Finally, we calculate how much trade costs fall along BRI economic corridors. We find that trade costs would fall by 2.4 percent for the China‐Mongolia‐Russia Economic Corridor (CMREC) and up to 10.2 percent for the China‐Central Asia‐ West Asia Economic Corridor (CCWAEC) in the upper‐bound scenario. All other corridors would fall somewhere in between these two extremes. An important caveat to bear in mind in reading these results is the importance of network effects. Our method, based on a shortest path algorithm on the network of transportation links allows us to take into account all possible interactions between new/upgraded transport projects; and as a result we cannot link the decrease in trade costs of one country to a simple project or even a simple corridor. While these effects are largest along corridors because of the geography of the infrastructure projects, the decreases in shipping time and in trade costs between any two countries depend potentially on the whole set of improvements. More precisely, the gains are not only impacted by the transport projects located in each of those countries, but also by the projects in all countries that are along the shortest path between the origin and destination countries.

# **5. Extensions and complementary policies**

As we have seen in previous sections, transport infrastructures are key elements of the logistic chain and improvement in the transport network can have a significant impact on shipping time and trade costs between countries. However, by focusing only on planned transport projects related to the BRI, we might miss other gains that could be achieved through the BRI. In this section, we now turn to other policies that can affect shipping times over and beyond the improvement of the physical transport infrastructure and focus in particular on two elements: the implementation of trade facilitation policies (proxied by a reduction in the border processing time) and the improvement of corridor management and decrease in congestion (proxied by an speed increase all along economic corridors).

## **a. Trade facilitation**

BRI economies are very heterogenous in terms of their customs policies. Bartley Johns et al. (2018) finds that the trade facilitation performance is below average along BRI corridors. One reason is that the World Trade Organization Trade Facilitation Agreement (WTO‐TFA) – a multilaterally‐agreed set of sound trade facilitation practices – has not been ratified by 5 BRI WTO members and does not apply to further 13 BRI economies that are not WTO members. In this section, we investigate the combined effect of implementing the trade facilitation reforms and improving the transport infrastructure on shipment time and trade cost. In particular, we analyze additional scenarios using GIS network analysis in which import and export border delays for BRI countries are reduced by 50 percent.<sup>_18_</sup> This assumption allows us to understand the potential gains from additional complementary policies.

_Table 14: Trade facilitation scenario, border delays (hours)._

||**East Asia**<br>**& Pacific**|**Europe &**<br>**Central**<br>**Asia**|**Latin**<br>**America &**<br>**Caribbean**<br>**average t**|**Middle**<br>**East &**<br>**North**<br>**Africa**<br>**ime to trad**|**North**<br>**America**<br>**e(hours)**|**South**<br>**Asia**|**Sub‐**<br>**Saharan**<br>**Africa**|
|---|---|---|---|---|---|---|---|
|**Border Delay**|126.96|75.50|122.40|156.87|67.51|166.56|175.47|
|**Reduced Border Delay**|95.61|57.82|109.77|111.32|55.25|102.19|159.43|

18 Data on border compliance are from the World Bank’s Doing Business 2018 report.

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