Hidden trade barriers cost APEC $148 bn: World Bank
Bribes and hidden trade barriers are costing APEC member states at least $148 billion in lost economic activity, according to a World Bank report published on Monday.
By Agencies |
SYDNEY: Bribes and hidden trade barriers are costing APEC member states at least $148 billion in lost economic activity, according to a World Bank report published on Monday.
The report, released for an Asia-Pacific Economic Cooperation (APEC) summit in Sydney, said companies badly needed more transparent and predictable trade rules to reduce the uncertainty of trading in the 21-member group.
Studies showed that improving transparency would save at least $ 148 billion, equivalent to 7.5 per cent of APEC's trade in 2004.
The report is important because of the sheer size of APEC, whose economies account for 56 per cent of world gross domestic product and nearly half global trade.
The World Bank said APEC economies generally had a good record on reducing regular trade barriers such as tariffs but called for more action to address "hidden" barriers and "unofficial payments" or bribes.
"Regular traders may need to engage in such negotiations repeatedly, with a variety of different personnel," the report said.
"The outcome of the negotiations, whether or not a bribe is required and its amount, may differ in each case, thereby leading to unpredictability for private actors (companies) as to the level of effective costs they will face."
It said there were also hidden trade barriers, separate from the formal network of tariffs and quotas that added to the costs of doing business.
"In economies which still face problems facilitating trade, traders must consider additional costs when selling or buying goods and services on international markets."
Australian Trade Minister Warren Truss said the report showed there was more APEC could do to open up trade and investment within the region.
"Greater transparency and predictability boost trade and reduce costs to business and ultimately to the consumer," Truss said.
Truss also released a separate report that found removing restrictions on direct foreign investment would help APEC's poorer nations boost economic activity, thereby reducing poverty.
The report, prepared for APEC by the Canberra-based Centre for International Economics, found that restrictions on investment were greater in lower-income APEC countries.
It said they included excessive regulation, unclear property rights, poor legal systems and inadequate competition laws.
"They increase costs and risks and limit business competition, leading to lower productivity and growth," Truss said.
"The report concludes that if investors in APEC economies faced fewer barriers, investment would be higher and of a better quality, economic growth would rise and the incidence of poverty across APEC would fall."
The report, released for an Asia-Pacific Economic Cooperation (APEC) summit in Sydney, said companies badly needed more transparent and predictable trade rules to reduce the uncertainty of trading in the 21-member group.
Studies showed that improving transparency would save at least $ 148 billion, equivalent to 7.5 per cent of APEC's trade in 2004.
The report is important because of the sheer size of APEC, whose economies account for 56 per cent of world gross domestic product and nearly half global trade.
The World Bank said APEC economies generally had a good record on reducing regular trade barriers such as tariffs but called for more action to address "hidden" barriers and "unofficial payments" or bribes.
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It said companies may need to pay bribes to customs agents to ease import and export transactions, adding to the cost of doing business."Regular traders may need to engage in such negotiations repeatedly, with a variety of different personnel," the report said.
"The outcome of the negotiations, whether or not a bribe is required and its amount, may differ in each case, thereby leading to unpredictability for private actors (companies) as to the level of effective costs they will face."
It said there were also hidden trade barriers, separate from the formal network of tariffs and quotas that added to the costs of doing business.
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"In many economies, the flow of goods and services remains hindered by complicated customs regulations, insufficient use of modern technology in customs, the lack of handling and transportation infrastructure, or by other shortcomings," it said."In economies which still face problems facilitating trade, traders must consider additional costs when selling or buying goods and services on international markets."
Australian Trade Minister Warren Truss said the report showed there was more APEC could do to open up trade and investment within the region.
ADVERTISEMENT
"Greater transparency and predictability boost trade and reduce costs to business and ultimately to the consumer," Truss said.
Truss also released a separate report that found removing restrictions on direct foreign investment would help APEC's poorer nations boost economic activity, thereby reducing poverty.
The report, prepared for APEC by the Canberra-based Centre for International Economics, found that restrictions on investment were greater in lower-income APEC countries.
It said they included excessive regulation, unclear property rights, poor legal systems and inadequate competition laws.
"They increase costs and risks and limit business competition, leading to lower productivity and growth," Truss said.
"The report concludes that if investors in APEC economies faced fewer barriers, investment would be higher and of a better quality, economic growth would rise and the incidence of poverty across APEC would fall."
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