Research On The Impact Of Trade Facilitation On Global Agricultural Trade

International trade is increasingly important for global food security.The World Trade Organization(WTO)believes that one sixth of the world’s population(about 17 percent)depends on international trade for food,and this will increase to 50 percent by 2050 due to climate change and population growth.Since the outbreak of COVID-19,international health security emergencies have quickly turned into food shortage crises.Maintaining the flow of international trade in agricultural products is crucial in addressing food security issues at the global level.However,despite declining transportation costs,improved informational and communication technologies,and lower trade barriers in many countries around the world,trade costs are still high and a major trade hindering burden.Trade facilitation is regarded as the policy tool with the most potential to further reduce trade costs,and has received much attention from both academia and international organizations.This study introduces the main contents of the WTO Trade Facilitation Agreement and OECD trade facilitation indicators.This article established three different sets of panel data focusing on: the volume of trade,trade cost and trade resilience respectively.Across these three dimensions,trade facilitation has important economic significance,particularly in the field of agricultural products.We identify the most important trade facilitation measures based on the level of economic development for trading partners,providing governments with more targeted policy choices.Main conclusions are as follows:First,between 2017 and 2019,global trade facilitation improved by 9%.By region,the highest ranking countries are mainly concentrated in North America and Europe.Emerging market countries such as China,Russia,India and Brazil have made rapid progress,but still lag behind developed countries.African and other Latin American countries have made slow progress,and some landlocked countries have regressed.Based on the level of economic development,middle and high-income countries have achieved the largest improvements,which is the main driving force for the rise of the average level of global trade facilitation.Second,using a fully balanced panel dataset covering 151 countries and 96 product categories from 2017 to 2019,and applying a Poisson Pseudo maximum likelihood estimation model(PPML)with high-dimensional fixed effects,we estimate the effects that trade facilitation has on international trade volumes.The study finds that in the field of agricultural products,imports(exports)increased by1.488%(1.808%)for every 1% increase in the level of trade facilitation of the importing country(exporting country).The conclusion that the improvement of trade facilitation levels is beneficial to the growth of trade volumes is consistent across all goods and the agricultural goods sector.However,compared with non-agricultural goods,the effects improving trade facilitation levels of the importing country is higher(1.488%/1.323%)while the effects of improving trade facilitation levels of exporting countries is lower(1.808%/2.278%).The impact of different trade facilitation measures on agricultural trade is varies.Middle and upper income countries and those with lower levels of economic development should make solid improvements in documentation and procedural procedures,with additional emphasis on the level of information availability and optimization of appeal procedures.If countries with trade facilitation levels below the world average are enhanced to the world’s average level,trade in agricultural products will increase by $61.796 billion,or about 3.5% of the total global trade in agricultural products in 2019.Third,from 1995 to 2019,global trade costs first increased,then remained flat and lastly declined.Although the decline of agricultural trade costs is not slower than that of non-agricultural products,its high levels imply a lot of room for decline.We find that in the field of agricultural products,the average trade cost of a country with all its trading countries decreases by 0.492% when the level of trade facilitation increases by 1%.The conclusion that the improvement of trade facilitation is beneficial to the reduction of trade costs is consistent all goods and the agricultural goods sector,but the effect of reducing trade costs in agricultural products is lower than that in non-agricultural products.In order to reduce trade costs,priority should be given to the development of documentation procedures(0.342%),appeal procedures(0.243%)and pre-adjudication(0.132%)in the agricultural sector.In addition,trade facilitation promotes trade growth by reducing trade costs,but only partially.Fourth,taking wheat,maize and rice as an example,this paper establishes a set of panel data for 2years,39 products and 6816 observations based on whether all bilateral trade relations existing in 39 products at the HS-6 quantile level of a country in 2019 have been maintained in 2020 and 2021 to represent trade resilience.We find that although descriptive statistics show that the trade resilience of developed countries is higher and the trade relationship is more fragile in developing countries,in a regression,a country’s GDP is negatively correlated with its import trade resilience,while the level of trade facilitation is significantly positively correlated with its import trade resilience.On average,a 1%increase in trade facilitation will increase trade resilience by 0.318%.This shows that countries at any level of economic development can enhance trade resilience by improving trade facilitation.For resilience,the most important measures differ from those for the volume of trade and trade costs.Procedural formalities and document formalities are no longer key,on the contrary,management and justice(0.251%)and the participation of traders(0.211%)is particularly important.In summary,this paper focuses on three following policy recommendations: First,First,we need to establish a scientific index system that can directly measure the level of agricultural trade facilitation in all countries.Second,systematically plan specific measures to facilitate trade in agricultural products and further optimize the whole process of customs clearance.Third,we should recognize trade from the perspective of trade resilience and create an external environment conducive to protecting the trade resilience.Finally,Priority measures for improving trade facilitation should be formulated in light of the particularities of bilateral and major trade products,so as to avoid loss of efficiency and waste of resources caused by broad,inefficient and targeted trade facilitation.