capacity to provide good quality products delivered on time to buyers further up in the value chain. Yet, unpredictability in customs clearance times due to physical inspection, or delays at border posts generated by excessive cargo handling in response to controls by multiple border agencies, increase uncertainty in delivery times. Despite the recent introduction of the “ _Portal Único de Comercio Exterior_ ” - an electronic data interchange system that has reduced the time for documentary compliance for both exporting and importing<sup>16</sup> - and the recent cooperation agreements between Customs and other border control agencies (as well as with third countries’ agencies<sup>17</sup> ), Brazil still fares poorly in terms of monetary costs of border and documentary compliance when compared to a range of peers (Figure 10).

**Figure 10. Cost to export and import: border compliance in USD (2018)**

<!-- Start of picture text --> 1400<br>1200<br>1000<br>800<br>600<br>400<br>200<br>0<br>Argentina Indonesia Turkey India South Africa China Brazil<br>Cost to export: Border compliance (USD) Cost to import: Border compliance (USD)<br><!-- End of picture text --> Source: data from Doing Business database (2018) The use of those protectionist trade policies, particularly in tariff and NTMS, was not conducive to improve export competitiveness. On the contrary, import protection ends up acting as a direct tax on exports, making them less, not more competitive. The so-called Lerner Symmetry theorem states that an import tariff can have the same effects as an export tax—so reducing import protection is expected also to boost exports. The idea is that an increase in import tariffs appreciates the home real exchange rate as the domestic policy rate and the international interest rate differential increases. The terms of trade appreciation, in turn, induces a positive effect on consumption but a drag on real net exports (Linde and Pescatori 2017). The connection of imports (Hummels and Schauer, 2013). Customs delays also reduce exports value and export market diversification (Volpe Martincus, Carballo and Graziano, 2015).

> 16 Organized as a joint effort between more than 20 agencies and the private sector, Portal Unico promotes the simplification, streamlining and cost reduction of trade-related procedures and formalities with the support of risk management, automation and information technology tools. The initiative aims to eliminate redundant formalities and document requirements, to optimize the performance of the agencies which intervene in trade, and to reduce by 40 percent the average time to export and to import. According to the 2018 Doing Business report, the average time to comply with documentary export obligations fell from 18 to 12 hours between 2016 and 2017, a reduction of a third. The average time on the import side decreased from 120 to 48 hours, a reduction of 60 percent. Brazil improved by 10 positions in the “Trading across borders” indicator.

> 17 Recent examples include the cooperation between Mercosur and the Pacific Alliance countries to enable the exchange of electronic trade documents. Certificates of origin, originally in paper, are already being replaced by digital documents with Argentina, Chile and Uruguay. Brazil is also working to exchange electronic phytosanitary certificates with the United States.

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