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Second, there is the challenge of affording rapid service to firms - of ensuring rapid access to requisite imported inputs, and (where relevant) of ensuring rapid reimbursentent of duties or taxes. Third, there is the challenge of efficiently caiibrating the neutrality instruments -- of ensuring that the instruments are used solely for the purposes intended, and (where relevant) of calibrating reimbursements to approximate closely the value of customs duties and indirect taxes paid for intermediate inputs embodied in final exports.

Setting aside for the moment how they are used in practice, even in principle the instruments vary in their abilities to meet the three challenges. While export processing zones and bonded factories can secure rapid, well-targeted duty and tax-free access to imported inputs for export firms, almost by definition they promote enclaves, excluding firms that partipate in both domestic and forign markets. Conversely, while duty drawbacks and exemptions can in principle be utilized by a broad range of firms, their implementation requires a formidable administrative apparatus not only to process rapidly applications for drawbacks, but also to calculate the many thousand input-output coefficients35 needed to compute accurately the appropriate magnitudes of duty and tax rebates.

Table 8 summar zes the limited available information as to experience with implementation of the instruments to secure trade neutrality.<sup>3</sup> Implementation of export processing zones and bonded factories appears to have proceeded quite smoothly in most countries for which information is available. As of 1985, 55 firms with exports valued at $416 million were located in export processing zones in the Philippines." Net foreign exchange amrnings in Jamaica's free zone rose from $1 million in 1982 to S32 million in 1987, and employment rose from under 1,000 to over 11,000.35 In Mauritius, the expansion of manufactured exports from specialist export firms was rapid almost immediately after the establishment of the bonded factory/EPZ system in 1970, and accelerated again in the 1980s in response to a further round of adjustment policies; as of 1988 bonded factories accounted for _59%_ of export value and about 20% of Mauritius' employment." M Rhee "Instruments for Export Policy" provides substantial detail as to how to administer duty drawback schemes.

3' Unlike the policy reforms examined earlier, there is no clearly identifiable successful endpoint against which progress in implementation can be guaged. Thus the categories for comparing country performance necessarily are different from those used earlier.

" The World Bank, The PhiliD2ines: Issues and Policies in the Industrial Sector Report Number 6706-PH, July 30, 1987. There is some question, however, whether the economic benefits of the Philippines zones are larger than the economic costs, given the high costs (compounded in at least one case by inappropriate location) of the infrastructure needed to establish the zones.

3' The World Bank, Jamaica: Adjustment under Changing Economic Conditions. Report No. 7753-JM, April 26, 1989, p. 15 X Data provided by Professor E.L.M. Lim Fat in a seminar on 19 September, 1989 at the IFC; see also E.L.M. Lim Fat 'The Mauritius Export Processing Zone' paper presented at Enterprise Symposium, UNCTIAD VII, Geneva, July 1987. Mauritius' Export Zone is in fact an administrative category that extends island-wide; hence its depiction here as a bonded factory system.