Within each of the trade facilitation categories, the correlation of the inputs that go into the final index are high, but less than one suggesting robustness of the methodology of using more than one survey indicator to construct the indicator. As well, this raises confidence that the indicator is correctly assessing each country on that particular indicator of trade facilitation. Correlation coefficients of the inputs to the indicators are 0.802, 0.820, 0.696, and 0.658 for categories of port efficiency, customs environment, regulatory environment and service sector infrastructure, respectively.

Table 1 and Figures 1 to 4 (one for each trade facilitation indicator) report information about these indicators. Table 1 shows, for each input as well as for the trade facilitation indicator, the mean, standard deviation, and minimum value along with countries of best and worst practice. For best practice Singapore and Finland stand out. Worst practice is well distributed among many countries and regions of the world. The figures show the indexed inputs for regional groups of countries for each specific trade facilitation indicator.<sup>6</sup> Each indexed input is represented by a horizontal bar. The longer the bar extends to the right toward the maximum of 1.0, the higher ranked the region is in the category of trade facilitation. A vertical line is drawn at the average value. If a bar extends beyond the average for the particular trade facilitation measure, that indexed input for that region represents a condition superior to the average for all countries. For example, Figure 1 shows that OECD, Middle East and North Africa (MENA)<sup>7</sup> and East Asia regions are above the global average in terms of the two indexed inputs for port efficiency.

# **3.2 Trade Flows and Other Variables**

We use bilateral trade flow data available at the Commodity and Trade Database (COMTRADE) of the United Nations Statistics Division, for 2000 and 2001. We focus our attention on trade in manufactured goods, defined as commodities in categories 5 to 8 in SITC 1 digit industry except those in category 68 (non-ferrous metals). Our trade flow data aggregate the trade flows over the manufactured goods for a given importer-exporter pair.<sup>8</sup> Tariff data were derived from the Trade Analysis and Information System (TRAINS) of the United Nations Conference on Trade and Development (UNCTAD). We use the weighted average of applied tariff rates for the manufactured goods in 2000 and 2001 under the above definition where bilateral trade values corresponding each tariff line are used as the weight. The data on gross national p-roduct (GNP) and per capita GNP were derived for years 2000 and 2001 from the World Development Indicators published by the World Bank.

> 6 These regional indicators use a simple average of the region.  An average weighted by trade or GDP would no doubt yield somewhat different results. There is no clear interpretation of alternative weighted averages.  Moreover, these regional indexes are not used in estimation.

> 7 Data are available only for Egypt, Jordan, and Israel.

> 8 Standard International Trade Classification.  Revision 1 is used for our definition.

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