allocation of resources. And while free trade should take place in ECOWAS, countries do not apply it, meaning that ECOWAS exporters have to pay duties and taxes when exporting within the region. Hence, rather than concentrating on tariffs, multilateral free trade arrangements should mainly correct burdensome and expensive NTBs and transit arrangements, which unearth the true potential for multilateral trade between Nigeria and its neighbors, especially Chad and Niger. With such agreements, if they span areas of services, including air connectivity, commercial collaboration, and financial services, some of the deeper integration facets will likely benefit both countries.

Although Nigeria has potentially large markets, growth has not yet been sustained long enough and Nigeria’s own domestic distortions remain. Integration with them runs a risk of exposing a neighbor to volatility and of importing inefficiency from the large neighbors’ domestic structures. But because their market potential is attractive to enterprises in Europe and Asia as large emerging economies like Nigeria add considerably to the market access potential of their immediate landlocked neighbors. For countries in these neighborhoods, division is compounded by distance. Appropriate instruments include institutional and infrastructure development, including regionally shared utilities, transport corridors and hubs, and a range of other regional public goods.

In parallel, there is an opportunity to streamline cross-border trade flows through border bazaars, which have been implemented along parts of the India-Bangladesh and China-Kazakhstan borders (Box 2). These bazaars, also known as haats main objective is a simplified regime for trade transactions (with near absence of formal processes and duty- and tax-free transactions). Facilities also provide needed services, expand the reach of local markets, and create a direct stimulus for income generation and employment. Successfully adopted haats have allowed the transition from subsistence level farming to small-scale commercial farming and related trade activities, including the eventual integration into more formal supply chains for export, especially for cross-border communities along the vast borders between Niger, Chad and Nigeria such as Maradi/Zinder/Diffa/Birnin Konni/Tahoua.

**Box 2.** Role of Border Haats (Bazaars)

Bazaars (or haats) have played a vital and historical role along the India-Bangladesh border. In 2011, the Governments of Bangladesh and India revived the border bazaar concept and opened a pilot haat near the Kurigram-Meghalaya border. The haats are makeshift bazaars held once a week, allowing border residents to trade eligible products free of customs duties as long as consignments do not exceed an agreed-upon threshold. Eligible products include local agricultural and horticultural products, spices, minor forest products (excluding timber), fresh and dry fish, dairy and poultry products, cottage industry items, wooden furniture, and handloom and handicraft items. Such products are also exempt from local taxes. Since the pilot, a total of four border haats are operational along the India-Bangladesh border in Meghalaya and Tripura. India has now proposed 27 new border haats across the 443 kilometer-long border.

The border bazaar model has been replicated in other regions, as well. The Korgas bazaar, on the Kazakhstan- China border, is an exemplary case study. It is one of the region’s largest cross-border bazaars, servicing some 1,300 traders per day. The bilateral regime allows visa-free entry for traders entering for the day and limited duty- free privileges (on up to US$1,000 of cargo, with a flat rate applied thereafter). On the Kazakhstan side of the border, cross-border trading has become the most important source of employment in Jarkent, the largest border city in the district. Conservative estimates indicate that 10 percent of the local population works directly in cross- border trade activities. Estimates suggest that each trader generates employment for an additional one to two persons engaged in warehousing, local transport, or sales within the bazaar. The existence of the bazaar has generated spillover effects, creating new retail and other commercial opportunities (Kaminiski and Mitra 2010). _Source: Bangladesh DTIS, World Bank, 2013._

# Efficacy of Trade Logistics Linking Markets

Geography adds dramatically to the export diversification challenges of landlocked countries like those of 14