1

Facilitating Trade:An Asia-Pacific Perspective

Yann DuvalChief, Trade Facilitation, Trade and Investment Division,

United Nations Economic and Social Commission for Asia and the Pacific

Expert Group Meeting on Trade & Transport Facilitation, Dubai, 10-11 April 2013

Introduction

What have Asian countries done to facilitate trade?

I

III

IV

II

Table of Contents

Trade costs in Asia-Pacific and key policy drivers

2

Way forward in Asia-Pacific and Lessons learned

VI

Trade Facilitation (TF)? - Definition

• “the simplification and harmonization of international trade procedures”

• “increasing the cost effectiveness of international trade transactions”

Trade Facilitation? Definition

International trade costs in developing regions*

5

Asia-Pacific region as a whole doing relatively well...

*based on ESCAP-World Bank International Trade Cost Database

Intra- and Inter-regional trade costsof Asia and the Pacific subregions*

Region ASEAN-4East Asia-

3

North and

Central Asia

SAARC-4 AUS-NZL EU-3 USA

ASEAN-4 75.40% 77.58% 381.31% 125.79% 86.09%110.22

% 84.35%

  (3.08%) (7.71%) (7.94%) (0.74%)

(-11.54

%) (6.58%)(12.36%

)

East Asia-3 77.58% 51.83% 220.76% 124.88% 80.14% 85.75% 63.03%

  (7.71%) (-8.46%)

(-12.09

%) (1.85%)

(-14.21

%) (-5.59%) (-1.36%)

North and Central Asia 381.31% 220.76% 141.27% 261.12% 295.77%

165.83% 191.13%

  (7.94%)

(-12.09

%) (0.47%)

(-13.15

%)

(-14.39

%) (-4.86%) (3.46%)

South Asia (SAARC-4) 125.79% 124.88% 261.12% 104.96% 127.04%

115.22% 107.84%

  (0.74%) (1.85%)

(-13.15

%) (-0.65%) (-8.08%) (5.96%) (8.26%)

AUS-NZL 86.09% 80.14% 295.77% 127.04%  102.07

% 89.70%

 

(-11.54

%)

(-14.21

%)

(-14.39

%) (-8.08%)   (-5.90%) (-4.67%)

European Union (EU-3) 110.22% 85.75% 165.83% 115.22% 102.07% 45.93% 67.19%

  (6.58%) (-5.59%) (-4.86%) (5.96%) (-5.90%)

(-0.38%) (1.07%)

USA 84.35% 63.03% 191.13% 107.84% 89.70% 67.19%  

  (12.36%) (-1.36%) (3.46%) (8.26%) (-4.67%) (1.07%)  

*Based on ESCAP-World Bank trade cost database, excluding tariff costs. Percentage changes in trade cost between 2001-2004 and 2007-2010 are in parentheses.

7

Contribution of natural barriers, behind-the border facilitation and trade-related practice to trade costs

0-10%*

60-90%*

10-30%*

Tariff Trade Costs

Policy-RelatedNon-Tariff Trade Costs

Natural Trade Costs(Geographical and Cultural Factors)

Direct Behind- & At-the border Trade Costs1%

6-7%

6-7%

16-18%

52-57%

Availability/use of ICT Services

Business (Regulatory) Environment

Maritime Connectivity/Services

Other Trade Costs•Indirect cost of trade procedure•Currency fluctuation•Other non-tariff barriers

* Illustrative based on casual observation of the data only. Natural trade costs for landlocked countries may be outside the range shown for natural trade costs.

Key factors in lowering trade costs – Asia-Pacific Perspective

Introduction

What have Asian countries done to facilitate trade?

I

III

IV

II

Table of Contents

Trade costs in Asia-Pacific and key policy drivers

8

Way forward in Asia-Pacific and Lessons learned

VI

Figure 1. Trade Facilitation and paperless trade implementation scores of selected Asian countries

Surveys were completed by participants to the APTFF 2012 involved in trade facilitation in their own countries, as well as other selected experts. Following consistency checks and collection of additional and complementary data by ESCAP after the Forum, a dataset of trade facilitation implementation in 26 Asian countries was finalized for the year 2012. The Survey questionnaire and the data set are available at: http://www.unescap.org/tid/projects/tfforum12-survey.asp

Trade facilitation & paperless trade implementation in Asia – APTFF Survey 2012

Trade Facilitation strategies in Asian countries

National Trade Facilitation Bodies/Committees in Asian countries

Trade facilitation & paperless trade implementation in Asia – APTFF Survey 2012

Implementation of WTO-related trade facilitation measures by Asian countries

Trade facilitation & paperless trade implementation in Asia – APTFF Survey 2012

Availability of electronic/automated customs systems in Asian countries

Development of National Single Window system in Asian countries

Trade facilitation & paperless trade implementation in Asia – APTFF Survey 2012

13

Bilateral/regional trade agreements with trade facilitation provisions involving Asia-Pacific countries

Source: Duval (2011)

Trade facilitation: case of ASEAN

• ASEAN: most integrated subregion in Asia– 10 member countries; 25% intraregional trade

• Major trade facilitation measures: Customs administration

ASEAN Harmonized Tariff Nomenclature (AHTN) Harmonization of practices in customs valuation Post-Clearance Audit System and Green Lanes for CEPT products Harmonized Customs Declaration Document Cargo Processing

Standards & conformance Adoption/direct use of international standards of ISO/ IEC/ ITU Sectoral approach mutual recognition of conformance procedures

Transport facilitation Multimodal transport linkages Transit facilitation framework

Single window for submission and processing of trade-related data and documents

National Single Window (SW)?

‘’A facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements.’’

UN/CEFACT Recommendation 33

15

ASEAN Single Window

16

Concept: connecting national single windows so that relevant trade data and information is automatically available to authorities in both the importing and exporting country, avoiding any delays and inconsistencies.“deadline for implementation”: 2015

Way Forward for trade facilitation in Asia-Pacific: cross-border paperless trade

ESCAP Resolution 68/3: “Enabling paperless trade and the cross-border recognition of electronic data and documents for inclusive and sustainable intraregional trade facilitation”• Paperless trade: the use of electronic instead of paper

documents in trade transactions

• Adopted by ESCAP Member countries in May 2012• Sponsored / co-sponsored by: Indonesia, Nepal, Republic

of Korea, Sri Lanka, and Thailand

• Res. 68/3 requests ESCAP Secretariat to support and facilitate the process for the development of regional arrangements on the facilitation of cross-border paperless trade

17

Lessons learned from Asian experience

• Trade facilitation begins at home– Strong political will a must

• Institutionalize trade facilitation / assign a lead agency– Regular stakeholder consultations– Consult and systematically involve the private sector

• Set ambitious (long-term) targets– National/regional paperless trade

• Apply information and communication technologies (ICT)– Don’t forget the legal framework

• Take a holistic approach to trade facilitation in order to identify bottlenecks along the entire supply/transaction chain– Services and behind the border measures often key to efficiency– Measure progress & update strategy accordingly

18

Business Process Analysis (BPA) for Trade Facilitation

Number of parties: 11 on export side; 12 on import sideNumber of documents: 17 on export side; 44 on import side

Trade in Electronics from CHINA to THAILAND

20

www.unescap.org\unnext\www.unescap.org\unnext\

For more information, visit the United Nations Network of Experts for Paperless Trade in Asia and

The Pacific

Thank You! (duvaly@un.org)

The next Asia-Pacific Trade Facilitation

Forum (APTFF) will be held this year on

10-11 September 2013 in China.

You are all welcome!

ANNEX

21

BPA as a first step to single window and paperless trading environment

Establishment of Single Window and Paperless Trading Environment

Document Simplification and Data Harmonization

Business Process Simplification

Business Process Analysis (BPA)

22

ESCAP-WB Trade Cost Database : Definition

Our measure of ad valorem trade costs:

whereτij denotes geometric average trade costs between country i and country j

tij denotes international trade costs from country i to country jtji denotes international trade costs from country j to country itii denotes intranational trade costs of country itjj denotes intranational trade costs of country j

Xij denotes international trade flows from country i to country jXji denotes international trade flows from country j to country iXii denotes intranational trade of country iXjj denotes intranational trade of country jσ denotes intra-sectoral elasticity of substitution (which is set = 8)

11

12

1

2

1

jiij

jjii

jjii

jiijjiij XX

XX

tt

tt

How to Access Trade Cost Data

24

http://www.unescap.org/tid/artnet/trade-costs.asp

How to Access Trade Cost Data

25

http://data.worldbank.org/data-catalog/trade-costs-dataset

26

“an ongoing community of knowledge and practice to facilitate the implementation of single window and paperless trade in the Asia-Pacific region ”

… As part of ESCAP’s effort to enhance regional connectivity and integration

in cooperation with UNECE

United Nations Network of Experts for United Nations Network of Experts for Paperless Trade in Asia and the PacificPaperless Trade in Asia and the Pacific

27

UNNExT Institutional StructureUNNExT Institutional Structure

28

Tools & GuidesDevelopment

Capacity Building

Knowledge Sharing

RegionalAdvisory Service

Research & Analysis

• Business Process Analysis (BPA) Guide (Dec 2009)• Data Harmonization Guide (Jan 2012)• Legal Guide (Sep 2012)• Single Window Planning & Implementation Guide (Sep 2012)

• National Workshop on SW& BPA, Mongolia (Sep. - Dec.09)• Workshop on TF & BPA Training, Cambodia (Jun. – Jul. 2010)• National Workshop on SW, Nepal (Feb. 2011)• Workshop on SW planning & Implementation (Apr. 2012)

• UNNExT Brief Series• Online Working Groups & Databases• Asia Pacific Trade Facilitation Forum

• Mongolia Single Window Master Plan Peer Review (Oct. 2010)• Nepal: Towards Single Window Environment (2011)• Study visits to Single Window Facilities (Apr. 2012)

• Regional Study on Improving Trade Procedures (2011) (Using BPA Guide)• Cooperation with ARTNeT (www.artnetontrade.org)

UNNExT Activities: ImplementedUNNExT Activities: Implemented

29

Step by Step Approach to Paperless TradeStep by Step Approach to Paperless TradeFacilitation and UNNExT GuidesFacilitation and UNNExT Guides

Measuring performance is important

From ADB-ESCAP Reference Book on “Designing and Implementing Trade Facilitation in Asia and the Pacific”, available at: http://www.unescap.org/tid/projects/tfforum_adbescapbook.pdf

ESCAP’s Initiative on Business Process Analysis (BPA) for Trade Facilitation

• Part of ESCAP’s support to paperless trade – United Nations Network of Experts for Paperless

Trade in Asia and the Pacific (UNNExT)• www.unescap.org/unnext/

• UNNExT Business Process Analysis Guide for the Simplification of Trade Procedures

BPA? Analysis, including mapping,timing and costing of a process(e.g., moving goods from factory to deck of ship)

Why? Necessary first step to improving a process

Output of a UNNExT Business Process Analysis (1)

32

Use Case Diagram

Activ

ity D

iag

ram

s

Define scope of analysis,

stakeholders involved,Activities to be studied

Based on Universal Modeling Language (UML)

Output of a UNNExT Business Process Analysis (2)

The time-procedure chart*

*Frozen shrimp exports; Data collected by Institute for IT Innovation, Kasetsart University (2007)

Some findings from the BPA studies

• Document preparation takes most time, followed by transport/ handling issues

• “Basic” trade facilitation measures not always in place• Procedures between private parties are a very big part of the

overall trade process• Different countries require different documents and information

for a same export product – Harmonization of procedures and documentary requirements

crucial• Importance of port logistics confirmed• …• Large variations in time and cost across products (or product

usage), transport routes, destination, firm size,…

Policy Recommendations from BPA (1)

• Full and inclusive representation of the private sector in trade facilitation initiatives is essential.

• Implementation of basic trade facilitation measures should be consistently enforced and re-enforced nation-wide.

• Paperless trade, including development of national and regional single windows, needs to be prioritized for trade facilitation.

• Physical inspections should be minimized whenever possible, in particular through adoption of risk management techniques by all organizations involved in the trade process.

Policy Recommendations from BPA (2)

• Healthy competition among transport, logistics and other trade-related service providers should be encouraged

• Reviewing payment systems and their efficiency may reveal new opportunities for improving trade facilitation performance.

• Industry-specific trade facilitation programmes should be considered, in particular for agricultural products.

• Harmonization of documentary requirements across countries should be actively pursued. – Bilateral and regional free trade agreements should

systematically address trade facilitation issues.