KSA's rank raised in global Enabling Trade Index '12 |
Saudi Gazette - 01 July, 2012
The Middle East and North African region maintains a high degree of diversity in terms of enabling trade, with the United Arab Emirates (UAE) remaining in the top 20 though the country dropped by three positions since the last assessment mainly because its trade policy is assessed as less open than in previous years, while Algeria maintains its position at the bottom of the rankings, "The Global Enabling Report 2012" released recently said.
Saudi Arabia occupies 27th place globally and comes in 3rd in the region, moving up 13 positions in this year’s Report. Consistent improvements in all subindexes except for the market access component contribute to this result. The efficiency of Saudi Arabia’s customs services (29th) and border administration (24th) are important factors in facilitating trade. Customs procedures are efficiently organized (22nd) - it is neither costly nor burdensome to import and export goods, although it may be time consuming (e.g., it takes 17 days to import goods, which corresponds to 59th place).
Saudi Arabia also benefits from a solid institutional framework with transparent (11th) and efficient (12th) government institutions and well-defined property rights (22nd). The country’s recent accession to the WTO was an important step in opening up to foreign participation, yet Saudi Arabia maintains regulative barriers to foreign ownership (55th), and has signed only a small number of trade-enabling multilateral treaties (113th).
The positive assessment applies equally to its transport sector, where Saudi Arabia did not commit to opening up under the GATS provisions (59th). More openness to foreign competition in the logistics sector would support the development of an efficient logistics and transport industry in the country, thereby providing a base for further diversifying exports.
Yemen was added to this year’s sample at 119th position. The UAE leads the region at a strong 19th position, ahead of economies such as France, Ireland, and the US.
UAE assessment is reflected in its decline from 81st to 102nd place in the market access component of the Index. The country’s share of duty-free imports has decreased from 29 to 24 percent and its weighted tariff rate has increased, particularly for agricultural products.
UAE exporters now face a lower margin of preference in key export markets (116th, down from 113th). A number of factors provide a solid basis for further strong growth of trade in the country and a strengthening of its positioning as a key international logistics hub. Clearance of goods at the border is very easy (15th), although the transparency of border administration lags behind these excellent results somewhat (at 20th). In terms of the availability and quality of transport infrastructure, the UAE outperforms most countries in the world (11th).
Another distinct advantage is the country’s extremely high physical security (5th). Despite progress achieved in these areas, the UAE could benefit more from trade and its favorable geographic location on the Europe-Asia trade route if it continues to liberalize its transport services. The country presently occupies the 22th position in this category, up from 29th in the last edition. The government could also place a higher priority on the use of broadband connections (45th), which would not only facilitate trade directly-for example, by expediting and facilitating customs clearance through online procedures-but also would increase Internet use, which would be beneficial given that the business sector presently lags behind a number of other countries in this area (34th). However, the country’s main constraints remain its high domestic tariffs (59th) and the high trade barriers faced by the country’s exporters abroad (122nd).
Tunisia, although dropping six positions to 44th rank this year, remains the leading country in North Africa for enabling trade. The country’s association agreement with the European Union, which has created a free trade area between the two traders as of 2008, has contributed significantly to liberalizing imports into Tunisia.
Nevertheless, Tunisia maintains quite high tariffs (126th for its tariff rate), although the complexity of tariff regulations has been reduced since the last edition of this Report. The country does not apply tariff peaks or specific tariffs, and its share of duty-free imports remains high at 76 percent. In contrast to its domestic tariffs, Tunisia enjoys fairly easy access to foreign markets (33rd), supported by an important preference margin (25th).
Tunisia’s continued efforts to raise the efficiency of its customs administration and simplify the clearance process are paying off, as reflected in its 30th rank for its efficiency of import-export procedures (up from 43rd). Overall, although Tunisia continues to benefit from a business environment that is rather conducive to trade (37th), physical security and some aspects of the institutional framework have deteriorated in the wake of the events of 2011. Given the importance of trade on Tunisia’s economic policy agenda, the country should address these elements on a priority basis.
In addition, fostering more openness to foreign participation (58th) and a more efficient financial market (43rd) could further contribute to developing trade, which in turn would provide economic growth and jobs for the country’s population. Room for improvement also remains with respect to the availability and quality of transport services (69th) and the availability and use of ICTs (65th), sectors that would benefit from further liberalization and opening up to foreign participation. Egypt, the largest country in North Africa, has not yet fully realized its potential from international trade.
As reflected in its 90th rank in the ETI, important barriers to developing trade persist. Egypt’s most important disadvantage is its trade policy, which - despite considerable liberalization efforts-appears rather protectionist in international comparison.
The country applies high tariffs to 60 percent of total imports. At the same time, Egyptian exporters face low tariffs and a high preference margin abroad, placing the country well for developing exports. In order to take better advantage of growth and employment opportunities offered by international trade, Egypt would need to enhance its customs administration, which remains inefficient (80th) and corruption-ridden (94th); address serious concerns of the business community regarding the deteriorating securing situation (104th); and further promote the use of ICTs by business (90th) and individuals (Egypt ranks a low 82nd for the extent of Internet use by individuals).
Sub-Saharan African countries enable trade to different degrees, and the trade liberalization efforts of recent decades have not been sufficient to significantly improve the trade performance of the region as a whole. Many African countries have liberalized trade and enjoy significant preferences in target markets, but significant improvements in trade facilitation have not yet been achieved. It is more expensive for countries - both inside and outside the continent - to trade with Africa than with other regions; in many cases, the cost of trading is a more important obstacle to trade development than trade policies.
Mauritius maintains the top position in sub-Saharan Africa at 36th place, ahead of the rest of the region by a wide margin.
With low domestic policy-related barriers (6th) and few barriers in target markets (24th), the country is among the top performers in the entire sample on the market access pillar (6th). Yet, although tariffs are very low, complexities in their structure (90th) make it difficult for business to navigate. With rather efficient and transparent border agencies (29th) and a solid transport infrastructure (40th), potential bottlenecks in getting goods across borders could arise with respect to the availability and quality of transport services, as well as the quality of transport infrastructure, ranked 89th. International shipments are not easy and they are costly to arrange from Mauritius (104th).