Trade Facilitation: Bringing Kazakhstan Closer to the EU

Abstract: Kazakhstan is looking to deepen its political and economic ties with the European Union. This can likely be accomplished by increasing trade between the two entities. And an effective way of boosting trade may be to harmonize and simplify trade procedures – otherwise known as trade facilitation. This paper investigates how the volume of Kazakhstan’s exports to the EU is likely to be affected by Kazakhstan pursuing trade facilitation. This paper also estimates how large this effect is likely to be, and simulates the impact on Kazakhstan’s exports to the EU given different levels of trade facilitation. The empirical analysis is conducted using a gravity model of international trade, which is estimated using the fixed effect Poisson Pseudo-Maximum-Likelihood (PPML) method. The results indicate that trade facilitation could lead to a substantial increase in the volume of Kazakhstan’s annual exports to the EU.