Trade facilitation and its effects on Chile’s bilateral trade between 2006 and 2014

Abstract

This study analyses the effects of trade facilitation on Chilean exports in 2006-2014. It reviews evidence and studies on trade facilitation and its effects, mainly in South America; and it analyses Chile’s export basket. An extended gravity model is then estimated for Chile’s bilateral trade flow with 89 countries, to measure the effect of trade facilitation during the period analysed. The estimation is performed using static panel data with fixed, random and dynamic effects. The key results show that the estimation that best describes Chile’s export behaviour is that which uses static panel data with random and dynamic effects and two lags of the dependent variable (exports). They show that per-container export costs have a negative effect on this trade flow.