another for the simplification of import procedures. Their results suggest that improvements in the areas of trade facilitation, which would lead to a relative increase in simplifying indexes, can stimulate trade flows between countries.

# **3 Model and data**

In this section we will present our model designed to evaluate the impacts of trade facilitation measures on international trade flows. We use a standard gravity model, such as the one in WILSON, MANN and OTSUKI (2005) or the one in SOUZA and BURNQUIST (2011). We use variables that have traditionally been used to explain trade, such as importer’s and exporter’s GDP, importer’s and exporter’s population, distance between the capital of the importer to the capital of the exporter, and dummy variables for preferential trade agreements. In this last case, we included dummies for the following agreements: Asean, APEC, FTAA, NAFTA, LAIA, AUNZ, Comesa, Mercosur, EU and SADC.<sup>3</sup> We also used dummy variables for adjacent countries and for eight different languages: English, French, Spanish, Arabic, Chinese, German, Portuguese and Russian.

But, unlike WILSON, MANN and OTSUKI (2005), or SOUZA and BURNQUIST (2011), we chose three different dummy variables to evaluate the impacts of trade facilitation on international trade flows: one for the presence of an Authorized Economic Operator (AEO) program in the importer country, one for the existence of a Single Window (SW) program in the importer country, and one for the existence of a mutual recognition arrangement (MRA) between the pairs of countries in our sample. Those three variables were used as a proxy for trade facilitation.

Moreover, we used a more recent data set, a panel that includes trade data for 72 countries for the years 2011 and 2012.<sup>4</sup> Thus, our chosen model is as follows:

> 3 Asean = Association of Southeast Asian Nations; APEC = Asia-Pacific Economic Cooperation; FTAA = Free Trade Area of the Americas; NAFTA = North America Free Trade Area; LAIA = Latin American Integration Association; AUNZ = <mark>Australia - New Zealand;</mark> Comesa = Common Market for Eastern and Southern Africa; Mercosur = Southern Common Market; EU = European Union; SADC = Southern Africa Development Community. For a complete and updated list of regional trade arrangements and its comprising countries, go to the WTO’s site: <u>http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx</u>

> 4 The 72 countries are: Argentina, Australia, Austria, Belgium, Bulgaria, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Czech Republic, Denmark, Dominican Republic, Ecuador, the Arab Republic of Egypt, El Salvador, Estonia, Finland, France, Germany, Greece, Guatemala, Hong Kong SAR, China, Honduras, Hungary, Indonesia, India, Ireland, Iceland, Israel, Italy, Jamaica, Jordan, Japan, the Republic of Korea, Lithuania, Latvia, Mexico, Mauritius, Malaysia, Nigeria, Nicaragua, Netherlands, Norway, New Zealand, Panama, Peru, Philippines, Poland, Portugal, Paraguay, Romania, the Russian Federation, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Thailand, Turkey, Ukraine, Uruguay, United Kingdom, United States, República Bolivariana de Venezuela, Vietnam,

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