Is trade facilitation the right direction to go in building trade capacity?

This paper uses the gravity equation of international trade to study the relationship between trade facilitation commitments and trade flows using the OECDIWTO Trade Capacity Building - Trade Facilitation Database. In the analyses of 257 donor-recipients pairs, it is found that bilateral trade facilitation commitments are positively related, while multilateral sources are negatively related to exports from recipients to donors. These negative relationships for the multilateral institutions were found by using cross-sectional studies and are significant, for all but the World Customs Organization. From the firstdifferenced estimations, changes in exports from recipients to donors covariate positively with changes in the World Customs Organization trade facilitation commitments; the estimated effect is 0.23 percent to 0.41 percent increase in exports for every 10 percent increase in the World Customs Organization trade facilitation commitments. There is no evidence that changes in other trade facilitation sources will bring significant changes to bilateral trade.