Trade Facilitation:Trade Facilitation:A Regional PerspectiveA Regional Perspective

Regional Policy Forum on Trade Facilitation in Times of CrisisRegional Policy Forum on Trade Facilitation in Times of Crisis

20-22 May 2009, Beijing, China20-22 May 2009, Beijing, China

Trade has been a main engine of Trade has been a main engine of growth in Asia-Pacificgrowth in Asia-Pacific

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Kyrgy

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Tajikis

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China

Korea

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Mal

aysia

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annual percentage change of real GDP annual percentage chang of exports

Comparison of trade growth and GDP growth 2000-2007Comparison of trade growth and GDP growth 2000-2007

Sources: WTO, 2008Sources: WTO, 2008

High Trade Dependence of ESCAP High Trade Dependence of ESCAP member countriesmember countries

Trade to GDP ratio in Asia compared to EU and US, 2005-2007

Central AsiaEast and Southeast Asia

South Asia Developed economies

Country Ratio Country Ratio Country Ratio Country Ratio

Azerbaijan 105 China 71.3 Bangladesh 45 EU (27) 26.4

Kazakhstan 93.3 Mongolia 127.1 Bhutan 97.3 US 27.2

Kyrgyzstan 126Korea (Rep. of)

85.7 India 44.7   

Tajikistan 139 Brunei 96.9 Maldives 184.2    

Uzbekistan 65.1 Cambodia 139.2 Nepal 46.9    

    Indonesia 60.4 Pakistan 41.6    

    Lao 73.5 Sri Lanka 70.7    

    Malaysia 209.6        

    Philippines 92.3        

    Singapore 443.7        

    Thailand 143.9        

    Vietnam 156        

Sources: WTO, 2008Sources: WTO, 2008

Asia-Pacific Region still the fastest growingAsia-Pacific Region still the fastest growing

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1995 1997 1999 2001 2003 2005 2007 2009c/

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Developing Asia-Pacific EU-15 US

Sources: ESCAP, 2009, dSources: ESCAP, 2009, data for 2008 are estimates and for 2009 are forecastsata for 2008 are estimates and for 2009 are forecasts

But export performance in many developing But export performance in many developing ESCAP economies has falteredESCAP economies has faltered

Sources: compiled by ESCAP based on CEIC databaseSources: compiled by ESCAP based on CEIC database

How can trade facilitation help?How can trade facilitation help?

• Trade facilitation: “Any measure, or set of measures, that aims to increase the cost-effectiveness of international

trade transactions”. http://www.gfptt.org/Entities/TopicProfile.aspx

Hidden trade costs can make up to 10% of value of goods traded

Tackling inefficiencies in trade transaction procedures and regulations can be key to sustaining trade competitiveness, particularly during downturn

How well are ESCAP members How well are ESCAP members doing in trade facilitation?doing in trade facilitation?

*Landlocked countries (Afghanistan, Armenia, Azerbaijan, Bhutan, Kazakhstan, Kyrgyz Republic, Lao PDR, Mongolia, Nepal, *Landlocked countries (Afghanistan, Armenia, Azerbaijan, Bhutan, Kazakhstan, Kyrgyz Republic, Lao PDR, Mongolia, Nepal, Tajikistan and Uzbekistan) are excluded from subregional averages.Tajikistan and Uzbekistan) are excluded from subregional averages.Source: Calculated based on data from Doing Business 2009, World BankSource: Calculated based on data from Doing Business 2009, World Bank

Time for ExportTime for ExportTime for export (days: 07/08)

0 10 20 30 40 50 60 70 80

Developed ESCAP Economies

OECD Member Countries

Singapore

Korea

Thailand

Philippines

India

Malaysia

China

Sri Lanka

Indonesia

Cambodia

Pakistan

Vietnam

Timor-Leste

Bangladesh

Nepal

Mongolia

Lao PDR

Afghanistan

Source: Calculated based on data from Doing Business 2009, World BankSource: Calculated based on data from Doing Business 2009, World Bank

Business Cost of CorruptionBusiness Cost of CorruptionBusiness cost of corruption (07/08): Scaling (1 - 7)

0 1 2 3 4 5 6 7

Bangladesh

Cambodia

Nepal

Timor-Leste

Vietnam

Philippines

Mongolia

Pakistan

China

Sri Lanka

India

Thailand

Malaysia

Korea

Indonesia

Singapore

Developed ESCAP Economies

OECD Member Countries

Note: Score based on question on whether illegal payments influence impose costs or otherwise negatively affect their companies (1 Note: Score based on question on whether illegal payments influence impose costs or otherwise negatively affect their companies (1 = yes, they have a significant negative impact, 7 = no, they have no impact)= yes, they have a significant negative impact, 7 = no, they have no impact)

Source: Global Competitiveness Report 2007-2008Source: Global Competitiveness Report 2007-2008

Port InfrastructurePort Infrastructure

Note: Score based on the questionnaire on Port facilities and inland waterways in a country are (1 = underdeveloped, 7 = as Note: Score based on the questionnaire on Port facilities and inland waterways in a country are (1 = underdeveloped, 7 = as developed as world’s best). For landlocked countries, this measures the ease of access to port facilities and inland waterwaysdeveloped as world’s best). For landlocked countries, this measures the ease of access to port facilities and inland waterways

Source: Global Competitiveness Report 2007-2008Source: Global Competitiveness Report 2007-2008

Port Infrastructure (07/08): Scaling (1 - 7)

0 1 2 3 4 5 6 7

Timor-Leste

Bangladesh

Mongolia

Indonesia

Philippines

Vietnam

Nepal

Cambodia

India

Pakistan

China

Sri Lanka

Thailand

Korea

Malaysia

Singapore

Developed ESCAP Economies

OECD Member Countries

Timeliness Timeliness (likelihood of on-schedule delivery)(likelihood of on-schedule delivery)

2.11-2.762.30-3.141.38-3.472.08-3.952.25-4.18

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0.50

1.00

1.50

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2.50

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3.50

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East and Northeast Asia** Southeast Asia*** South and Southwest Asia Pacific Island North and Central Asia

Developed ESCAP (4.16)

Developing ESCAP (2.93)

Notes: *Notes: *Developed ESCAPDeveloped ESCAP consists of Australia, Japan and New Zealand. ** consists of Australia, Japan and New Zealand. **East and Northeast AsiaEast and Northeast Asia average does not include average does not include Hong Kong, China. ***Hong Kong, China. ***Southeast AsiaSoutheast Asia average does not include Singapore. Source: Calculated based on data from the World Bank average does not include Singapore. Source: Calculated based on data from the World Bank

Logistic Performance Index (2007)Logistic Performance Index (2007)

How well are ESCAP members doing How well are ESCAP members doing in trade facilitation?in trade facilitation?

There are many dimensions/ways to facilitate trade and not all countries have chosen the same approach

Most countries have made progress and/or are engaged in trade facilitation reforms, but significant room for improvement remains

Although there are many regional trade facilitation initiatives, a lot of potential remain on facilitating intra-regional trade (at land borders)

How well are ESCAP members doing How well are ESCAP members doing in trade facilitation?in trade facilitation?

Trade facilitation performance varies greatly between and within Asian sub-regions, but also within countries

Domestic (behind-the-border) regulations and procedures often seem to be most problematic for traders

How well are ESCAP members doing How well are ESCAP members doing in trade facilitation?in trade facilitation?

Promoting trade facilitation: ESCAP Promoting trade facilitation: ESCAP approachapproach

Promote the use of global standards and innovative solutions collaboration with UN/CEFACT, WCO…

Create a community of knowledge and best practices through a pool of experienced experts both in-house and from countries that have successfully implemented trade facilitation reforms UNNExT

Conduct analytical work and develop implementation tools and methodologies for practitioners to ease the implementation of global standards Collaboration with WTO, ADB, and ARTNeT

Conclusion and RecommendationsConclusion and Recommendations

Asia-Pacific region is a highly trade dependent region

Trade facilitation performance varies widely across Asia-Pacific countries and subregions

Countries have made progress, but still room for improvement in many countries

Reducing trade transaction costs is important

to increase trade competitiveness

to enable participation by more firms in international trade

International Trade is a tool for development, not an end in itself

Governments should promote a more inclusive participation in trade

One way to do so is to cater more to the need of SMEs when facilitating trade

Trade facilitation needs and priorities differ across countries, and may also differ across industries and firms

Pragmatic and holistic approach required

Strong inter-agency and public-private sector cooperation required

Conclusion and RecommendationsConclusion and Recommendations

Thank Thank youyou