for the world economy are expected to be high (Duval, 2006; Mann, 2012) and are estimate
by Hillberry and Zhang (2015) to be worth $210bn.
Trade facilitation is also a key feature in regional agreements (e.g. within ASEAN or the
East African Community) and many bilateral trade agreements (e.g. those of the European
Union with the likes of Canada, Korea and Japan). It is also a feature within China’s One-
Belt-One-Road initiative. And, trade facilitation is a political, econom ic, business,
administrative, technical and technological issue (Butterly, 2003). It thus cuts across
many academic subjects but maintains focus on the elimination transaction costs which are
borne out of operational frustrations in the interactions between logistics operators and
government agencies (Grainger, 2011).
For customs managers concerned with safeguarding their businesses’compliance with
applicable border procedures (e.g. by putting appropriate management systems in place), the
resulting activities have also been described (see Grainger, 2016) as a supply chain related task
(e.g. concerning the impact of trade policy on location and production network configuration
decisions) and a logistical task (e.g. clearing goods at the ports and borders, presenting goods to
officials, and dealing with the immediate consequences of any delays or compliance failures).
Nonetheless, research within the supply chain and logistics literature which examines the
specific interactions between businesses and regulatory authorities are rare.
This paper seeks to readdress that gap in the literature by focusing on those
interactions between public and private sector actors and examining the comparative case
of the UK and Brazil.
What makes this paper special was the extensive engagement with the British and the
Brazilian business communities as well as considerable dialogue with key informants within
the respective administrations. In addition to its model that refers to three levels of
interaction between businesses and government agencies in cro ss-border logistics
operations, an analysis of experienced friction (a transaction cost which undermines
logistics performance) and scope for reducing transaction cost is provided.
2. Literature review
The supply chain management and logistics field is constructed on top of a divers set of
theories that, as reviewed by MacCarthy et al. (2016), relate to: structure, configuration
and coordination (Halldorsson et al., 2007), as well as strategy, governance and power
(Cox, 1999; Pilbeam et al.,2012).Asatopicitisconcernedwith competitive advantage that
might be borne out of cost or value advantages; and those advantages may be achieved by
reaching across organisational boundaries within or between contracting businesses
(Christopher, 1992). The reduction of transaction costs (Williamson, 1999, 2008) is a
Trade facilitation policy seeks to weed out transaction costs between business and
government actors in cross-border supply chains, whilst safeguarding business compliance
with applicable regulations, especially those concerning customs and border controls (WTO,
2015). Implementing trade facilitation is not without its challenges. There is a general
recognition thatit touches upon many fields that includepublic administration, international
relations, business regulation, law, business operations and politics (Butterly, 2003) and
relationshipsbetween public and private agents (Camposet al., 2017). As a subject it is closely
associated with tradeand custom policy (e.g. WTO, 2015), which,in turn, has a direct impact
on the performanceof border agencies (e.g. McLinden et al., 2010) as well as the performance
of logistics and supply chain management operations (e.g. Grainger et al., 2018).
The range of trade facilitation ideas aimed at reducing transaction costs, as reviewed by
Grainger (2011), is extensive and includes: The simplification and harmonisation of
applicable rules and p rocedure, the moder nisation of trade comp liance systems,
administrative practices, and institutional mechanisms and tools (see the below list).