Trade facilitation strategies in CLMV countries

Tamanna ChaturvediConsultantIndian Institute of Foreign Trade

In how many ways can you think your trade can be hampered?

What is Trade facilitation?

The simplification and harmonization of international trade procedures

activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade

Why is Trade facilitation necessary?

Trade Facilitation issue considered

Gain from Trade Facilitation reform

Reduction of 1 day delivery times by developing countries by targeting delays associated with customs and cargo handling

400 billion

Improvement in logistical efficiency and reduction in transaction costs of trading

240 billion

Banking and insurance, customs, business information, transport and logistics

40 billion

Harmonization

Transparency

Sim

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Sta

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Trade Facilitation Principles

How do you do this?

1 Port infrastructure

2 Custom Environment

3 Regulatory Environment

4 E-business information

Examples o Regulatory activities in international trade

• Fiscal: Collection of customs duties, excise duties and other indirect taxes; payment mechanisms.

• Safety and security: Security and anti smuggling controls; dangerous goods; vehicle checks; immigration and visa formalities.

• Environment and health: Phytosanitary, veterinary and hygiene controls; health and safety measures; CITES controls

• Consumer protection: Product testing; labelling; conformity checks with marketing standards (e.g. fruit and vegetables)

• Trade policy: Administration of quota restrictions; export refunds

EU, Korea, Switzerland

Fees and charges related to international trade limited to actual cost of services rendered and NOT on the basis of value of consignment

China, Korea, Switzerland

Pre-arrival processing system: clearance of documentation before arrival of goods at custom station

EU, Mongolia

Authorized traders

•Reduce physical inspection•Rapid release time•Filing periodic declaration•Reduced documentary &data req.

Canada & Norway

Proper co-ordination between all authorities involved in border control at point of import and export control

Korea, Singapore & Thailand

Single window for submitting documents for exp/imp or transit one time only.This window will undertake onward distribution of data to all other relevant authorities where clearance is req from multiple govn agencies.

Country Proposals

Simplification and Harmonization

• Abolition of pre-shipment inspection system (EC/China)

• Abolition of requirement of compulsory use of custom brokers (EC/China/Mongolia/Switzerland)

• Abolition of the system of consularisation (US/Uganda)(presenting commercial invoice, manifest etc. from

counsel of importing country to exporting country as a req to permit import of goods by the importing country.)

• Adoption of same border procedure, same standard, certification, terminology, definition, sampling and test methods, uniform documentation req within RTA.(India)

• Destruction of rejected goods on voluntary basis

Transparency

• Full description of custom procedure, forms, documents for export and import on WTO member website.

• Notifications on three languages: English, French and Spanish

• Time interval between the publication and entry of rules and regulation should be reasonable.

• When goods are detained at the foreign port, clear intimation about the cause and action needs to be informed to the SME trader.

• Transparency on test procedure. Right to second confirmatory test, providing the list of accredited labs authorized to carry out such confirmatory tests.

• Setting up of enquiry points

Transparency handled in AFTA

• An ASEAN Trade Repository containing trade and customs laws and procedures of all Member States has been established and made accessible to the public through the internet..

• (i) tariff nomenclature; • (ii) MFN tariffs, preferential tariffs offered under this

Agreement and other Agreements of ASEAN with its Dialogue Partners;

• (iii) Rules of Origin; • (iv) non-tariff measures; • (v) national trade and customs laws and rules; • (vi) procedures and documentary requirements; • (vii) administrative rulings; • (viii) best practices in trade facilitation applied by each

Member State; and • (ix) list of authorised traders of Member States.

• Harmonisation, standardisation and recognition: CODEX standards

• Establishment of the ASEAN Single Window

• Enquiry Points: Each Member State shall designate one (1) or more enquiry points to address enquiries from interested persons concerning customs matters, and shall make available on the internet and/or in print form information concerning procedures for making such enquiries

Participant’s inputs

Each country group may inform about the Trade Facilitation measure taken by their country under ASEAN FTA

ASEAN Connectivity Master Plan

PhysicalInstituti

onalPeople to

people

Transport Facilitation

• ASEAN Framework Agreement

on the Facilitation of Goods in Transit (AFAFGIT),

• ASEAN Framework Agreement on Multimodal Transport (AFAMT),

• ASEAN Framework Agreement on the Facilitation of Inter-State Transport (AFAFIST),

• Roadmap for Integration of Air Travel Sector (RIATS),

• Roadmap Towards an Integrated and Competitive Maritime Transport in ASEAN (RICMT).

1

Initiatives taken by ASEAN Countries

• Member States concluded and signed both the ASEAN Multilateral Agreement on Air Services (MAAS) and the ASEAN Multilateral Agreement on the Full Liberalisation of Air Freight Services (MAFLAFS)

• ASEAN Multilateral Agreement on the Full Liberalisation of Passenger Air Services (MAFLPAS) in November 2010.

• The Roadmap for Integration of Logistics Services (RILS) was endorsed in August 2008 to strengthen ASEAN as a single market and production base, and enhance its competitiveness through trade and transport facilitation.

• RILS calls for liberalisation of cargo handling services, storage and warehousing services, freight transport agency services, courier services, packaging services, custom clearance services,international freight transportation excluding cabotage, international rail freight transport services,and international road freight transport services

• Land Transport: ASEAN Highway Network (AHN) identifies transit transport routes (TTRs) considered critical for facilitating goods in transit and have been prioritized for upgrading and construction.

• Rail link: Singapore Kunming Rail Link (SKRL): Singapore - Malaysia–Thailand–Cambodia–Viet Nam–China

(Kunming) and spur lines in Thailand–Myanmar and Thailand–Lao PDR

Currently there are 4,069 kms of missing links or links which need to be rehabilitated in six Member States including Cambodia, Lao PDR, Malaysia, Myanmar, Thailand and Viet Nam. Due consideration should be given to CLMV countries with regard to securing both financial and technical assistance from ASEAN

47 designated ports in Trans ASEAN transport Network

Developments at energy co-operation

• ASEAN Plan of Action for Energy Cooperation (APAEC) 1999-2004, APAEC 2004-2009 and APAEC 2010-2015.

• Conclusion of the Trans-ASEAN Gas Pipeline (TAGP). – TAGP aims to develop a regional gas grid by 2020, by

interconnecting existing and planned gas pipelines of Member States and enabling gas to be transported across borders.

– By 2013, there will be a total of 3,020 kilometres of pipelines in place, with the completion of the M9 pipeline linking Myanmar to Thailand.

– The region is also looking into establishing infrastructure for the transportation of liquefied natural gas (LNG), as countries such as Malaysia, Singapore and Thailand undertake construction of LNG terminals.

• Signing of the Memorandum of Understanding for the ASEAN Power Grid (APG), the establishment of APG Consultative Council and the establishment of ASCOPE Gas Centre (AGC).

Status of the Trans-ASEAN Gas Pipeline Project

Status of the Development of ASEAN Power Grid Network

Status of the Development of People to People Network

The ASEAN Committee for Culture and Information (COCI) was established in 1978 to promote effective cooperation in the fields of culture and information for the purpose of enhancing mutual understanding and solidarity among ASEAN peoples