The Impacts of Trade Facilitation Provisions on Fresh Agricultural Products Trade between China and the BRI Countries

Abstract

Trade facilitation is essential to lowering overall trade costs and increasing economic returns on both the multilateral and regional levels. Trade facilitation is also an integral part of trade agreements and has become an important component of the Belt and Road Initiative (BRI). This paper adopts a time-varying stochastic frontier gravity model and a trade inefficiency model and assigns values to different trade facilitation provisions to construct relevant indicators to assess the impacts of the trade facilitation provisions of the World Trade Organization Trade Facilitation Agreement (WTO TFA) and regional trade agreements (RTAs) on trade efficiency between China and BRI countries, as well as on the current conditions and challenges of fresh agricultural product trade between China and countries of the BRI, using data from 2011 to 2020. The results show that the size of domestic markets and population positively affect agricultural trade between China and BRI countries, while geographical distance has a negative impact on their scale of trade. Moreover, this study finds that the obligations set out in trade facilitation provisions of RTAs play an important role in improving trade efficiency, and among these trade facilitation obligations improving the legal provisions of “information transparency”, “customs cooperation” and “advance ruling” can significantly improve trade efficiency, however, some measures relating to “formalities” could potentially constitute barriers to trade. This study innovatively carried out an analysis of the impact of trade facilitation provisions on agricultural trade flows and efficiency from the perspectives of international trade law and economics and provides new policy recommendations for BRI countries to support agricultural trade.