reduces these at-the-border obstacles could significantly lower trade costs.

Reductions in tariffs, often embedded in broader trade agreements, have contributed to rapid trade growth in much of the period since World War II. However, tariffs have risen over the past five years as trade tensions have mounted, contributing to concerns about a protectionist turn among some major economies (World Bank 2021a). Reversing these increases and making further progress with tariff reduction would serve to lower trade costs. Reforms that lower import tariffs have generally been found to be associated faster economic growth, although effects have been heterogeneous (Irwin 2019). For example, the widespread removal of trade barriers and reduction of import tariffs in the mid-1980s to mid-1990s ushered in a period of rapid global trade integration (Irwin 2022). Removing uncertainty about trade policy by reducing the gap between actual applied tariffs and maximum (bound) tariffs, could further lower trade costs: the regression results suggest that a 10-percentage point reduction in this gap would be associated with about one-seventh lower trade costs .

The decline in trade costs over the past three decades has stemmed partly from new RTAs and RTA reforms. The number of RTAs more than quintupled between the early 1990s and the mid-2010s, and the focus of agreements has shifted from tariff cuts to lowering nontariff barriers (World Bank 2016). The largest RTA in terms of the number of member countries, the African Continental Free Trade Area (AfCTA), for example, have raised real incomes among its members mostly by lowering nontariff barriers and through the implementing of trade facilitation measures (World Bank 2020c). The members of the major RTAs in North America (the USMCA) and Europe (the EU) account for more than 40 percent of global GDP (figure 9). RTAs have fostered domestic reforms in EMDEs and generated momentum for greater liberalization and expansion of trade opportunities (Baccini and Urpelainen 2014a, 2014b; Baldwin and Jaimovich 2010).

A multitude of costs are imposed on trade by administrative border and customs procedures. Documentation and other customs compliance requirements, lengthy administrative procedures, and other delays have been estimated to increase transaction costs by 2-24 percent of the value of traded goods. In some countries, government revenue losses from inefficient border procedures may exceed 5 percent of GDP (Moïsé and Le Bris 2013).

The WTO Agreement on Trade Facilitation (WTO TFA), adopted in 2014 and ratified by more than 90 percent of WTO members, provides a framework to streamline inefficient control and clearance procedures of border authorities, reduce unnecessary border formalities, and cut opaque administrative costs. 72 percent of the commitments made under the agreement have been implemented to date, but progress has been uneven, with less than 40 percent of commitments implemented in low-income countries. In West Africa, an initiative is underway to cut trade costs by electronically sharing customs transit data (World Bank 2021d). Guatemala and Honduras have reduced the time taken by traders to cross the border from 10 hours to 7 minutes by integrating