Trade and Transport Facilitation Monitoring Mechanisms (TTFMM):

Needs, Functions and Experiences

Tengfei WangEconomic Affairs Officer, Trade Facilitation Unit

Trade, Investment and Innovation DivisionUnited Nations Economic and Social Commission for Asia and the Pacific

wangt@un.org

National workshop on TTFMM, Suva, Fiji, 14 July 2016

Outline of presentation1. Why is there a need to establish national TTFMM?

– Review of international cross-country indicators– Review of the relevant work which has been carried out

2. Key features and functions of TTFMM– Core functions– Key outputs– Integrated methodology: Business Process Analysis Plus (BPA+)

3. Key factors for maintaining sustainability of TTFMM– Institutional Arrangement– National Human Resource and Capacity-building

4. Experiences of conducting TTFMM baseline studies in Asia5. Conclusion

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Review of international cross-country indicators:

3

Trade Facilitation Performance and Monitoring Workshop, Wuhan, China, 22 October 2015

3

International cross-country indicators/databases

• Examples include:– ESCAP-World Bank Trade Cost database– World Bank Logistics Performance Index– World Bank Doing Business / Trading Across

Borders Indicators – UNCTAD Liner Shipping Connectivity Index– OECD Trade Facilitation Indicators– United Nations Regional Commissions Trade

Facilitation and Paperless Trade Implementation Survey database

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Logistics performance Index and Trading Across borders

LPI

Customs

Infrastructure

International shipmentsLogistics quality and competence

Tracking and tracing

Timeliness

1.00

2.00

3.00

4.00

5.00

Source: World Bank, LPI, 2016

Global ranking: 136 out of 160 economies

Global ranking: 73 out of 189 economies

5

Trade Facilitation and Paperless Trade Implementation in Asia-Pacific: 2015 Survey Highlights

Implementation very heterogeneous across the region

6Source: unnext.unescap.org/UNTFSurvey2015.asp

International cross-country indicators/databases:strengths and weaknesses

• Strengths: – relevant and essential to assess trade facilitation

at national level • Weaknesses:

– Not detailed enough to develop or update national trade facilitation action plans

– Lack of country ownership

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National experiences: Time Release Study

Australia Bhutan Brunei China Fiji India Indonesia Japan Korea, rep.

of

Côte d'Ivoire Ethiopia Kenya Mozambique Niger Rwanda Tanzania Uganda Zambia

Jamaica Jordan Peru Poland Sweden Uzbekistan

Asia Pacific Africa OtherLao PDR Malaysia Mongolia New Zealand PNG Philippines Singapore Thailand Viet Nam

International EAC

Source: Presentation by rep. from WCO at the Trade Facilitation Performance and Monitoring Workshop, Wuhan, China, 22 October 2015

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National experiences: Business Process Analysis of trade procedures

9

AzerbaijanBangladeshBhutanCambodiaChinaIndiaKorea, Rep. of

EthiopiaKenyaRwandaTanzaniaUgandaZambia

GreeceAsia Pacific Africa Other

Lao PDR MalaysiaMyanmar MongoliaKazakhstanKyrgyzstanNepalThailand

9

Key weaknesses of national trade and transport facilitation assessments so far…

• Often ad–hoc or one off• Sometimes driven by international

organizations or development partners• Often no adequate follow up===========

10

Need for an integrated and sustainable mechanism: (1) To provide adequate data & information to supportdecision making and to monitor implementation and impact of these decisions on trade facilitation measures(2) To reduce unnecessary duplication of efforts & ensure recommendations are implemented

10

Outline of presentation1. Why is there a need to establish national TTFMM?

– Review of international cross-country indicators– Review of the relevant work which has been carried out

2. Key features and functions of TTFMM– Core functions– Key outputs– Integrated methodology: Business Process Analysis Plus (BPA+)

3. Key factors for maintaining sustainability of TTFMM– Institutional Arrangement– National Human Resource and Capacity-building

4. Experiences of conducting TTFMM baseline studies in Asia5. Conclusion

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TTFMM: Core Functions

Measure, monitor and assess progress in trade facilitation

Trade facilitation reform Implementation

Baseline trade and transport facilitation assessment study

Formulate, update and prioritize recommendations for advancing trade facilitation

12

TTFMM: Key Outputs

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• TTFMM Database, including:– Description, activity diagram and related rules/regulations

for each trade & transport procedure for selected products along selected corridors

– Time, Cost, No. of documents for each process/procedure• Set of Indicators (dashboard)

– Include Time, Cost, No. of documents for each process/procedure

– Average speed along the corridor– Average border crossing time

• An analytical report– Presenting relevant summary information from the

database to relevant stakeholders (including in-depth analysis and recommendations)

Different tiers of data for targeted stakeholders

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Policy makers

Analysts, experts and

specialists to support decision making

Integrated methodology: Business Process Analysis Plus (BPA+)

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• Underpinning TTFMM is a methodology called Business Process Analysis Plus (BPA+)

• Business Process Analysis Plus (BPA+) is built on the UNNExT Business Process Analysis, supplemented by Time Release Study (TRS) or Time-Cost-Distance (TCD)/ Corridor Performance Measurement and Monitoring (CPMM) methods.

• Depending on each country’s specific need and context, other trade facilitation assessment and monitoring methods may also be integrated into BPA+.

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Broad trade facilitation definition encompasses the full trade transaction scope

In its broader sense, Trade Facilitation involves all operations and all

stakeholders from buyer to seller

Source: UNECE

BPA+: An Integrated Methodology

Trade-related procedures before cargo movement

Cargo origin

Border crossing point

Border crossing point

Cargo destination

Trade-related procedures after cargo arrival

TRS TRS

TCD/CPMM

BPA of Trade Procedures

Business Process Analysis (BPA) for diagnosis of TF bottlenecks along entire supply chainTime-Cost Distance Method (TCD) & Time Release Study (TRS)to Improve/verify BPA time and cost estimates

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Shipping company

Shipping agentPort Authority,

etc.

Customs,

Bank,Custom

sbroker

Port AuthorityContainer

YardWarehouse,Forwarder,

etc.

Importer,Customs bro-

kerContainer

YardOGAs, etc.

Time Release Study (TRS): Measuring ‘time’ for border crossing procedures (credit: WCO)

Arrival of cargo

Unloading/Storage

Submission ofDeclaration

Customs release permission

Removal of cargo18

Transport to border

Wait at border crossing/change transport mode

Transport to sea port

Wait at sea port

Sea transport

500 km 1000 km 2000 km1500 km

Day 4

Tim

e

Day 3

Day 2

Day 1

$400

Cost

$300

$200

$100

Distance

Point of Origin

Destination

TCD/CPMM: record ‘time’ and ‘cost’ of physical movement of cargoes

19Credit: Transport Division, ESCAP

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Why is it not sufficient to just look at TRS and TCD/CPMM results?

1 2 3 4 5 6 7 8 9 10 11

Day

Process

30

20

10

0

5

25

15

35

14 days

3 days

2 days

1 day

3 days

4 days

1 day

1

2

4

3

56 7 8

9

10

11

1 day

1 day

1. Buy - Conclude sales contract and trade terms2. Have product sampled and technically examined 3. Arrange transport4. Prepare export permit 5. Apply for cargo insurance6. Prepare and submit customs declaration 7. Stuff container and transfer it to port of departure (covered by TCD)8. Clear goods through customs (covered by TRS and TCD)9. Handle container at terminal and stow it on vessel (covered by TCD)10. Prepare documents required by importer as listed in L/C11. Pay - Claim payment of goods

Assuming 50% reduction for each procedure of 7-90.5 day /30 days = 1.7% (TRS)1.5 days/30 days = 5% (TRS and TCD combined)

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Outline of presentation1. Why is there a need to establish national TTFMM?

– Review of international cross-country indicators– Review of the relevant work which has been carried out

2. Key features and functions of TTFMM– Core functions– Key outputs– Integrated methodology: Business Process Analysis Plus (BPA+)

3. Key factors for maintaining sustainability of TTFMM– Institutional Arrangement– National Human Resource and Capacity-building

4. Experiences of conducting TTFMM baseline studies in Asia5. Conclusion

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Institutional arrangement: an exampleSu

ppor

t fro

m In

tern

ation

al o

rgan

izatio

ns NTFC

TTFMM implementation team leader (A senior member of NTFC or a person appointed by NTFC)

TTFMM implementation coordinator (Secretariat of NTFC)

BPA data collection & TTFMM analysis, database and report (a research institute under the Min. of Trade or Customs)

TRS data collection (Customs officers)

TCD data collection (freight forwarders and drivers)

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National Human Resource and Capacity-building

• National human capacity needs to be developed and maintained in the process of establishing TTFMM

• Some countries, especially least developed countries and landlocked developing countries, may face difficulties in putting TTFMM in place on their own and may need to be provided technical and financial assistance at the beginning

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Outline of presentation1. Why is there a need to establish national TTFMM?

– Review of international cross-country indicators– Review of the relevant work which has been carried out

2. Key features and functions of TTFMM– Core functions– Key outputs– Integrated methodology: Business Process Analysis Plus (BPA+)

3. Key factors for maintaining sustainability of TTFMM– Institutional Arrangement– National Human Resource and Capacity-building

4. Experiences of conducting TTFMM baseline studies in Asia5. Conclusion

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TTFMM baseline studies in South Asia

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Inception Workshop in Bangkok 2013 National workshop in Phuentsholing Bhutan 2014

National Workshop in Dhulikhel Nepal 2014 National Workshop in Dhaka Bangladesh 2014

Scope of BPA in TTFMM: Products

Import

Processes

Export Processes

  Bhutan Bangladesh NepalThird

country

Bhutan

Kitchen and table wares of plastics

Motor vehicles

BangladeshCardamo

m LentilNepal Fabrics Wools

Third country

Ferro silicon

Woolen

carpet

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Scope of BPA in TTFMM: Corridors

Corridor Countries Linked

Distance,

Transit

Products

Corridor 1 Kathmandu - Kakarvitta-Panitanki-Fulbari-Banglabandha - Dhaka

Nepal – India -

Bangladesh

54 km Nep-Ban: LentilBan-Nep: Fabrics

Corridor 2 Thimpu - Phuentsholing-Jaigaon-Hasimara-Changrabandha-Burimari - Dhaka

Bhutan – India -

Bangladesh

115 km Ban-Bhu: kitchen and table wares of plasticsBhu-Ban: cardamom

Corridor 4 - Kolkata – Raxaul – Birgunj - Kathmandu

Nepal - India

1047 km Import of woolsExport of woolen carpet

Corridor 5 Kolkata – Jaigaon – Phuentsholing - Thimpu

Bhutan - India

760 km Export of ferro silicon Import of motor vehicles 27

TTFMM baseline studies in Bangladesh, Bhutan and Nepal

• Notwithstanding various sorts of challenges for the baseline studies, the success story so far is that all three LDCs can carry out the studies with their own national experts.

• However, support from development partners and int’l organizations is crucial to build national capacity at the beginning stage

Data collection in Kolkata in March 2016

Project team met in Bangkok in Jan. 2016

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Concluding remarks• It is important to establish national trade and

transport facilitation mechanism to support policy making

• A combination of BPA, TRS and TCD/CPMM would provide insightful observations and conclusions on trade and transport facilitation improvement

• Political will and support is important to sustain the success of TTFMM.

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Thank youhttp://www.unescap.org/

http://www.unescap.org/our-work/trade-investment-innovation

unnext.unescap.org

Email: wangt@un.org

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