Trade Facilitation in the Greater Mekong Subregion: Impacts of Reducing the Time to Trade, Journal of GMS Development Studies, Vol. 4, pp. 1-20

Abstract

The importance of trade facilitation and reducing the time to trade is gaining increasing recognition. Significant efforts are being made in the Greater Mekong Subregion (GMS) to promote improvements in this area of economic integration. This paper uses newly available databases to explore potential gains to the GMS (including the People’s Republic of China [PRC]) from reducing the time taken to export and import. The results suggest that even a moderate reduction in the time taken to trade intraregionally is likely to bring strong economic benefits to the subregion. Reducing the time to trade within the subregion by 25% is expected to increase real gross domestic product by 1%–2% for Cambodia, Lao People’s Democratic Republic (Lao PDR), Myanmar, and Viet Nam. For the larger economies of the PRC and Thailand, the percentage gains are relatively small but translate into significant dollar increases: $350 million for Thailand and $734 million for the PRC. The gains to Viet Nam and Thailand are particularly reliant on improved trade facilitation with the PRC, but this is not the case for Cambodia, Lao PDR, and Myanmar. There is evidence that such trade facilitation efforts may improve export diversification, particularly for the relatively poor economies. Real exports within the subregion are also expected to increase for all countries, again with particularly high dollar value increases for the PRC and Thailand.