Control and manage cross-border trade at physical cross-border regions.
Cross border legal trade has to be hassle free and less costly to manage illegal trade.
Cross Border Trading and illegal trading can be managed with the help of bilateral security. Today technology can help greatly in the the process of cross border trade in the physical border region.
There could be some bilateral underlying differences on why physical illegal cross-border trade is still existing? Would it be a complex problem? Because it related to multidimensions e.g people, trade, border and national security, etc.
Taking necessary measures to reduce the price difference between two borders will help a lot in reducing illegal trade.
Up to when nations have comparatives advantages among them, as base to trade, we can never bane considering it illegal. We should modify our legislation and try to find out the solution which may not be illegal with allowing natural trends of trade to meets the requirements of traders.
Regional integration plays a critical role. It plays a crucial role in stabilizing prices across the globe, which will trim country differences in prices and hence reduces illegal trade. Improving security in all borders through customs training and enforcement will also help. Imposing strict fines and penalties for those found dealing illegally is crucial as well.
A cross-border fuel fraud enforcement group and a cross-border tobacco enforcement group are both in existence but meet on a quarterly basis and at least twice each year. BIPA's recommendations included an update to legislation which currently allows prosecuted operators of filling stations to reopen after a few weeks; on-the-spot fines to anyone who has knowingly bought illegal goods; and targeted investment and more funding for enforcement purposes.
http://utv.ie/News/2015/02/23/Taskforce-to-crack-down-on-illegal-cross-border-trade-32228
In developing countries, a section of people who involve as small scale cross-border illegal traders may use as a means for escape from poverty. And in many cases people engaged to gain large scale commercial benefits like routine business operation. How could we distinguish these 2 groups of people. Should we treat them equally? In developed countries, the situation could be different.
lower barriers and facilitate trade and turn illegal trade into legal. Make difference between these two types smaller. There will be less incentive to trade illegal way.
Sometimes internal protectionism may also lead to illegal cross-border trade.
In general, facilitating trade could lead to reduced illegal (or informal) trade. See the following reference. Hope this helps.
Lesser, C., and E. Moisé-Leeman, 2009. Informal Cross-border Trade and Trade Facilitation Reform in Sub-Saharan Africa. OECD Trade Policy Working Paper No. 86, OECD Publishing.
Cross border legal trade has to be hassle free and less costly to manage illegal trade.
Yes, Abdin, I have been told by cross-border traders that transaction costs in Thailand are high. Sometimes it is burdensome to them.How about the situation in other countries?
In some ways countries which tend not to enforce laws against murder and other assault within their own borders can be thought of as frontiers, rather than countries. The USA knowingly does not regulate trade or immigrants from some countries but is hard on more educated immigrants.
Dear Choen,
There are 2 main points. First it is possible to make cross-border illegal trade less profitable. And second, it is possible to make cross-border illegal trade more hazardous.
To make cross border-illegal trade less profitable, customs duties and customs compliance costs shall be reduced. (Tariffs, non-tariff barriers, red tape...)
To make cross-border illegal trade more hazardous, detection probability (control effectivity) shall be improved by using advanced risk management techniques and severity of sanctions shall be increased.
Regarding your question "small scale illegal trade in developing countries", I strongly argue against making a discrimination. Rule of law should be maintained to develop and reduce poverty, it is not to possible to achieve sustainable development in a region or a country by promoting or tolerating illegal cross-border trade. If necessary make it legal...
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