Thursday, July 9, 2009

S'pore Tops List For Trade Openness

Source : The Business Times, July 9, 2009

HK, last year's No1, lost ground for very congested roads

Singapore is ranked top this year in the World Economic Forum's Enabling Trade Index, which measures openness to trade. Last year's No 1, Hong Kong, dropped to second place this year.

The report, written by Robert Lawrence of Harvard University, and Margareta Drzeniek Hanouz and John Moavenzadeh of the World Economic Forum, aims to assess policies and institutions that affect trade flows.

Singapore's 'very open market, as well as a highly efficient and transparent border administration, a well-developed transport and communications infrastructure, and an open business environment all contribute to this result', the report noted. 'Customs procedures are assessed as the least burdensome in the world, and time and cost for both import and export are among the lowest for all countries covered.'

Hong Kong's open domestic market won praise, as did its efficient customs, developed transport and communications infrastructure, and conducive regulatory environment.

However, it lost ground for its very congested roads and could benefit from more commitments to open up its transport sector, the report said. Switzerland, Denmark, Sweden, Canada, Norway, Finland, Austria and the Netherlands round out the top 10.

The report said that Singapore could also benefit from less congested roads and improvements to its info-comms infrastructure. The country was ranked 86th out of 121 countries for road congestion.

Singapore also improved this year on non-tariff barriers to trade - such as health and safety standards and certification, that are seen as instruments of protection, rather than applied for legitimate reasons.

In 2008, access to Singapore's market was perceived as 'fairly difficult' because of non-trade barriers, the report for that year noted, but said the area was highly subjective.

'There is no international consensus on what can be considered legitimate . . . (non-tariff measures) and what measures are illegitimate barriers to trade - making it difficult to provide a clear picture.' This year, Singapore moved from 84th to 38th on that measure.

The report said there was a general correlation between prosperity and openness to trade and said this should not be forgotten especially in poor economic times.

'Protectionism is not the cause of the crisis, but it could be one of its most important consequences,' the report said, noting that some countries are overtly favouring domestic industries or imposing further barriers to trade.

'Limiting global trade would not only amplify the current downturn, in the longer term it would also reduce growth - in particular in developing countries - plunging millions of people back into poverty.'

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