Supply Chain Logistics, Trade Facilitation and International Trade: A Macroeconomic Policy View

Trade facilitation (TF) is the rubric that covers the research and policy analysis on impediments to global sourcing and multinational supply chains that are not the traditional border barriers such as tariffs or quotas. Trade-facilitation research offers a macroeconomic perspective on how policymakers should change the environment facing business to promote international trade and economic growth, whereas the microeconomic perspective of supply-chain logistics considers how a business should organize its operations given the policy environment. Four approaches to trade-facilitation research that are oriented toward measuring the policy environment facing business are covered in this review: country benchmarking, country or product case study, deep econometric analysis of one type of trade facilitation and econometric analysis of multiple trade-facilitation issues faced by businesses across multiple countries. All told, the research shows that the links between improved trade-facilitation policies and business global sourcing through international trade are positive, although which policy reforms support more global sourcing is unique to each country, depending on the products and supply chains that the country is part of, and initial conditions. Even so, a key finding that spans the research is that unilateral policy reforms within a country can expand international trade more than multilateral trade negotiations, and that trade-facilitation reforms tend to improve the country's supplier position more than its buyer activities. Moreover, adherence to International Organization for Standardization (ISO) and use of information technology are particularly important, confirming that ISO certification has become the price of admission for many supply chains.