Assessing the impact of Trade Facilitation Agreement on Morocco's export performance: An ex-post analysis using structural gravity model

Abstract

The primary aim of this paper is to assess the ex-post impact of the Trade Facilitation Agreement (TFA) on Morocco's export performance following its ratification in 2019. The study goes beyond merely assessing the presence and magnitude of this impact (overall impact) to investigate its distribution across various policy areas (differentiated impact by policy domains). Using the OECD Trade Facilitation Indicators (TEIs) and employing the structural gravity model, estimates on panel data covering the years 2017 and 2019 suggest that the implementation of the TFA by Morocco contributes to a significant improvement in the intensive export margin. Concretely, the implementation of the TFA by Morocco contributes to an improvement ranging between 6.1% and 6.3%. However, this positive outcome appears primarily driven by Morocco's pre-existing commitment reflected in its average OECD TFIs scores, rather than by improvements in partner countries. Furthermore, the findings confirm heterogeneity in the impact across specific TFA policy areas. The magnitude of impact varies notably among reform domains. Particularly, internal and external cooperation among border agencies, streamlining procedures, and the use of automated processes appear to have the greatest impact on export value, compared to areas such as transparency and predictability. This promising result opens up additional improvement opportunities since it concerns areas in which Morocco has not yet achieved its best performance.

Keywords: Trade facilitation, Trade facilitation agreement, Intensive export margin, Structural gravity model JEL Classification: F13, F14, C33

Paper type: Empirical Research