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The importance of trading on time

The new paper, 'Trading on Time,' uses Doing Business data to show that delayed exports hurt the economies of developing countries.

On average, each additional day that a product is delayed prior to being shipped reduces trade by at least 1 percent. Put differently, each day is equivalent to a country distancing itself from its trade partners by 85 km on average. Delays have an even greater impact on developing country exports and exports of timesensitive goods, such as perishable agricultural products. In particular, a day’s delay reduces a country’s relative exports of time-sensitive to time-insensitive agricultural goods by 7 percent.

For example, if the Central African Republic reduced its median factory-to-ship time from 116 days to 27 days (the sample median), exports would nearly double.

This makes it unlikely that many countries, particularly in Africa, will be able to benefit significantly from existing duty-free access provisions or from future trade liberalization in OECD agricultural markets under a WTO agreement -- unless export procedures are simplified.

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