Rankings are based on the quality of institutions, services and policies that allow the trade of goods over international borders. The higher the ranking the better the trade.
Singapore (Rank 1)
Singapore’s government has been positioning the country as a global business hub for a number of years, welcoming global trade. It has topped the report for four consecutive years, reflecting the way in which it has opened its borders to international trade. It scored top marks on the four key sub-indexes of market access, border administration, transport and communications infrastructure, and business environment. Singapore is regarded as a highly developed trade zone that is the most open in the world, with very low tax rates that represent 14.2 percent of GDP. This year, the economy is expected to grow at 3.8 percent, with exports falling slightly.
Netherlands (Rank 3)
Widely seen as having the best port infrastructure in the world, the Netherlands is the highest-performing European country in the index. The country was also praised for its entire transport infrastructure network, as well as its advanced and extensive use of IT for its trading operations. Border administration is both transparent and efficient, although far more expensive than Singapore and Hong Kong. Despite its strong performance on infrastructure and transport, the Netherlands performed slightly worse in terms of market access, coming in at 75th. Improving this access for overseas businesses would help the country climb up the rankings.
UK (Rank 6)
The UK is described as having a world-class border administration and infrastructure by the report, something that might come as a surprise to those that frequently use its airports. Trading in the UK has been made considerably easier in recent years, with a commitment to encourage cross-border business as a way of boosting the economy. Transport services enjoy positive logistical competence and tracking ability, as well as efficient delivery of goods. It also has an advanced IT infrastructure, coming second globally to connect businesses and consumers online. However, it was criticised for its market access and ‘high complexity’ of tariff structure.
Canada (Rank 14)
Canada’s relatively high performance is largely down to its attitude towards imports, with a reported 89.4 percent entering the country free of duty. It is described as ‘one of the most accessible among advanced economies’ in the world, although its performance in other areas hampered its score. The nation’s high tariffs mean that it scored poorly on the index for importing and exporting goods. It is the high tariffs and overly complicated import procedures that most companies feel are the main issues for importing goods into Canada. There were also concerns over restrictions on the amount of multilateral trade, as well as difficulties in the hiring of foreign labour.
Australia (Rank 23)
Australia was praised for its consistency, particularly in IT use and transport infrastructure. Despite this, the WEF says that the Australian government needs to improve both its port and railroad infrastructure if it is to continue to cater for its booming mining industry, as well as other trade, and avoid potential bottlenecks. Its border administration is efficient, even though the costs are relatively high. Australia employs high tariffs for exporters, meaning that foreign market access is especially difficult for traders. According to the report, a shipping container from Australia costs $300 more than from nearby New Zealand.
Taiwan (Rank 24)
Jumping five places up the index, Taiwan has undertaken a series of public sector initiatives designed to boost trade and improve economic efficiency. It was rated highly in the report for its efforts to simplify border administration, although saw a drop in terms of market access. The country did finish top for customs transparency and terrorism incidence, as well as fifth for trade finance. While the rise was a positive step for Taiwan, it performed poorly in terms of margin preference for destination markets, coming 134th out of 138, showing that the country is not integrating fast enough with its local neighbours, preventing domestic firms from expanding overseas.
Mexico (Rank 61)
Mexico’s performance has been mildly better than its Central American and Caribbean neighbours, with market access being cited as one of its competitive advantages. As much as 83.7 percent of imports enter into Mexico free of customs duty, meaning it is relatively welcoming of overseas trade. However, it is criticised for its lack of infrastructure, and its poor quality of transportation. A dramatic improvement of Mexico’s rail network would help to boost trade, as well as making the postal system more efficient. Marked down for his lack of accountability of public institutions, President Enrique Peña Nieto has however, been praised for being open to FDI.
Argentina (Rank 95)
Populist and anti-business measures by the government have meant companies are wary of doing business in Argentina. Border administration was criticised, with imports and exporters suffering from costly and prolonged procedures. The WEF say the government should look to speed things up by employing useful IT services to improve transparency and accountability. There are also concerns over the country’s business environment, and in particular the protection offered over property rights, FDI rules and access to finance. If Argentina is to improve the business environment for importers and exporters, it will need to relax its protectionist policies.