Changes in Cross-Border Trade Costs in the Pan-Arab Free Trade Area, 2001–2008
The Pan-Arab Free Trade Area, negotiated under auspices of the Arab League, came into force in 1997. Under the agreement all tariffs on goods of Arab origin were to be removed by January 1, 2005. This paper summarizes the results of a firm-level survey in nine countries regarding the implementation of the Pan-Arab Free Trade Area. A majority of respondent companies report that tariffs on intra-regional trade have largely been removed, and that there has been a marked improvement in customs clearance-related procedures. Costs associated with administrative red tape and weaknesses in transport-related infrastructure services are ranked as the most important constraints to intra-regional trade. This suggests that from a policy perspective, efforts to reduce real trade costs deserve priority, including transportation and logistics services. Periodic monitoring and assessment of trade incentives and performance would help governments to benchmark performance and identify priority areas for action, at both the national and the sub-regional levels.
Summary: | The Pan-Arab Free Trade Area, negotiated
under auspices of the Arab League, came into force in 1997.
Under the agreement all tariffs on goods of Arab origin were
to be removed by January 1, 2005. This paper summarizes the
results of a firm-level survey in nine countries regarding
the implementation of the Pan-Arab Free Trade Area. A
majority of respondent companies report that tariffs on
intra-regional trade have largely been removed, and that
there has been a marked improvement in customs
clearance-related procedures. Costs associated with
administrative red tape and weaknesses in transport-related
infrastructure services are ranked as the most important
constraints to intra-regional trade. This suggests that from
a policy perspective, efforts to reduce real trade costs
deserve priority, including transportation and logistics
services. Periodic monitoring and assessment of trade
incentives and performance would help governments to
benchmark performance and identify priority areas for
action, at both the national and the sub-regional levels. |
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