, Head, Policy Survey Unit Chamber of Commerce, Industries and Mines KuwaitHammed Roohani, Director Kuwait National Competitiveness CommitteeIreland Adel Al-Husainan, Committee MemberCompetitiveness Survey Group, Department of Economics, Fahed Al-Rashed, Committee Chairman University College Cork Sayer Al-Sayer, Committee MemberEleanor Doyle, Professor, Department of Economics Kyrgyz RepublicNiall O’Sullivan Economic Policy Institute “Bishkek Consensus”Bernadette Power Lola Abduhametova, Program CoordinatorNational Competitiveness Council Marat Tazabekov, ChairmanAdrian Devitt, Manager LatviaMichelle Nic Gearailt, Assistant Economist Institute of Economics, Latvian Academy of Sciences Helma Jirgena, Director Irina Curkina, Researcher The Global Enabling Trade Report 2012 | ix @ 2012 World Economic Forum
  11. 11. Partner InstitutesLebanon MexicoBader Young Entrepreneurs Program Center for Intellectual Capital and CompetitivenessAntoine Abou-Samra, Managing Director Erika Ruiz Manzur, Executive DirectorHiba Zunji, Assistant René Villarreal Arrambide, President and Chief Executive OfficerLesotho Jesús Zurita González, General DirectorPrivate Sector Foundation of LesothoO.S.M. Moosa, Chaiperson Instituto Mexicano para la Competitividad (IMCO)Tiisetso Sekhonyana, Researcher Priscila Garcia, ResearcherLindiwe Sephomolo, Chief Executive Officer Manuel Molano, Deputy General Director Juan E. Pardinas, General DirectorLithuania Ministry of the EconomyStatistics Lithuania . . Jose Antonio Torre, Undersecretary for Competitiveness andVilija Lapeniene, Director General StandardizationGediminas Samuolis, Head, Knowledge Economy and Special Enrique Perret Erhard, Technical Secretary for Surveys Statistics Division . CompetitivenessOna Grigiene, Deputy Head, Knowledge Economy and Narciso Suarez, Research Director, Secretary for Special Surveys Statistics Division CompetitivenessLuxembourg MoldovaChamber of Commerce of the Grand Duchy of Luxembourg Academy of Economic Studies of Moldova (AESM)François-Xavier Borsi, Attaché, Economic Department Grigore Belostecinic, RectorCarlo Thelen, Chief Economist, Member of the Managing Board Centre for Economic Research (CER)Christel Chatelain, Attachée, Economic Department Corneliu Gutu, DirectorMacedonia, FYR MongoliaNational Entrepreneurship and Competitiveness Council Open Society Forum (OSF) (NECC) Munkhsoyol Baatarjav, Manager of Economic PolicyDejan Janevski, Project Coordinator Erdenejargal Perenlei, Executive DirectorZoran Stavreski, President of the Managing Board MontenegroSaso Trajkoski, Executive Director Institute for Strategic Studies and Prognoses (ISSP)Madagascar Maja Drakic, Project ManagerCentre of Economic Studies, University of Antananarivo Petar Ivanovic, Chief Executive OfficerRavelomanana Mamy Raoul, Director Veselin Vukotic, PresidentRazato Rarijaona Simon, Executive Secretary MoroccoMalawi Université Hassan II, LASAAREMalawi Confederation of Chambers of Commerce and Fouzi Mourji, Professor of Economics Industry General Confederation of Moroccan Entreprise (CGEM)Hope Chavula, Public Private Dialogue Manager Mounir Ferram, Delegate DirectorChancellor L. Kaferapanjira, Chief Executive Officer MozambiqueMalaysia EconPolicy Research Group, Lda.Institute of Strategic and International Studies (ISIS) Peter Coughlin, DirectorMahani Zainal Abidin, Chief Executive Donaldo Miguel Soares, ResearcherSteven C.M. Wong, Senior Director, Economics Ema Marta Soares, AssistantMalaysia Productivity Corporation (MPC) NamibiaMohd Razali Hussain, Director General Institute for Public Policy Research (IPPR)Lee Saw Hoon, Senior Director Graham Hopwood, Executive DirectorMali NepalGroupe de Recherche en Economie Appliquée et Théorique Centre for Economic Development and Administration (CEDA) (GREAT) Ramesh Chandra Chitrakar, Professor and CountryMassa Coulibaly, Coordinator CoordinatorMauritania Bharat Pokharel, Project Director and Executive DirectorCentre d’Information Mauritanien pour le Développement Mahendra Raj Joshi, Member Economique et Technique (CIMDET/CCIAM) NetherlandsKhira Mint Cheikhnani, Director INSCOPE: Research for Innovation, Erasmus UniversityLô Abdoul, Consultant and Analyst RotterdamHabib Sy, Analyst Frans A. J. Van den Bosch, ProfessorMauritius Henk W. Volberda, Director and ProfessorJoint Economic Council of Mauritius New ZealandRaj Makoond, Director Business New ZealandBoard of Investment Phil O’Reilly, Chief ExecutiveKevin Bessondyal, Assistant Director, Planning and Policy The New Zealand InstituteDev Chamroo, Director, Planning and Policy Catherine Harland, Project LeaderRaju Jaddoo, Managing Director Rick Boven, Directorx | The Global Enabling Trade Report 2012 @ 2012 World Economic Forum
  12. 12. Partner InstitutesNigeria Russian FederationNigerian Economic Summit Group (NESG) Bauman Innovation & Eurasia Competitiveness InstituteFrank Nweke Jr., Director General Katerina Marandi, Programme ManagerChris Okpoko, Associate Director, Research Alexey Prazdnichnykh, Principal and Managing DirectorFoluso Phillips, Chairman Stockholm School of Economics, RussiaNorway Igor Dukeov, Area PrincipalBI Norwegian School of Management Carl F. Fey, Associate Dean of ResearchEskil Goldeng, Researcher RwandaTorger Reve, Professor Private Sector FederationOman Roger Munyampenda, Chief Executive OfficerThe International Research Foundation Vincent S. Safari, Director, Trade and Policy AdvocacySalem Ben Nasser Al-Ismaily, Chairman Saudi ArabiaPublic Authority for Investment Promotion and Export National Competitiveness Center (NCC) Development (PAIPED) Awwad Al-Awwad, PresidentMehdi Ali Juma, Expert for Economic Research Khaldon Mahasen, Vice PresidentPakistan SenegalCompetitiveness Support Fund Centre de Recherches Economiques Appliquées (CREA),Maryam Jawaid, Communication Specialist University of DakarImran Khan, Economist Diop Ibrahima Thione, DirectorShahab Khawaja, Chief Executive Officer SerbiaParaguay Foundation for the Advancement of Economics (FREN)Centro de Análisis y Difusión de Economia Paraguaya Mihail Arandarenko, Chairman of the Board of Directors (CADEP) Katarina Bojie, Project CoordinatorDionisio Borda, Research Member Bojan Ristic, ResearcherFernando Masi, Director SingaporeMaría Belén Servín, Research Member Economic Development BoardPeru Angeline Poh, Director PlanningCentro de Desarrollo Industrial (CDI), Sociedad Nacional Cheng Wai San, Head, Research & Statistics Unit de Industrias Slovak RepublicNéstor Asto, Project Director Business Alliance of Slovakia (PAS)Luis Tenorio, Executive Director Robert Kicina, Executive DirectorPhilippines SloveniaMakati Business Club (MBC) Institute for Economic ResearchMarc P. Opulencia, Deputy Director Sonja Uršic, Senior ResearcherMichael B. Mundo, Chief Economist Peter Stanovnik, ProfessorPeter Angelo V. Perfecto, Executive Director University of Ljubljana, Faculty of EconomicsIn cooperation with the Management Association of Mateja Drnovšek, Professor the Philippines (MAP) Aleš Vahcic, ProfessorArnold P. Salvador, Executive Director South AfricaPoland Business Leadership South AfricaEconomic Institute, National Bank of Poland Friede Dowie, DirectorJarosław T. Jakubik, Deputy Director Michael Spicer, Chief Executive OfficerPiotr Boguszewski, Advisor Business Unity South AfricaPortugal Coenraad Bezuidenhout, Executive Director for EconomicPROFORUM, Associação para o Desenvolvimento da Policy Engenharia Jerry Vilakazi, Chief Executive OfficerIlídio António de Ayala Serôdio, Vice President of the Board of Directors Spain IESE Business School, International Center forFórum de Administradores de Empresas (FAE) CompetitivenessPaulo Bandeira, General Director María Luisa Blázquez, Research AssociatePedro do Carmo Costa, Member of the Board of Directors Enrique de Diego, Research AssistantEsmeralda Dourado, President of the Board of Directors Antoni Subirà, ProfessorQatar Sri LankaQatari Businessmen Association (QBA) Institute of Policy StudiesIssa Abdul Salam Abu Issa, Secretary-General Ayodya Galappattige, Research OfficerSarah Abdallah, Deputy General Manager Saman Kelegama, Executive DirectorRomania Dilani Hirimuthugodage, Research OfficerGroup of Applied Economics (GEA) SwedenLiviu Voinea, Executive Director International University of Entrepreneurship and TechnologyIrina Zgreaban, Program Coordinator Niclas Adler, President The Global Enabling Trade Report 2012 | xi @ 2012 World Economic Forum
  13. 13. Partner InstitutesSwitzerland United Arab EmiratesUniversity of St. Gallen, Executive School of Management, Abu Dhabi Department of Economic Development Technology and Law (ES-HSG) H.E. Mohammed Omar Abdulla, UndersecretaryBeat Bechtold, Communications Manager Dubai Economic CouncilRubén Rodriguez Startz, Head of Project H.E. Hani Al Hamly, Secretary GeneralSyria Emirates Competitiveness CouncilPlanning and International Cooperation Commission (PICC) H.E. Abdulla Nasser Lootah, Secretary GeneralAmer Housni Loutfi, Head Institute for Social and Economic Research (ISER),Syrian Enterprise and Business Centre (SEBC) Zayed UniversityNoha Chuck, Chief Executive Officer Mouawiya Alawad, DirectorNational Competitiveness Observatory (NCO) United KingdomRami Zaatari, Team Leader LSE Enterprise Ltd, London School of Economics andTaiwan, China Political ScienceCouncil for Economic Planning and Development, Executive Adam Austerfield, Director of Projects Yuan Niccolo Durazzi, Project OfficerLiu, Y. Christina, Minister Robyn Klingler Vidra, ResearcherHung, J. B., Director, Economic Research Department UruguayShieh, Chung Chung, Researcher, Economic Research Universidad ORT Department Isidoro Hodara, ProfessorTajikistan VenezuelaThe Center for Sociological Research “Zerkalo” CONAPRI—Venezuelan Council for Investment PromotionQahramon Baqoev, Director Eduardo Porcarelli, Executive DirectorGulnora Beknazarova, Researcher Litsay Guerrero, Economic Affairs and Investor Services ManagerAlikul Isoev, Sociologist and Economist VietnamTanzania Central Institute for Economic Management (CIEM)Research on Poverty Alleviation (REPOA) Dinh Van An, PresidentJoseph Semboja, Professor and Executive Director Phan Thanh Ha, Deputy Director, Department ofLucas Katera, Director, Commissioned Research Macroeconomic ManagementCornel Jahari, Researcher, Commissioned Research Pham Hoang Ha, Senior Researcher, Department of Department Macroeconomic ManagementThailand Institute for Development Studies in HCMC (HIDS)Sasin Graduate Institute of Business Administration, Nguyen Trong Hoa, Professor and President Chulalongkorn University Du Phuoc Tan, Head of DepartmentPongsak Hoontrakul, Senior Research Fellow Trieu Thanh Son, ResearcherToemsakdi Krishnamra, Director of SasinPiyachart Phiromswad, Faculty of Economics Yemen Yemeni Businessmen Club YBCThailand Development Research Institute (TDRI) Ahmed Abu Bakr Bazara, ChairmanSomchai Jitsuchon, Research Director Ali Saeed Mahmoud Al-Azaki, Executive DirectorChalongphob Sussangkarn, Distinguished Fellow Margret Arning, ConsultantYos Vajragupta, Senior Researcher ZambiaTunisia Institute of Economic and Social Research (INESOR),Institut Arabe des Chefs d’Entreprises University of ZambiaMajdi Hassen, Executive Counsellor Patricia Funjika, Research FellowChekib Nouira, President Jolly Kamwanga, Senior Research Fellow and ProjectTurkey CoordinatorTUSIAD Sabanci University Competitiveness Forum Mubiana Macwan’gi, Director and ProfessorIzak Atiyas, Director ZimbabweSelcuk Karaata, Vice Director Graduate School of Management, University of ZimbabweUganda A. M. Hawkins, ProfessorKabano Research and Development Centre Bolivia, Costa Rica, Dominican Republic, Ecuador,Robert Apunyo, Program Manager El Salvador, Honduras, Nicaragua, PanamaDelius Asiimwe, Executive Director INCAE Business School, Latin American Center forCatherine Ssekimpi, Research Associate Competitiveness and Sustainable Development (CLACDS)Ukraine Arturo Condo, RectorCASE Ukraine, Center for Social and Economic Research Lawrence Pratt, Director, CLACDSDmytro Boyarchuk, Executive Director Marlene de Estrella, Director of External RelationsVladimir Dubrovskiy, Leading Economist Víctor Umaña, Researcher and Project Manager, CLACDS Latvia, Lithuania Stockholm School of Economics in Riga Karlis Kreslins, Executive MBA Programme Director Anders Paalzow, Rectorxii | The Global Enabling Trade Report 2012 @ 2012 World Economic Forum
  14. 14. PrefaceBØRGE BRENDEManaging Director, Government Relations and Constituents Engagement, World Economic ForumROBERT GREENHILLChief Business Officer, World Economic ForumThe Global Enabling Trade Report 2012 reflects a world all 132 economies covered this year. The profiles providein which trade has rebounded from its 2009 slump. It is a an overview of the results on all indicators included in theworld where trade is no longer dominated by developed Enabling Trade Index.economies but is now more concentrated in and among The Global Enabling Trade Report would not haveemerging economies. This shift highlights the virtuous been possible without the distinguished academicsrole trade can play in economic growth and poverty and practitioners who have shared with us theirreduction. With progress stalled in multilateral trade knowledge and experience. We thank our Datanegotiations, the Report’s practical focus on tackling Partners—the Global Express Association (GEA),barriers is increasingly important. the International Air Transport Association (IATA), the Many of this year’s contributions reflect a growing International Trade Centre (ITC), the United Nationsrecognition that trade facilitation is most effective Conference on Trade and Development (UNCTAD), Thewhen it is designed to support global value chains. World Bank, the World Customs Organization (WCO),Countries, like companies, increasingly specialize in and the World Trade Organization (WTO)—for makingtasks rather than products, adding value to intermediate trade-related data available.products that cross many borders. Consequently, when We also wish to thank the authors of the chaptercountries enable trade, the benefits are not just local or contributions for their cutting-edge insight: the membersbilateral but global. But global disaggregation of value of the Global Agenda Council on the Global Tradingchains through trade has brought challenges as well System, Gene Huang of FedEx Corporation, Donaldas opportunities. Cognizant of the need to safeguard Ratliff and Amar Ramudhin of the Georgia Instituteadvances made, the Report considers the issue of of Technology, Justin Picard of Advanced Track &supply chain integrity and the steps both countries and Trace, Carlos A. Alvarenga of Accenture, Julia Spiescompanies can take to ensure that quality, security, of the International Trade Centre, Kunio Mikuriya of theand trade are mutually reinforcing rather than opposing. World Customs Organization, Hans Oust Heiberg ofSeveral contributions also touch on the need to DNB Bank ASA, and Carlos Grau Tanner of the Globaltransform our perspectives on trade by updating the way Express Association. We are grateful to the Industrywe measure it. Because trade and investment go hand Partners supporting this Report: Agility, Brightstar Corp.,in hand, the Report has, since its inception, dealt with Deutsche Post DHL, DNB Bank ASA, FedEx Corp., APenabling factors beyond national borders. Möller-Maersk, the Panama Canal Authority, Stena AB, Fundamentally, the Report’s assessment of factors Swiss International Airlines, Transnet, UPS, Volkswagen,that enable trade provides a reminder of the attributes and AB Volvo.that govern a nation’s ability to benefit from trade. These We wish to acknowledge the contributors to thisattributes are captured in the Enabling Trade Index, volume, Robert Z. Lawrence of Harvard University andwhich stands at the core of the Report and includes four Sean Doherty and Margareta Drzeniek Hanouz, as wellbroad categories: market access, border administration, as Roberto Crotti, Caroline Ko, and Ronald Philip, of theinfrastructure, and the business environment. World Economic Forum for their commitment. We would The Global Enabling Trade Report arises from and like to express our gratitude to Jennifer Blanke and Johnis supported by the World Economic Forum’s Supply Moavenzadeh for their guidance. Appreciation goes alsoChain and Transportation Industry Partnership program. to other team members of the Global CompetitivenessSince its introduction in 2008, the Report has become Network and the Supply Chain and Transportationa widely used reference, forming part of the toolbox Industry teams: Beñat Bilbao Osorio, Ciara Browne,of many countries in their efforts to increase trade and Thierry Geiger, Tania Gutknecht, Cecilia Serin, andhelping companies with their investment decisions. The Katerina Soulounia.Report is the basis for high-level public-private dialogues, Finally, this Report would have not been possiblefacilitated by the World Economic Forum around the without the hard work and enthusiasm of our networkworld, that focus on practical steps that can be taken by of over 150 Partner Institutes worldwide, who carry outboth governments and the private sector to overcome the Executive Opinion Survey, which is at the basis oftrade barriers in a particular country or region. this work. The complete Report can be downloaded atwww.weforum.org/getr. It contains detailed profiles for The Global Enabling Trade Report 2012 | xiii @ 2012 World Economic Forum
  15. 15. @ 2012 World Economic Forum
  16. 16. Executive SummarySEAN DOHERTYMARGARETA DRZENIEK HANOUZRONALD PHILIPWorld Economic ForumThe international trade agenda has seen many shifts over areas that are captured in subindexes A, B, C, and D andthe last several years. After the 2008 slump in global nine pillars that are attributed to the subindexes as follows:trade, international trade rebounded with and among A. The market access subindex measures the extentemerging markets faster than in other economies, to which the policy framework of the countryconfirming the move in economic activity away from the welcomes foreign goods into the country anddeveloped world. At the same time, events such as the enables access to foreign markets for its exporters.Japanese tsunami in 2011 highlighted the continued It includes the following pillar:international fragmentation of supply chains. Increasingly,goods are produced across a number of countries Pillar 1: Domestic and foreign market accesswithin the same company or groups of companies, B. The border administration subindex assesses theand countries specialize in tasks rather than products. extent to which the administration at the borderWith the Doha Development Agenda at an impasse, facilitates the entry and exit of goods through thethese developments raise the importance of practical following pillars:measures that countries can take to enable trade and Pillar 2: Efficiency of customs administrationbetter participate in the global division of labor, with the Pillar 3: Efficiency of import-export proceduresultimate aim of supporting economic growth. Pillar 4: Transparency of border administration Since its introduction in 2008, The Enabling TradeReport has become a widely used reference, forming C. The transport and communications infrastructurepart of the toolbox of many countries in their efforts subindex takes into account whether the countryto increase trade and helping companies with their has in place the transport and communicationsinvestment decisions. The Report is the basis for many infrastructure necessary to facilitate the movementhigh-level public-private dialogues facilitated around the of goods within the country and across the borderworld each year by the World Economic Forum. These through the following pillars:dialogues focus on practical steps that can be taken by Pillar 5: Availability and quality of transportboth governments and the private sector to overcome infrastructureparticular trade barriers in a country or region. Pillar 6: Availability and quality of transport services The Enabling Trade Index (ETI) was developed Pillar 7: Availability and use of ICTswithin the context of the World Economic Forum’sSupply Chain and Transportation Industry Partnership D. The business environment subindex looks at theprogram and was first published in The Global Enabling quality of governance as well as at the overarchingTrade Report 2008. A number of Data Partners regulatory and security environment impacting theare collaborating in this effort: the Global Express business of importers and exporters active in theAssociation (GEA), the International Air Transport country through the following pillars:Association (IATA), the International Trade Centre Pillar 8: Regulatory environment(ITC), the United Nations Conference on Trade and Pillar 9: Physical securityDevelopment (UNCTAD), the World Bank, the WorldCustoms Organization (WCO), and the World Trade Each of these pillars is made up of a number ofOrganization (WTO). We have also received significant individual variables. The dataset includes both hardinput from companies that are part of the Supply data and survey data from the World Economic Forum’sChain and Transportation Industry Partnership, namely Executive Opinion Survey (the Survey). The hard dataA.P. Möller Maersk, Agility, Brightstar, Deutsche Post were obtained from publicly available sources andDHL, DNB Nor, FedEx, the Panama Canal Authority, international organizations active in the area of tradeStena, Swiss International Air Lines, Transnet, UPS, (for example, IATA, the ITC, ITU, UNCTAD, the UN, andVolkswagen, and AB Volvo. the World Bank). The Survey is carried out annually by The ETI measures the extent to which individual the World Economic Forum in all economies coveredeconomies have developed institutions, policies, and by our research. It captures the views of top businessservices facilitating the free flow of goods over borders and executives on the business environment and providesto destination. The structure of the Index reflects the main unique data on many qualitative aspects of the broaderenablers of trade, breaking them into four overall issue The Global Enabling Trade Report 2012 | xv @ 2012 World Economic Forum
  17. 17. Executive Summarybusiness environment, including a number of specific spreading across the entire ETI sample. As highlightedissues related to trade. in past editions of the Report, the region’s outstanding domestic and foreign market access continuous toTHE ENABLING TRADE INDEX 2012 RANKINGS be the main strength of many countries. However, theThe rankings from the ETI are shown in Table 1, which overall business environment remains as an area forcompares the 2012 rankings with those from the 2010 improvement, particularly in terms of corruption andedition. the lack of physical security, which impose high costs As in previous years, the top 10 of the ETI 2012 on exporting and importing enterprises. As in previouscontinues to be dominated by relatively small, open years, Chile is an exception in the region, leading theeconomies for which trade is key to achieving efficiency regional rankings at 14th place. Costa Rica, anotherbecause their domestic markets are small. Singapore small, open economy, comes in at a good 43rd position.continues to lead the way by a large, and widening, The larger economies from the region perform less well,margin over second-ranked Hong Kong SAR. Both with Mexico occupying 65th place and Brazil 84th.economies deliver a strong performance across all The Middle East and North African region maintainsthe components of the Index with open trade policies, a high degree of diversity in terms of enabling trade,excellent infrastructure, well-functioning border with the United Arab Emirates entering the top 20 whileadministration, and a business environment that is Algeria remains at the bottom of the rankings, at 120th.conducive to trade and investment. As in the previous In many Gulf countries, such as Saudi Arabia at 27th,edition, two Nordic economies—Denmark and Sweden— the environment is favorable to trade because tradeoccupy the 3rd and 4th position, respectively, based policies are open, border administration is efficient,on their strong business environments, efficient border and infrastructure is well developed. North Africanadministrations, and highly developed infrastructures. economies, led by Tunisia at 44th, face a differentFurther down in the top 10 we observe some movement set of challenges, with trade policies and businessas New Zealand continues its upward trend, gaining environments that are less conducive to trade and aone position to reach 5th place, while Finland and the need to upgrade infrastructure.Netherlands improve to occupy the 6th and 7th position, Sub-Saharan African countries enable trade torespectively. Switzerland, Canada, and Luxembourg different degrees, and the trade liberalization efforts ofround up the top 10 rankings in this year’s ETI. recent decades have not been sufficient to significantly Asia and the Pacific is host to some of the fastest- improve the trade performance of the region as a whole.growing and largest economies worldwide. Many of the Many African countries have liberalized trade and nowcountries in the region have greatly benefited from trade enjoy important preferences in target markets, butand made it a central part of their growth strategy. The major improvements in trade facilitation have not yetETI shows a wide gap between frontrunners Singapore, been achieved. As a result, it is still considerably moreHong Kong, and New Zealand and the rest of the expensive to trade with Africa than with other regions,region. Many agree that Asia has yet to fully leverage the and, in many cases, the cost of trading is a moreopportunities offered by trade; this situation is reflected important obstacle to trade development than tradein the results of the ETI. Except for those in the top 10 policies. The exception to the rule is Mauritius, at 36thand Australia (17th), countries stay outside the top 20, place, which benefits from one of the most open tradewith China at 56th position and India at a low 100th. policies globally. South Africa occupies the 63rd position,The key challenge for both these countries is to liberalize which reflects its well-developed infrastructure andrestrictive trade policies. Thailand (57th), Indonesia efficient logistics services.(58th), and the Philippines have benefitted from trade This year the Report introduces for each country aliberalization within the Association of Southeast Asian set of direct measurements of the factors seen as theNations (ASEAN) and improved in the rankings this year. most problematic for exporting and importing, based on A number countries within the European Union (EU) a survey of business executives. These results, which arerank within the top 20 of the ETI rankings, reflecting reported in the Country/Economy Profiles in Part 2 of thistheir well-developed infrastructures, widely available Report, show that, globally, tariff and non-tariff barriers,transport services, and efficient border administrations. along with burdensome customs administration, remainHowever, their trade performance is constrained by the the most important obstacles for importing. Exporting isoverly restrictive common trade policy of the European hindered primarily by the difficulty of identifying marketsUnion. The United States ranks 23rd this year, continuing and buyers and by insufficient access to trade finance.its downward trend—the result of a deterioratinginfrastructure and a less conducive regulatory EXPLORING ISSUES OF ENABLING TRADEenvironment. The Russian Federation, at 112th place, In addition to the Index rankings and the relatedranks below other large emerging markets such as analysis, the Report contains a number of chapterBrazil, India, and China. The country would benefit from contributions that focus on issues relevant to thea freer trade policy, more efficient border administration, current trading environment. The chapters range fromand a less burdensome regulatory environment. discussions of how the globalization of value chains The average performance of the countries in Latin impacts measurement of trade and overall trade policiesAmerica and the Caribbean places most of them in the to considerations of logistics investments, customsmiddle of the ETI rankings, with individual countriesxvi | The Global Enabling Trade Report 2012 @ 2012 World Economic Forum
  18. 18. Executive SummaryTable 1: The Enabling Trade Index 2012 rankings and 2010 comparison ETI 2012 ETI 2010 ETI 2012 ETI 2010 Country/Economy Rank Score Rank* Country/Economy Rank Score Rank* Singapore 1 6.14 1 Greece 67 4.07 55 Hong Kong SAR 2 5.67 2 Vietnam 68 4.02 71 Denmark 3 5.41 3 Romania 69 4.02 54 Sweden 4 5.39 4 El Salvador 70 3.99 57 New Zealand 5 5.34 6 Serbia 71 3.97 67 Finland 6 5.34 12 Philippines 72 3.96 92 Netherlands 7 5.32 10 Sri Lanka 73 3.95 99 Switzerland 8 5.29 5 Bulgaria 74 3.93 78 Canada 9 5.22 8 Namibia 75 3.92 70 Luxembourg 10 5.20 9 Moldova 76 3.92 n/a United Kingdom 11 5.18 17 Guatemala 77 3.90 69 Norway 12 5.17 7 Honduras 78 3.89 66 Germany 13 5.13 13 Jamaica 79 3.89 74 Chile 14 5.12 18 Bosnia and Herzegovina 80 3.87 80 Austria 15 5.12 14 Azerbaijan 81 3.85 77 Iceland 16 5.08 11 Nicaragua 82 3.83 79 Australia 17 5.08 15 Ecuador 83 3.83 89 Japan 18 5.08 25 Brazil 84 3.79 87 United Arab Emirates 19 5.07 16 Malawi 85 3.79 83 France 20 5.03 20 Ukraine 86 3.79 81 Belgium 21 4.96 24 Dominican Republic 87 3.78 73 Ireland 22 4.96 21 Zambia 88 3.78 85 United States 23 4.90 19 Colombia 89 3.78 91 Malaysia 24 4.90 30 Egypt 90 3.78 76 Oman 25 4.86 29 Gambia, The 91 3.74 82 Estonia 26 4.85 23 Senegal 92 3.72 90 Saudi Arabia 27 4.84 40 Lebanon 93 3.71 n/a Israel 28 4.82 26 Tanzania 94 3.69 97 Taiwan, China 29 4.81 28 Bolivia 95 3.68 98 Bahrain 30 4.80 22 Argentina 96 3.68 95 Spain 31 4.79 32 Mozambique 97 3.65 93 Qatar 32 4.74 34 Uganda 98 3.64 94 Slovenia 33 4.65 35 Ghana 99 3.59 96 Korea, Rep. 34 4.65 27 India 100 3.55 84 Portugal 35 4.63 36 Paraguay 101 3.53 103 Mauritius 36 4.62 33 Cambodia 102 3.52 102 Cyprus 37 4.61 31 Kenya 103 3.52 105 Georgia 38 4.58 37 Guyana 104 3.52 109 Montenegro 39 4.46 43 Kazakhstan 105 3.50 88 Uruguay 40 4.44 50 Ethiopia 106 3.49 107 Czech Republic 41 4.42 42 Madagascar 107 3.48 86 Jordan 42 4.42 39 Syria 108 3.47 104 Costa Rica 43 4.41 44 Bangladesh 109 3.46 113 Tunisia 44 4.39 38 Tajikistan 110 3.45 108 Lithuania 45 4.39 41 Kyrgyz Republic 111 3.45 100 Croatia 46 4.39 45 Russian Federation 112 3.41 114 Hungary 47 4.39 49 Lesotho 113 3.41 101 Poland 48 4.37 58 Mongolia 114 3.40 116 Albania 49 4.36 59 Benin 115 3.39 106 Italy 50 4.36 51 Pakistan 116 3.39 112 Rwanda 51 4.35 n/a Iran, Islamic Rep. 117 3.31 n/a Latvia 52 4.31 46 Cameroon 118 3.28 115 Peru 53 4.31 63 Yemen 119 3.25 n/a Botswana 54 4.31 53 Algeria 120 3.22 119 Slovak Republic 55 4.29 47 Mali 121 3.18 111 China 56 4.22 48 Burkina Faso 122 3.15 110 Thailand 57 4.21 60 Nigeria 123 3.13 120 Indonesia 58 4.19 68 Nepal 124 3.07 118 Armenia 59 4.19 52 Mauritania 125 3.06 117 Panama 60 4.16 61 Côte d’Ivoire 126 3.02 123 Macedonia, FYR 61 4.13 56 Angola 127 3.01 n/a Turkey 62 4.13 62 Haiti 128 2.97 n/a South Africa 63 4.10 72 Zimbabwe 129 2.96 122 Morocco 64 4.08 75 Venezuela 130 2.95 121 Mexico 65 4.08 64 Burundi 131 2.95 125 Kuwait 66 4.07 65 Chad 132 2.63 124*The 2010 rank is out of 125 countries. Seven new countries were added to the 2012 Index: Angola, Haiti, Iran, Lebanon, Moldova, Rwanda, and Yemen. The Global Enabling Trade Report 2012 | xvii @ 2012 World Economic Forum
  19. 19. Executive Summaryadministration, the state of the merchant fleet, and a for the measurement of value-added in trade statisticscountry case study of Costa Rica. along with more direct measurement of cross-border Chapter 1.2, “The Rise of Global Supply Chains: linkages, knowledge infusion, and intangibles trade toImplications for Global Trade,” summarizes recent work better illustrate where nations have real advantages andby the Global Agenda Council (GAC) on the Global challenges.Trade System, a group of experts formed by the World In Chapter 1.4, “Logistics Investment and TradeEconomic Forum. The GAC analyzes the consequences Growth: The Need for Better Analytics,” Donald Ratliffof the rise of global value chains that will require new and Amar Ramudhin from the Supply Chain andapproaches, such as adjustments to ways that trade Logistics Institute at the Georgia Institute of Technologyflows are measured and changes in global trade rules make the case for a new generation of trade data.and in the economic and trade policies of developing Traditional data collections were designed to supportcountries. The authors note that governments clearly customs functions and are no longer appropriate in aneed to recognize that exports are only part of the world of global supply chains. Trade-supporting logisticsdevelopment story. It is important for policymakers investment decisions are made by public entities, byto develop better measures of trade flows net of private enterprises for public use in the sense that theseintermediate imports, and more generally to develop a decisions support services offered on the market, andbetter appreciation of how the national economy fits into for specific enterprises. In all cases, decision makingglobal production chains. According to GAC members, could be dramatically improved through the availability ofa failure to do so could lead to inaccurate policy better data. Excellent data exist in proprietary systems:conclusions about the importance of bilateral trade geographic information systems, origin and destinationimbalances, to significant underestimates of the cost of databases for goods, logistical properties, serviceprotection, and to a failure to appreciate the importance schedules, and so forth. Given the billions of dollarsof bilateral or regional trading relationships. Furthermore, of public and private investment and return at stake,the existence of large and growing trade in intermediates, an effort to develop new systems for data exchangewhich is associated with foreign direct investment (FDI) and analysis would be worthwhile. The authors reviewand the globalization of production, greatly raises the trends in trade flows revealed by currently availablestakes for countries to have open and predictable trade data and their influence on investment decisions. Theirand investment regimes, including efficient logistics. The work highlights in particular the growth of intra-Asiaauthors conclude that the rise of value chains will require and Asia-Europe trade and the implications of thatthe WTO to focus more strongly on pursuing plurilateral growth for investment. However, they caution againstnegotiations. At the same time, preferential trading relying too heavily on trend data by illustrating the effectagreements will need to adjust negotiation approaches of the 2009 downturn on trade, and conclude thattoward a reduction in transaction costs, rather than modeling scenarios with better data would improve riskerecting new barriers to trade. management in investment for trade. In Chapter 1.3, “The Global Value Chain, the In Chapter 1.5, “Illicit Trade, Supply Chain Integrity,Enterprise-Based Operating Model, and Challenges to and Technology,” Justin Picard of Advanced Trackthe Sovereign-Based Economic Measurement System,” & Trace and Carlos A. Alvarenga of Accenture pointGene Huang of FedEx Corporation argues that there out that one of the principal concerns of supply chainis a mismatch between sovereign-based economic managers is, increasingly, supply chain integrity. Foractivity measurement systems and globalized operating decades the complexity and opacity of global supplymodels. A new method of measurement is needed to chains meant that undesirable activities could oftenfacilitate access to opportunity, to highlight areas of be hidden or ignored. A convergence of security,risk, and to avoid unintended policy consequences. The consumer activism, and corporate interests, togetherauthor notes that we tend to underestimate the level of with new technologies, is leading to greater traceabilityglobal integration, highlighting the fact that 60 percent and transparency. Retailers, logistics companies,of global trade is in intermediate goods and intra-firm and suppliers are all held increasingly accountabletrade makes up 30 percent of world trade. Distribution for unethical practices and illegal goods in the supplysystems are built around global value flows directed chain. Incentives to infiltrate and defend supply chainsat the customer, so national income accounting can are ever-present. Increasingly commoditized productionbe only imprecise. However, accounting must follow means that high margins are captured throughinnovation. We currently face various difficulties: trade innovation, brand, and ethical business practices.credits are created where profits are registered, which is Security concerns increasingly focus on securing theoften different than where the trade is taking place; the entire chain, as evidenced by the US National Strategyimpact of time is under-measured; non-equity models for Global Supply Chain Security, which aims to enhanceof foreign investment through contract manufacturing, “the integrity of goods as they move through the globaloutsourcing, and licensing are not recorded in FDI supply chain.” Beyond regulatory compliance, theinvestments; massive transfers of intangible assets and private sector has an interest in demonstrating oversightknowledge are occurring without appropriate records; of supply chains to prevent overreaction by securityand measures of gross goods flow distort the picture agencies to cases of illicit trade. Product tracking andof bilateral relationships. To conclude, the author calls authentication technologies need to progress fasterxviii | The Global Enabling Trade Report 2012 @ 2012 World Economic Forum

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