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

1. Insight Report
The Global Enabling
Trade Report 2012
Reducing Supply Chain Barriers
ROBERT Z. LAWRENCE, MARGARETA DRZENIEK HANOUZ, AND SEAN DOHERTY, EDITORS

3. Insight Report
The Global Enabling
Trade Report 2012
Reducing Supply Chain Barriers
Robert Z. Lawrence
Margareta Drzeniek Hanouz
Sean Doherty
Editors
@ 2012 World Economic Forum

4. The Global Enabling Trade Report 2012 is published by World Economic Forum
the World Economic Forum within the framework of the Geneva
Global Competitiveness Network and the Supply Chain
and Transportation Industry Partnership. Copyright © 2012
by the World Economic Forum
The terms country and nation as used in this Report do
not in all cases refer to a territorial entity that is a state Published by World Economic Forum
as understood by international law and practice. The www.weforum.org
terms cover well-defined, geographically self-contained
economic areas that may not be states but for which All rights reserved. No part of this publication may be
statistical 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

5. Contents
Contributors v 1.5 Illicit Trade, Supply Chain Integrity, 57
and Technology
by Justin Picard, Advanced Track & Trace;
Partner Institutes vii
and Carlos A. Alvarenga, Accenture
Preface xiii 1.6 Business Perspectives on Obstacles 65
by Børge Brende and Robert Greenhill, to Trade: Evidence from New Survey Data
World Economic Forum by Julia Spies, International Trade Centre
Executive Summary xv 1.7 Expansion of Customs-Business 77
by Sean Doherty, Margareta Drzeniek Hanouz, Partnerships in the 21st Century
and Ronald Phillip, World Economic Forum by Kunio Mikuriya, World Customs Organization
1.8 The Merchant Fleet: A Facilitator of 85
World Trade
Part 1: Enabling Trade: Selected Issues 1
By Hans Oust Heiberg, DNB Bank ASA
1.1 Reducing Supply Chain Barriers: 3
The Enabling Trade Index 2012 1.9 Benefits of Trade Facilitation: 91
The Case of Costa Rica
by Robert Z. Lawrence, Harvard University;
by Carlos Grau Tanner, Global Express Association
and Sean Doherty and Margareta Drzeniek Hanouz,
World Economic Forum
1.2 The Rise of Global Supply Chains: 35 Part 2: Country/Economy Profiles 95
Implications for Global Trade How to Read the Country/Economy Profiles...................................97
by the Global Agenda Council on Index of Countries/Economies.......................................................101
the Global Trade System, World Economic Forum Country/Economy Profiles.............................................................102
1.3 The Global Value Chain, the 41 Technical Notes and Sources 367
Enterprise-Based Operating Model,
and Challenges to the Sovereign-Based
Economic Measurement System About the Authors 375
by Gene Huang, FedEx Corporation
Acknowledgments 379
1.4 Logistics Investment and Trade 47
Growth: The Need for Better Analytics
by Donald Ratliff and Amar Ramudhin,
Georgia Institute of Technology
The Global Enabling Trade Report 2012 | iii
@ 2012 World Economic Forum

6. @ 2012 World Economic Forum

7. Contributors
Professor Klaus Schwab, Executive Chairman, STRATEGIC ADVISORS
World Economic Forum Jennifer Blanke, Senior Director, Lead Economist, Global
Børge Brende, Managing Director, Government Relations Competitiveness Network, World Economic Forum
and Constituents Engagement, World Economic Forum John Moavenzadeh, Senior Director, Head of Mobility Industries,
Robert Greenhill, Chief Business Officer, World Economic Forum World Economic Forum
LEAD ACADEMIC AND CO-EDITOR DATA PROVIDERS
Robert Z. Lawrence, Albert L. Williams Professor of Trade The World Economic Forum is pleased to thank the following
and Investment, John F. Kennedy School of Government, experts who helped identify and provide data for the Enabling
Harvard University Trade Index:
Jean François Arvis, Senior Transport Economist, Trade Logistics
CO-EDITORS & Facilitation, International Trade Department, The World Bank
Sean Doherty, Associate Director and Head of Supply Chain Jean-François Bourque, Senior Legal Advisor, Business
and Transportation Industry, World Economic Forum Environment Section, Division of Business and Institutional
Margareta Drzeniek Hanouz, Director, Senior Economist, Support, International Trade Centre
World Economic Forum Carlos Grau Tanner, Director General, Global Express Association
Jan Hoffmann, Chief, Trade Facilitation Section, Trade Logistics
PROJECT MANAGER
Branch, Division on Technology and Logistics, United Nations
Ronald Philip, Community Manager, Supply Chain and Conference on Trade and Development
Transportation Industry, World Economic Forum
Mondher Mimouni, Chief, Market Analysis and Research,
International Trade Centre
PROJECT TEAM AT THE WORLD ECONOMIC FORUM
Monica Alina Mustra, Trade Facilitation and Logistics Specialist,
Global Competitiveness Network GFP Coordinator, International Trade Department, The World Bank
Beñat Bilbao-Osorio, Associate Director, Economist Andrea Navares Juanco, Analyst, Economics Department,
Ciara Browne, Associate Director International Air Transport Association
Roberto Crotti, Junior Quantitative Economist Xavier Pichot, Market Analyst, Market Analysis and Research,
Thierry Geiger, Associate Director and Economist International Trade Centre
Tania Gutknecht, Senior Community Associate Alexander Riveros, Trade Law Associate Expert, Business
Environment Section, Division of Business and Institutional
Caroline Ko, Junior Economist
Support, International Trade Centre
Cecilia Serin, Team Coordinator
Bismark Sitorus, Economic Affairs Officer, Trade Facilitation
Mobility Industries Section, Trade Logistics Branch, Division on Technology and
Logistics, United Nations Conference on Trade and Development
Katerina 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

8. @ 2012 World Economic Forum

9. Partner Institutes
The World Economic Forum’s Global Competitiveness Bangladesh
Network is pleased to acknowledge and thank the Centre for Policy Dialogue (CPD)
Mustafizur Rahman, Executive Director
following organizations as its valued Partner Institutes,
Khondaker Golam Moazzem, Senior Research Fellow
without which the realization of The Global Enabling Kishore Kumer Basak, Research Associate
Trade Report 2012 would not have been feasible:
Belgium
Albania Vlerick Leuven Gent Management School
Institute for Contemporary Studies (ISB) Priscilla Boairdi, Associate, Competence Centre
Artan Hoxha, President Entrepreneurship, Governance and Strategy
Elira Jorgoni, Senior Expert and Project Manager Wim Moesen, Professor
Endrit Kapaj, Researcher Leo Sleuwaegen, Professor, Competence Centre
Entrepreneurship, Governance and Strategy
Algeria
Centre de Recherche en Economie Appliquée pour le Benin
Développement (CREAD) CAPOD—Conception et Analyse de Politiques de
Youcef Benabdallah, Assistant Professor Développement
Yassine Ferfera, Director Epiphane Adjovi, Director
Maria-Odile Attanasso, Deputy Coordinator
Angola
Fructueux Deguenonvo, Researcher
MITC Investimentos
Estefania Jover, Senior Adviser Bosnia and Herzegovina
South 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, Professor
Argentina
Zeljko Sain, Executive Director
IAE—Universidad Austral
Jasmina Selimovic, Assistant Director
Cristian Alonso, Project Manager
Eduardo Luis Fracchia, Professor Botswana
Botswana National Productivity Centre
Armenia
Letsogile Batsetswe, Research Consultant and Statistician
Economy and Values Research Center
Parmod Chandna, Acting Executive Director
Manuk Hergnyan, Chairman
Phumzile Thobokwe, Manager, Information and Research
Sevak Hovhannisyan, Board Member and Senior Associate
Services Department
Gohar Malumyan, Research Associate
Brazil
Australia
Fundação Dom Cabral
Australian Industry Group
Marina Araújo, Economist and Researcher, The
Carola Lehmer, Senior Research Coordinator
Competitiveness and Innovation Center
Heather Ridout, Chief Executive
Carlos Arruda, Executive Director, International Advisory
Nikki Wilson, Administrative Assistant
Council and Professor, The Competitiveness and
Austria Innovation Center
Austrian Institute of Economic Research (WIFO) Fabiana Madsen, Economist and Researcher, The
Karl Aiginger, Director Competitiveness and Innovation Center
Gerhard Schwarz, Coordinator, Survey Department Movimento Brasil Competitivo (MBC)
Azerbaijan Erik Camarano, Director President
Azerbaijan Marketing Society Nikelma Moura, Communications Assistant
Fuad Aliyev, Project Manager Tatiana Ribeiro, Project Coordinator
Ashraf Hajiyev, Consultant Bulgaria
Bahrain Center for Economic Development
Bahrain Competitiveness Council, Bahrain Economic Anelia Damianova, Senior Expert
Development Board Burkina Faso
Nada Azmi, Manager, Economic Planning and Development lnstitut Supérieure des Sciences de la Population (ISSP),
Mohammed bin Essa Al-Khalifa, Chief Executive University of Ouagadougou
Maryam 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

10. Partner Institutes
Burundi Cyprus
University Research Centre for Economic and Social Cyprus College Research Center
Development (CURDES), National University of Burundi Bambos Papageorgiou, Head of Socioeconomic and
Banderembako Deo, Director Academic Research
Gilbert Niyongabo, Dean, Faculty of Economics &
cdbbank—The Cyprus Development Bank
Management
Maria Markidou-Georgiadou, Manager, International Business
Cambodia Banking
Economic Institute of Cambodia
Czech Republic
Sok Hach, President
CMC Graduate School of Business
Seiha Neou, Research Manager
Tomas Janca, Executive Director
Sokheng Sam, Researcher
Denmark
Cameroon
Innoption EMEA ApS
Comité de Compétitivité (Competitiveness Committee)
Carsten Snedker, Managing Partner
Lucien Sanzouango, Permanent Secretary
Ecuador
Canada
ESPAE Graduate School of Management, Escuela Superior
The Conference Board of Canada
Politécnica del Litoral (ESPOL)
Michael R. Bloom, Vice-President, Organizational
Elizabeth Arteaga, Project Assistant
Effectiveness & Learning
Virginia Lasio, Director
Anne Golden, President and Chief Executive Officer
Sara Wong, Professor
P. Derek Hughes, Senior Research Associate
Egypt
Chad
The Egyptian Center for Economic Studies
Groupe 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 Lead
Antoine Doudjidingao, Researcher
Economist
Gilbert Maoundonodji, Director
Magda Kandil, Executive Director and Director of Research
Celine Nénodji Mbaipeur, Programme Officer
Estonia
Chile
Estonian Institute of Economic Research
Universidad Adolfo Ibáñez
Evelin Ahermaa, Head of Economic Research Sector
Fernando Larrain Aninat, Director of the Master in
Marje Josing, Director
Management and Public Policy, School of Government
Camila Chadwick, Project Coordinator Estonian Development Fund
Leonidas Montes, Dean, School of Government Kitty Kubo, Head of Foresight
Ott Pärna, Chief Executive Officer
China
Institute of Economic System and Management Ethiopia
National Development and Reform Commission African Institute of Management, Development and
Zhou Haichun, Deputy Director and Professor Governance
Chen Wei, Research Fellow Tegegne Teka, General Manager
Dong Ying, Professor
Finland
China Center for Economic Statistics Research, ETLA—The Research Institute of the Finnish Economy
Tianjin University of Finance and Economics Petri Rouvinen, Research Director
Lu Dong, Professor Markku Kotilainen, Research Director
Hongye Xiao, Professor Pekka Ylä-Anttila, Managing Director
Bojuan Zhao, Professor
France
Huazhang Zheng, Associate Professor
HEC School of Management, Paris
Colombia Bertrand Moingeon, Professor and Deputy Dean
National Planning Department Bernard Ramanantsoa, Professor and Dean
Alvaro Edgar Balcazar, Entrepreneurial Development Director
Gambia, The
Hernando José Gómez, General Director
Gambia Economic and Social Development Research Institute
Nelson Fabián Villareal Rincón, Advisor
(GESDRI)
Colombian Council of Competitiveness Makaireh A. Njie, Director
Rosario Córdoba, President
Georgia
Côte d’Ivoire Business Initiative for Reforms in Georgia
Chambre de Commerce et d’Industrie de Côte d’Ivoire Tamara Janashia, Executive Director
Jean-Louis Billon, President Giga Makharadze, Founding Member of the Board of Directors
Jean-Louis Giacometti, Technical Advisor to the President Mamuka Tsereteli, Founding Member of the Board of Directors
Mamadou Sarr, Director General
Germany
Croatia IW Consult GmbH, Cologne Institute for Economic Research
National Competitiveness Council Adriana Sonia Neligan, Head of Department
Jadranka Gable, Project Administrator
WHU—Otto Beisheim School of Management, Vallendar
Kresimir Jurlin, Research Associate
Ralf Fendel, Professor of Monetary Economics
Mira Lenardic, Senior Advisor
Michael Frenkel, Professor, Chair of Macroeconomics and
International Economics
viii | The Global Enabling Trade Report 2012
@ 2012 World Economic Forum

11. Partner Institutes
Ghana Israel
Association of Ghana Industries (AGI) Manufacturers’ Association of Israel (MAI)
Patricia Djorbuah, Projects Officer Shraga Brosh, President
Cletus Kosiba, Executive Director Dan Catarivas, Director
Nana Owusu-Afari, President Amir Hayek, Managing Director
Greece Italy
SEV Hellenic Federation of Enterprises SDA Bocconi School of Management
Michael Mitsopoulos, Coordinator, Research and Analysis Secchi Carlo, Full Professor of Economic Policy, Bocconi
Thanasis Printsipas, Economist, Research and Analysis University
Paola Dubini, Associate Professor, Bocconi University
Guatemala
Francesco A. Saviozzi, SDA Assistant Professor,
FUNDESA
Strategic and Entrepreneurial Management Department
Edgar A. Heinemann, President of the Board of Directors
Pablo Schneider, Economic Director Jamaica
Juan Carlos Zapata, General Manager Mona School of Business (MSB), The University of the West
Indies
Guyana
Patricia Douce, Project Administrator
Institute of Development Studies, University of Guyana
Evan Duggan, Executive Director and Professor
Karen Pratt, Research Associate
William Lawrence, Director, Professional Services Unit
Clive Thomas, Director
Japan
Haiti
Keio University in cooperation with Keizai Doyukai Keizai
Private Sector Economic Forum
(Japan Association of Corporate Executives)
Edouard Baussan, Deputy Coordinator
Yoko Ishikura, Professor,Graduate School of Media Design,
Reginald Boulos, Coordinator
Keio University
Bernard Craan, Secretary General
Kiyohiko Ito, Managing Director, Keizai Doyukai
Hong Kong SAR Heizo Takenaka, Director, Global Security Research Institute,
Hong Kong General Chamber of Commerce Keio University
David O’Rear, Chief Economist
Jordan
Federation of Hong Kong Industries Ministry of Planning & International Cooperation
Alexandra Poon, Director Jordan National Competitiveness Team
Mukhallad Omari, Director of Policies and Studies Department
The Chinese General Chamber of Commerce
Aktham Al-Zubi, Senior Researcher
Hungary Kawther Al-Zou’bi, Head of Competitiveness Division
KOPINT-TÁRKI Economic Research Ltd.
Kazakhstan
Peter Vakhal, Project Manager
JSC “National Analytical Centre of the Government of the
Éva Palócz, Chief Executive Officer
Republic of Kazakhstan”
Iceland Takhir Aslyaliyev, Project Manager
Innovation Center Iceland Ayana Manasova, Chairperson
Karl Fridriksson, Managing Director of Human Resources and Alikhan Yerzhanov, Expert Analyst
Marketing
Kenya
Ardis Armannsdottir, Marketing Manager
Institute for Development Studies, University of Nairobi
Thorsteinn I. Sigfusson, Director
Mohamud Jama, Director and Associate Professor
India Paul Kamau, Senior Research Fellow
Confederation of Indian Industry (CII) Dorothy McCormick, Research Professor
Chandrajit Banerjee, Director General
Korea, Republic of
Marut Sengupta, Deputy Director General
College of Business School, Korea Advanced Institute of
Gantakolla Srivastava, Head, Financial Services
Science and Technology KAIST
Indonesia Ingoo Han, Senior Associate Dean and Professor
Center for Industry, SME & Business Competition Studies, Byungtae Lee, Acting Dean
University of Trisakti Professor Kayla Jisoo Lee, Manager, Exchange Programme
Tulus Tambunan, Professor and Director
Korea Development Institute
Iran, Islamic Republic of Joohee Cho, Senior Research Associate
The Centre for Economic Studies and Surveys (CESS), Iran Yongsoo Lee, Head, Policy Survey Unit
Chamber of Commerce, Industries and Mines
Kuwait
Hammed Roohani, Director
Kuwait National Competitiveness Committee
Ireland Adel Al-Husainan, Committee Member
Competitiveness Survey Group, Department of Economics, Fahed Al-Rashed, Committee Chairman
University College Cork Sayer Al-Sayer, Committee Member
Eleanor Doyle, Professor, Department of Economics
Kyrgyz Republic
Niall O’Sullivan
Economic Policy Institute “Bishkek Consensus”
Bernadette Power
Lola Abduhametova, Program Coordinator
National Competitiveness Council Marat Tazabekov, Chairman
Adrian Devitt, Manager
Latvia
Michelle 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

12. Partner Institutes
Lebanon Mexico
Bader Young Entrepreneurs Program Center for Intellectual Capital and Competitiveness
Antoine Abou-Samra, Managing Director Erika Ruiz Manzur, Executive Director
Hiba Zunji, Assistant René Villarreal Arrambide, President and Chief Executive
Officer
Lesotho
Jesús Zurita González, General Director
Private Sector Foundation of Lesotho
O.S.M. Moosa, Chaiperson Instituto Mexicano para la Competitividad (IMCO)
Tiisetso Sekhonyana, Researcher Priscila Garcia, Researcher
Lindiwe Sephomolo, Chief Executive Officer Manuel Molano, Deputy General Director
Juan E. Pardinas, General Director
Lithuania
Ministry of the Economy
Statistics Lithuania
. . Jose Antonio Torre, Undersecretary for Competitiveness and
Vilija Lapeniene, Director General
Standardization
Gediminas Samuolis, Head, Knowledge Economy and Special
Enrique Perret Erhard, Technical Secretary for
Surveys Statistics Division
. Competitiveness
Ona Grigiene, Deputy Head, Knowledge Economy and
Narciso Suarez, Research Director, Secretary for
Special Surveys Statistics Division
Competitiveness
Luxembourg
Moldova
Chamber of Commerce of the Grand Duchy of Luxembourg
Academy of Economic Studies of Moldova (AESM)
François-Xavier Borsi, Attaché, Economic Department
Grigore Belostecinic, Rector
Carlo Thelen, Chief Economist, Member of the Managing
Board Centre for Economic Research (CER)
Christel Chatelain, Attachée, Economic Department Corneliu Gutu, Director
Macedonia, FYR Mongolia
National Entrepreneurship and Competitiveness Council Open Society Forum (OSF)
(NECC) Munkhsoyol Baatarjav, Manager of Economic Policy
Dejan Janevski, Project Coordinator Erdenejargal Perenlei, Executive Director
Zoran Stavreski, President of the Managing Board
Montenegro
Saso Trajkoski, Executive Director
Institute for Strategic Studies and Prognoses (ISSP)
Madagascar Maja Drakic, Project Manager
Centre of Economic Studies, University of Antananarivo Petar Ivanovic, Chief Executive Officer
Ravelomanana Mamy Raoul, Director Veselin Vukotic, President
Razato Rarijaona Simon, Executive Secretary
Morocco
Malawi Université Hassan II, LASAARE
Malawi 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 Director
Chancellor L. Kaferapanjira, Chief Executive Officer
Mozambique
Malaysia
EconPolicy Research Group, Lda.
Institute of Strategic and International Studies (ISIS)
Peter Coughlin, Director
Mahani Zainal Abidin, Chief Executive
Donaldo Miguel Soares, Researcher
Steven C.M. Wong, Senior Director, Economics
Ema Marta Soares, Assistant
Malaysia Productivity Corporation (MPC)
Namibia
Mohd Razali Hussain, Director General
Institute for Public Policy Research (IPPR)
Lee Saw Hoon, Senior Director
Graham Hopwood, Executive Director
Mali
Nepal
Groupe de Recherche en Economie Appliquée et Théorique
Centre for Economic Development and Administration (CEDA)
(GREAT)
Ramesh Chandra Chitrakar, Professor and Country
Massa Coulibaly, Coordinator
Coordinator
Mauritania Bharat Pokharel, Project Director and Executive Director
Centre d’Information Mauritanien pour le Développement Mahendra Raj Joshi, Member
Economique et Technique (CIMDET/CCIAM)
Netherlands
Khira Mint Cheikhnani, Director
INSCOPE: Research for Innovation, Erasmus University
Lô Abdoul, Consultant and Analyst
Rotterdam
Habib Sy, Analyst
Frans A. J. Van den Bosch, Professor
Mauritius Henk W. Volberda, Director and Professor
Joint Economic Council of Mauritius
New Zealand
Raj Makoond, Director
Business New Zealand
Board of Investment Phil O’Reilly, Chief Executive
Kevin Bessondyal, Assistant Director, Planning and Policy
The New Zealand Institute
Dev Chamroo, Director, Planning and Policy
Catherine Harland, Project Leader
Raju Jaddoo, Managing Director
Rick Boven, Director
x | The Global Enabling Trade Report 2012
@ 2012 World Economic Forum

13. Partner Institutes
Nigeria Russian Federation
Nigerian Economic Summit Group (NESG) Bauman Innovation & Eurasia Competitiveness Institute
Frank Nweke Jr., Director General Katerina Marandi, Programme Manager
Chris Okpoko, Associate Director, Research Alexey Prazdnichnykh, Principal and Managing Director
Foluso Phillips, Chairman
Stockholm School of Economics, Russia
Norway Igor Dukeov, Area Principal
BI Norwegian School of Management Carl F. Fey, Associate Dean of Research
Eskil Goldeng, Researcher
Rwanda
Torger Reve, Professor
Private Sector Federation
Oman Roger Munyampenda, Chief Executive Officer
The International Research Foundation Vincent S. Safari, Director, Trade and Policy Advocacy
Salem Ben Nasser Al-Ismaily, Chairman
Saudi Arabia
Public Authority for Investment Promotion and Export National Competitiveness Center (NCC)
Development (PAIPED) Awwad Al-Awwad, President
Mehdi Ali Juma, Expert for Economic Research Khaldon Mahasen, Vice President
Pakistan Senegal
Competitiveness Support Fund Centre de Recherches Economiques Appliquées (CREA),
Maryam Jawaid, Communication Specialist University of Dakar
Imran Khan, Economist Diop Ibrahima Thione, Director
Shahab Khawaja, Chief Executive Officer
Serbia
Paraguay 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 Coordinator
Dionisio Borda, Research Member Bojan Ristic, Researcher
Fernando Masi, Director
Singapore
María Belén Servín, Research Member
Economic Development Board
Peru Angeline Poh, Director Planning
Centro de Desarrollo Industrial (CDI), Sociedad Nacional Cheng Wai San, Head, Research & Statistics Unit
de Industrias
Slovak Republic
Néstor Asto, Project Director
Business Alliance of Slovakia (PAS)
Luis Tenorio, Executive Director
Robert Kicina, Executive Director
Philippines
Slovenia
Makati Business Club (MBC)
Institute for Economic Research
Marc P. Opulencia, Deputy Director
Sonja Uršic, Senior Researcher
Michael B. Mundo, Chief Economist
Peter Stanovnik, Professor
Peter Angelo V. Perfecto, Executive Director
University of Ljubljana, Faculty of Economics
In cooperation with the Management Association of
Mateja Drnovšek, Professor
the Philippines (MAP)
Aleš Vahcic, Professor
Arnold P. Salvador, Executive Director
South Africa
Poland
Business Leadership South Africa
Economic Institute, National Bank of Poland
Friede Dowie, Director
Jarosław T. Jakubik, Deputy Director
Michael Spicer, Chief Executive Officer
Piotr Boguszewski, Advisor
Business Unity South Africa
Portugal
Coenraad Bezuidenhout, Executive Director for Economic
PROFORUM, Associação para o Desenvolvimento da
Policy
Engenharia
Jerry Vilakazi, Chief Executive Officer
Ilídio António de Ayala Serôdio, Vice President of the Board of
Directors Spain
IESE Business School, International Center for
Fórum de Administradores de Empresas (FAE)
Competitiveness
Paulo Bandeira, General Director
María Luisa Blázquez, Research Associate
Pedro do Carmo Costa, Member of the Board of Directors
Enrique de Diego, Research Assistant
Esmeralda Dourado, President of the Board of Directors
Antoni Subirà, Professor
Qatar
Sri Lanka
Qatari Businessmen Association (QBA)
Institute of Policy Studies
Issa Abdul Salam Abu Issa, Secretary-General
Ayodya Galappattige, Research Officer
Sarah Abdallah, Deputy General Manager
Saman Kelegama, Executive Director
Romania Dilani Hirimuthugodage, Research Officer
Group of Applied Economics (GEA)
Sweden
Liviu Voinea, Executive Director
International University of Entrepreneurship and Technology
Irina Zgreaban, Program Coordinator
Niclas Adler, President
The Global Enabling Trade Report 2012 | xi
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14. Partner Institutes
Switzerland United Arab Emirates
University of St. Gallen, Executive School of Management, Abu Dhabi Department of Economic Development
Technology and Law (ES-HSG) H.E. Mohammed Omar Abdulla, Undersecretary
Beat Bechtold, Communications Manager
Dubai Economic Council
Rubén Rodriguez Startz, Head of Project
H.E. Hani Al Hamly, Secretary General
Syria Emirates Competitiveness Council
Planning and International Cooperation Commission (PICC) H.E. Abdulla Nasser Lootah, Secretary General
Amer Housni Loutfi, Head
Institute for Social and Economic Research (ISER),
Syrian Enterprise and Business Centre (SEBC) Zayed University
Noha Chuck, Chief Executive Officer Mouawiya Alawad, Director
National Competitiveness Observatory (NCO)
United Kingdom
Rami Zaatari, Team Leader
LSE Enterprise Ltd, London School of Economics and
Taiwan, China Political Science
Council for Economic Planning and Development, Executive Adam Austerfield, Director of Projects
Yuan Niccolo Durazzi, Project Officer
Liu, Y. Christina, Minister Robyn Klingler Vidra, Researcher
Hung, J. B., Director, Economic Research Department
Uruguay
Shieh, Chung Chung, Researcher, Economic Research
Universidad ORT
Department
Isidoro Hodara, Professor
Tajikistan
Venezuela
The Center for Sociological Research “Zerkalo”
CONAPRI—Venezuelan Council for Investment Promotion
Qahramon Baqoev, Director
Eduardo Porcarelli, Executive Director
Gulnora Beknazarova, Researcher
Litsay Guerrero, Economic Affairs and Investor Services Manager
Alikul Isoev, Sociologist and Economist
Vietnam
Tanzania
Central Institute for Economic Management (CIEM)
Research on Poverty Alleviation (REPOA)
Dinh Van An, President
Joseph Semboja, Professor and Executive Director
Phan Thanh Ha, Deputy Director, Department of
Lucas Katera, Director, Commissioned Research
Macroeconomic Management
Cornel Jahari, Researcher, Commissioned Research
Pham Hoang Ha, Senior Researcher, Department of
Department
Macroeconomic Management
Thailand 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 Department
Pongsak Hoontrakul, Senior Research Fellow Trieu Thanh Son, Researcher
Toemsakdi Krishnamra, Director of Sasin
Piyachart Phiromswad, Faculty of Economics Yemen
Yemeni Businessmen Club YBC
Thailand Development Research Institute (TDRI)
Ahmed Abu Bakr Bazara, Chairman
Somchai Jitsuchon, Research Director
Ali Saeed Mahmoud Al-Azaki, Executive Director
Chalongphob Sussangkarn, Distinguished Fellow
Margret Arning, Consultant
Yos Vajragupta, Senior Researcher
Zambia
Tunisia
Institute of Economic and Social Research (INESOR),
Institut Arabe des Chefs d’Entreprises
University of Zambia
Majdi Hassen, Executive Counsellor
Patricia Funjika, Research Fellow
Chekib Nouira, President
Jolly Kamwanga, Senior Research Fellow and Project
Turkey Coordinator
TUSIAD Sabanci University Competitiveness Forum Mubiana Macwan’gi, Director and Professor
Izak Atiyas, Director
Zimbabwe
Selcuk Karaata, Vice Director
Graduate School of Management, University of Zimbabwe
Uganda A. M. Hawkins, Professor
Kabano Research and Development Centre
Bolivia, Costa Rica, Dominican Republic, Ecuador,
Robert Apunyo, Program Manager
El Salvador, Honduras, Nicaragua, Panama
Delius Asiimwe, Executive Director
INCAE Business School, Latin American Center for
Catherine Ssekimpi, Research Associate
Competitiveness and Sustainable Development (CLACDS)
Ukraine Arturo Condo, Rector
CASE Ukraine, Center for Social and Economic Research Lawrence Pratt, Director, CLACDS
Dmytro Boyarchuk, Executive Director Marlene de Estrella, Director of External Relations
Vladimir 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, Rector
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15. Preface
BØRGE BRENDE
Managing Director, Government Relations and Constituents Engagement, World Economic Forum
ROBERT GREENHILL
Chief Business Officer, World Economic Forum
The Global Enabling Trade Report 2012 reflects a world all 132 economies covered this year. The profiles provide
in which trade has rebounded from its 2009 slump. It is a an overview of the results on all indicators included in the
world 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 have
emerging economies. This shift highlights the virtuous been possible without the distinguished academics
role trade can play in economic growth and poverty and practitioners who have shared with us their
reduction. With progress stalled in multilateral trade knowledge and experience. We thank our Data
negotiations, 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 Nations
recognition that trade facilitation is most effective Conference on Trade and Development (UNCTAD), The
when 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 making
tasks 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 chapter
countries enable trade, the benefits are not just local or contributions for their cutting-edge insight: the members
bilateral but global. But global disaggregation of value of the Global Agenda Council on the Global Trading
chains through trade has brought challenges as well System, Gene Huang of FedEx Corporation, Donald
as opportunities. Cognizant of the need to safeguard Ratliff and Amar Ramudhin of the Georgia Institute
advances 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 Spies
companies can take to ensure that quality, security, of the International Trade Centre, Kunio Mikuriya of the
and trade are mutually reinforcing rather than opposing. World Customs Organization, Hans Oust Heiberg of
Several contributions also touch on the need to DNB Bank ASA, and Carlos Grau Tanner of the Global
transform our perspectives on trade by updating the way Express Association. We are grateful to the Industry
we 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., AP
enabling 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 this
attributes are captured in the Enabling Trade Index, volume, Robert Z. Lawrence of Harvard University and
which stands at the core of the Report and includes four Sean Doherty and Margareta Drzeniek Hanouz, as well
broad categories: market access, border administration, as Roberto Crotti, Caroline Ko, and Ronald Philip, of the
infrastructure, 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 John
is supported by the World Economic Forum’s Supply Moavenzadeh for their guidance. Appreciation goes also
Chain and Transportation Industry Partnership program. to other team members of the Global Competitiveness
Since its introduction in 2008, the Report has become Network and the Supply Chain and Transportation
a 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, and
helping 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 possible
facilitated by the World Economic Forum around the without the hard work and enthusiasm of our network
world, that focus on practical steps that can be taken by of over 150 Partner Institutes worldwide, who carry out
both governments and the private sector to overcome the Executive Opinion Survey, which is at the basis of
trade barriers in a particular country or region. this work.
The complete Report can be downloaded at
www.weforum.org/getr. It contains detailed profiles for
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16. @ 2012 World Economic Forum

17. Executive Summary
SEAN DOHERTY
MARGARETA DRZENIEK HANOUZ
RONALD PHILIP
World Economic Forum
The international trade agenda has seen many shifts over areas that are captured in subindexes A, B, C, and D and
the 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 extent
emerging markets faster than in other economies,
to which the policy framework of the country
confirming the move in economic activity away from the
welcomes foreign goods into the country and
developed 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 access
within the same company or groups of companies, B. The border administration subindex assesses the
and countries specialize in tasks rather than products. extent to which the administration at the border
With the Doha Development Agenda at an impasse, facilitates the entry and exit of goods through the
these developments raise the importance of practical following pillars:
measures that countries can take to enable trade and
Pillar 2: Efficiency of customs administration
better participate in the global division of labor, with the
Pillar 3: Efficiency of import-export procedures
ultimate aim of supporting economic growth.
Pillar 4: Transparency of border administration
Since its introduction in 2008, The Enabling Trade
Report has become a widely used reference, forming C. The transport and communications infrastructure
part of the toolbox of many countries in their efforts subindex takes into account whether the country
to increase trade and helping companies with their has in place the transport and communications
investment decisions. The Report is the basis for many infrastructure necessary to facilitate the movement
high-level public-private dialogues facilitated around the of goods within the country and across the border
world 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 transport
both governments and the private sector to overcome infrastructure
particular 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 ICTs
within the context of the World Economic Forum’s
Supply Chain and Transportation Industry Partnership D. The business environment subindex looks at the
program and was first published in The Global Enabling quality of governance as well as at the overarching
Trade Report 2008. A number of Data Partners regulatory and security environment impacting the
are collaborating in this effort: the Global Express business of importers and exporters active in the
Association (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 security
Development (UNCTAD), the World Bank, the World
Customs Organization (WCO), and the World Trade Each of these pillars is made up of a number of
Organization (WTO). We have also received significant individual variables. The dataset includes both hard
input from companies that are part of the Supply data and survey data from the World Economic Forum’s
Chain and Transportation Industry Partnership, namely Executive Opinion Survey (the Survey). The hard data
A.P. Möller Maersk, Agility, Brightstar, Deutsche Post were obtained from publicly available sources and
DHL, DNB Nor, FedEx, the Panama Canal Authority, international organizations active in the area of trade
Stena, Swiss International Air Lines, Transnet, UPS, (for example, IATA, the ITC, ITU, UNCTAD, the UN, and
Volkswagen, 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 covered
economies have developed institutions, policies, and by our research. It captures the views of top business
services facilitating the free flow of goods over borders and executives on the business environment and provides
to destination. The structure of the Index reflects the main unique data on many qualitative aspects of the broader
enablers of trade, breaking them into four overall issue
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18. Executive Summary
business environment, including a number of specific spreading across the entire ETI sample. As highlighted
issues related to trade. in past editions of the Report, the region’s outstanding
domestic and foreign market access continuous to
THE ENABLING TRADE INDEX 2012 RANKINGS be the main strength of many countries. However, the
The rankings from the ETI are shown in Table 1, which overall business environment remains as an area for
compares the 2012 rankings with those from the 2010 improvement, particularly in terms of corruption and
edition. 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 previous
continues to be dominated by relatively small, open years, Chile is an exception in the region, leading the
economies for which trade is key to achieving efficiency regional rankings at 14th place. Costa Rica, another
because 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 maintains
the 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 while
administration, 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 trade
occupy 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 African
administrations, and highly developed infrastructures. economies, led by Tunisia at 44th, face a different
Further down in the top 10 we observe some movement set of challenges, with trade policies and business
as New Zealand continues its upward trend, gaining environments that are less conducive to trade and a
one 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 to
respectively. Switzerland, Canada, and Luxembourg different degrees, and the trade liberalization efforts of
round 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 now
countries in the region have greatly benefited from trade enjoy important preferences in target markets, but
and made it a central part of their growth strategy. The major improvements in trade facilitation have not yet
ETI shows a wide gap between frontrunners Singapore, been achieved. As a result, it is still considerably more
Hong 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 more
opportunities offered by trade; this situation is reflected important obstacle to trade development than trade
in the results of the ETI. Except for those in the top 10 policies. The exception to the rule is Mauritius, at 36th
and Australia (17th), countries stay outside the top 20, place, which benefits from one of the most open trade
with 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 and
restrictive trade policies. Thailand (57th), Indonesia efficient logistics services.
(58th), and the Philippines have benefitted from trade This year the Report introduces for each country a
liberalization within the Association of Southeast Asian set of direct measurements of the factors seen as the
Nations (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 are
rank within the top 20 of the ETI rankings, reflecting reported in the Country/Economy Profiles in Part 2 of this
their 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, remain
However, their trade performance is constrained by the the most important obstacles for importing. Exporting is
overly restrictive common trade policy of the European hindered primarily by the difficulty of identifying markets
Union. The United States ranks 23rd this year, continuing and buyers and by insufficient access to trade finance.
its downward trend—the result of a deteriorating
infrastructure and a less conducive regulatory EXPLORING ISSUES OF ENABLING TRADE
environment. The Russian Federation, at 112th place, In addition to the Index rankings and the related
ranks below other large emerging markets such as analysis, the Report contains a number of chapter
Brazil, India, and China. The country would benefit from contributions that focus on issues relevant to the
a freer trade policy, more efficient border administration, current trading environment. The chapters range from
and 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 policies
America and the Caribbean places most of them in the to considerations of logistics investments, customs
middle of the ETI rankings, with individual countries
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19. Executive Summary
Table 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.
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20. Executive Summary
administration, the state of the merchant fleet, and a for the measurement of value-added in trade statistics
country 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 to
Implications for Global Trade,” summarizes recent work better illustrate where nations have real advantages and
by 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 Trade
Economic Forum. The GAC analyzes the consequences Growth: The Need for Better Analytics,” Donald Ratliff
of the rise of global value chains that will require new and Amar Ramudhin from the Supply Chain and
approaches, such as adjustments to ways that trade Logistics Institute at the Georgia Institute of Technology
flows 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 support
countries. The authors note that governments clearly customs functions and are no longer appropriate in a
need to recognize that exports are only part of the world of global supply chains. Trade-supporting logistics
development story. It is important for policymakers investment decisions are made by public entities, by
to develop better measures of trade flows net of private enterprises for public use in the sense that these
intermediate imports, and more generally to develop a decisions support services offered on the market, and
better appreciation of how the national economy fits into for specific enterprises. In all cases, decision making
global production chains. According to GAC members, could be dramatically improved through the availability of
a 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 destination
imbalances, to significant underestimates of the cost of databases for goods, logistical properties, service
protection, and to a failure to appreciate the importance schedules, and so forth. Given the billions of dollars
of 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 exchange
which is associated with foreign direct investment (FDI) and analysis would be worthwhile. The authors review
and the globalization of production, greatly raises the trends in trade flows revealed by currently available
stakes for countries to have open and predictable trade data and their influence on investment decisions. Their
and investment regimes, including efficient logistics. The work highlights in particular the growth of intra-Asia
authors conclude that the rise of value chains will require and Asia-Europe trade and the implications of that
the WTO to focus more strongly on pursuing plurilateral growth for investment. However, they caution against
negotiations. At the same time, preferential trading relying too heavily on trend data by illustrating the effect
agreements will need to adjust negotiation approaches of the 2009 downturn on trade, and conclude that
toward a reduction in transaction costs, rather than modeling scenarios with better data would improve risk
erecting 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 Track
the Sovereign-Based Economic Measurement System,” & Trace and Carlos A. Alvarenga of Accenture point
Gene Huang of FedEx Corporation argues that there out that one of the principal concerns of supply chain
is a mismatch between sovereign-based economic managers is, increasingly, supply chain integrity. For
activity measurement systems and globalized operating decades the complexity and opacity of global supply
models. A new method of measurement is needed to chains meant that undesirable activities could often
facilitate 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, together
author notes that we tend to underestimate the level of with new technologies, is leading to greater traceability
global 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 accountable
trade makes up 30 percent of world trade. Distribution for unethical practices and illegal goods in the supply
systems are built around global value flows directed chain. Incentives to infiltrate and defend supply chains
at the customer, so national income accounting can are ever-present. Increasingly commoditized production
be only imprecise. However, accounting must follow means that high margins are captured through
innovation. 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 the
often different than where the trade is taking place; the entire chain, as evidenced by the US National Strategy
impact of time is under-measured; non-equity models for Global Supply Chain Security, which aims to enhance
of foreign investment through contract manufacturing, “the integrity of goods as they move through the global
outsourcing, and licensing are not recorded in FDI supply chain.” Beyond regulatory compliance, the
investments; massive transfers of intangible assets and private sector has an interest in demonstrating oversight
knowledge are occurring without appropriate records; of supply chains to prevent overreaction by security
and measures of gross goods flow distort the picture agencies to cases of illicit trade. Product tracking and
of bilateral relationships. To conclude, the author calls authentication technologies need to progress faster
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