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Review of Global Practices in Creating Cross-Border Trade Hubs

The study aimed to review global practices in creating cross border trade hubs with a view to draw policy lessons and develop recommendations for Kazakhstan. The case studies focused on Mexico, China and Malaysia, while the study aimed to provide a taxonomy of various different models, overview of institutional and management structures, regulatory and legislative framework, and assess economic impact and global integration trends.

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Review of Global Practices in Creating Cross-Border Trade Hubs

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  1. REVIEW OF GLOBAL PRACTICES IN CREATING CROSS-BORDER TRADE HUBS THE USAID TRADE CENTRAL ASIA ACTIVITY Consultant: Esen Caglar March 2023

  2. Review of Global Practices in Creating Cross-Border Trade Hubs USAID’s Trade Central Asia Activity ABOUT THE ACTIVY The goal of the USAID Trade Central Asia activity is to improve region-wide trade connectivity to accelerate economic growth and increase economic opportunity in Central Asia through harmonization of customs and border procedures, increasing public-private dialogue on trade and investment, improving cross-border firm-to-firm connectivity, and addressing gender-relevant trade issues. The USAID Trade Central Asia activity will support women traders and businesses in the region by reviewing current trade policies and practices for bias against women and designing activities to help women overcome these challenges. ____________________________ DISCLAIMER This Review was made possible through support provided by the Office in Central Asia, Bureau for Asia, U.S. Agency for International Development, under the terms of Contract No. 720-115-21-C-0002. The opinions expressed herein are those of the author(s) and do not necessarily reflect the views of the U.S. Agency for International Development. 2

  3. Review of Global Practices in Creating Cross-Border Trade Hubs USAID’s Trade Central Asia Activity Review of Global Practices in Creating Cross-Border Trade Hubs Final version, 29 March 2023 Esen Caglar, esen.caglar@palglobal.org 3

  4. Review of Global Practices in Creating Cross-Border Trade Hubs USAID’s Trade Central Asia Activity TABLE OF CONTENTS Introduction ............................................................................................................................ 6 Part 1 – Conceptual Framework: Taxonomy of Various Different Models, Definitions and Classifications ......................................................................................................................... 8 Part 2 – Case Studies ............................................................................................................ 16 2.1. Mexico Maquiladora Program .................................................................................. 16 Overall Framework ........................................................................................................ 17 Economic Impact and Integration into Global Supply Chains .......................................... 19 Regulatory Features and Incentives ................................................................................ 22 Management Structure and Institutional Features ............................................................ 24 2.2. Malaysia Iskandar Johor Bahru Cross Border Trade Hub ..................................... 26 Overall Framework ........................................................................................................ 27 Economic Impact and Integration into Global Supply Chains .......................................... 28 Regulatory Features and Incentives ................................................................................ 32 Management Structure and Institutional Features ............................................................ 35 2.3. China Cross Border Economic Zones (CBEZ) Program .......................................... 37 Overall Framework ........................................................................................................ 38 Economic Impact and Integration into Global Supply Chains .......................................... 40 Regulatory Features and Incentives ................................................................................ 40 Management Structure and Institutional Features ............................................................ 41 2.4. Other Cases ................................................................................................................ 43 Jebel Ali Free Zone (Dubai) ........................................................................................... 43 Jenin Industrial Estate (West Bank – Israel) .................................................................... 46 Kaesong Industrial Complex (North Korea – South Korea) ............................................. 48 Part 3 - Synthesis of Findings and Policy Recommendations .............................................. 50 4

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