The impact of single windows on trade

• Published date: 01 October 2020
• Author: Santiago Chelala,Inmaculada Martínez‐Zarzoso
• Date: 01 October 2020
• DOI: http://doi.org/10.1111/twec.12945

World Econ. 2020;43:2549–2573. wileyonlinelibrary.com/journal/twec

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2549

© 2020 John Wiley & Sons Ltd

Received: 26 June 2019

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Revised: 3 February 2020

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Accepted: 7 February 2020

DOI: 10.1111/twec.12945

ORIGINAL ARTICLE

The impact of single windows on trade

InmaculadaMartínez-Zarzoso1,2

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SantiagoChelala3

1University of Göttingen, Göttingen, Germany

2Universitat Jaume I, Castellón de la Plana, Spain

3University of Buenos Aires, Buenos Aires, Argentina

Funding information

Spanish Ministry of Economy and Competitiveness, Grant/Award Number: ECO2017-83255-C3-3-P and UJI-B2017-33

KEYWORDS

International trade, single window, technology

1

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INTRODUCTION

Many countries have implemented or are in the process of implementing single windows (SWs) for

foreign trade, which functions as a single point of entry where all the regulatory documentation needed

to export or import goods converges.

Although there is consensus on the advantages of the system, few studies have analysed the im-

pact it has on import and export performance and the existing analysis are mostly for single countries

(Volpe Martincus, 2017). Quantitative estimates are generally measured in terms of the number of

days saved on the paperwork or formalities involved in foreign trade or the actual numbers of docu-

ments needed to complete these operations (Linke, 2012).

This paper provides an alternative impact assessment by estimating how SWs impact a country's

export performance. To this end, we estimate a structural gravity model for a sample of 176 countries

over the period from 1995 to 2017 for the flow of bilateral exports from (imports to) countries with

or without functioning SWs. More specifically, we examine the impact of SWs on trade by estimat-

ing how much trade increases when these trade facilitation instruments are implemented. With this

aim, we employ a two-step approach (Head & Mayer, 2014): in the first step, a PPML estimator with

multidimensional fixed effects is estimated, from which the country–time fixed effects are recovered,

whereas in the second step those are used as dependent variables and regressed on the SW indicator.

The main results obtained from the estimations of the log–log gravity model estimated with multi-

dimensional fixed effects show that total trade between two countries with functioning SWs increases

by about 37%, of which 23 corresponds to exports and 14 to imports. However, the results are more

modest when the PPML estimation of the gravity model is considered.

The paper is organised as follows: The second section describes the history of SWs, the third section

summarises the related literature, the fourth section presents the empirical methodology for measuring

the impact of SWs on trade and sets out the main results, and the fifth section contains our conclusions.

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MARTÍNEZ-ZARZOSO ANd CHELALA

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A BRIEF HISTORY OF SINGLE WINDOWS

Improving the efficiency of cross-border trade is a pressing need for both developing and developed

countries. Although there are earlier examples of SW-like mechanisms based on more rudimentary

information technology, SWs really began to take off at the end of the twentieth century with the

spread of the Internet.

The work of the United Nations Economic Commission for Europe was key to this process: in

2003, it recommended establishing SWs to simplify border formalities by unifying paperwork into

a single electronic record that would comply with regulatory requirements and facilitate the work of

border agencies and the business community (UNECE, 2003).

UNECE (2003) defines SWs as an environment that enables and streamlines flows of informa-

tion between those involved in cross-border trade and government entities, bringing significant gains

to all parties. These "one-stop shops" allow agents to submit all information needed for complying

with the regulatory requirements for importing or exporting through a single channel. SWs also store

standardised information and documents and function as a single entry point, such that the specific

information for complying with export, import and transit requirements only needs to be uploaded into

the system once.

In general, exporters or importers must fill in the electronic forms in their own country for export

or import using SWs.1 Single window projects usually involve IT-based innovation, but also create a

platform for effective collaboration at the border between customs, other government agencies (OGAs)

and businesses. SW could be viewed as a concept embracing a set of precepts and building blocks

designed to allow government to enhance its ability to administer and enforce legal requirements

across multiple agencies via the use of integrated processes, while at the same time enabling the rapid

and efficient flow of legitimate trade across the border (Widdowson et al., 2019). Several developed

and developing countries began to pay heed to this recommendation, which was followed by a series

of specific studies to help countries implement their own SWs. UN/CEFACT (2005) (or

Recommendation 33, as it is commonly known) sets out a number of necessary factors for successful

implementation. The list of requirements includes political will, strong leadership from the lead gov-

ernment agency, a strategic partnership between the government and key stakeholders in foreign trade,

and appropriate communication and marketing policy.

Recommendation 33 was followed by Recommendation 34 on the simplification and standardisa-

tion of data for trade and Recommendation 35 on the legal framework for SWs. The latter sought to

create a solid legal regime which allows for data to be collected, accessed and distributed and "clar-

ifies confidentiality, privacy and liability regimes, [making] it possible to create a solid basis for the

operation of the facility, and build a relationship of trust between all stakeholders’.

Recommendation 36 concerns the interoperability of SWs (UN/CEFACT, 2017), where the

term "interoperability" is defined as the ability of two or more systems or components to ex-

change information and use that information across borders with no additional effort on the part

of the trader. The objective of making SWs interoperable is to promote the digital exchange of

information between government agencies from different countries and thus to streamline

cross-border trade.2

1Data could be submitted from various entities depending on the country. Goods data are sent by the importer, exporter or

agent (broker). In some cases, all declaring agents (party legally responsible for the cargo) that are registered with the custom

can submit the data (Economic Commission for Europe: UN/CEFACT, 2019).

2Bernal Turnes (2015) describes ISWs as windows that are potentially interoperable and provides guidelines on the

mechanisms and systems required to interconnect two or more national SWs, be they public or private.