trade costs and trade facilitation implementation in asia ......3 what is the trade cost situation...

Trade costs and trade facilitation implementation in Asia- Pacific:

Implications for the region

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- Session 1: Overcoming high trade costs of Asia-Pacific developing economies: - Prioritizing Trade Facilitation Measures -

Yann Duval,Chief, Trade Facilitation Unit,

Trade and Investment Division, UNESCAP

The 7th Asia-Pacific Trade Facilitation Forum

Outline of presentation

• What is the trade cost situation in Asia-Pacific?

• What is the state of implementation of trade facilitation in Asia-Pacific?

• How can trade costs be further reduced?

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What is the trade cost situation in Asia-Pacific?

Source: ESCAP-World Bank International Trade Cost Database (September, 2015) – avg. 2008-2013Note: Numbers in parenthesis show % change in trade costs since 2002-2007

• Trade costs often much higher in developing than developed economies• Some progress in sub-regional integration, but often very high trade costs between

Asia-Pacific sub-regions• Trade costs in developing countries falling slower than in developed economies

Intra- and Extra- Regional Trade Costs in Asia-Pacific (excluding tariff costs)

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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 in Asia-Pacific

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Strong relationship between TRADE FACILITATION and TRADE COSTS

What is the state of implementation of trade facilitation in Asia-Pacific?

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TF implementation very heterogeneous across the region

unnext.unescap.org/UNTFSurvey2015.asp


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Transparency measures most implemented;Cross-border paperless trade measures least implemented


TF implementation high in some low-income countries



Towards “Next Generation” TF in Asia-Pacific

Implementation of TF as a step-by-step process…

WTO TFA Full Compliance (Minimum implementation scoreassociated with)


How can trade costs be further reduced?

• Fully implement the WTO TFA commitments… • but not only! • There is no one-size fits all formula

– Take an integrated “whole of supply chain” approach• Commercial + Transport + Regulatory + Payment

procedures • Procedures + infrastructure + services

– Prioritize TF measures based on evidence• National Trade & Transport Facilitation Monitoring

Mechanism

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• Consult & work closely with the private sector– Important to consult SMEs– Different sectors have different needs (e.g., agrifood trade)

• Apply modern Information and Communication Technologies to trade procedures… and the entire trade process– Potential of cross-border e-commerce

• Strengthen regional cooperation on trade facilitation– In particular towards paperless trade and transit

• Be ambitious!– ASEAN Single Window (ASW)– Regional Agreement on the Facilitation of Cross-Border

Paperless Trade11

How can trade costs be further reduced?

THANK YOU!!!

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www.unescap.org/our-work/trade-investment/trade-facilitationunnext.unescap.org

ANNEX

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Most and least implemented TF measures in Asia-PacificMost implemented Least implemented

Transparency

1. Stakeholder consultation on new draft regulations (prior to their implementation)2. Publication of existing import-export regulations on the internet

1. Advance ruling (on tariff classification)2. Advance publication/notification of new regulation before their implementation

Formalities1. Risk management2. Pre-arrival processing

1. Establishment and publication of average release times2. Trade facilitation measures for authorized operators

Institutional arrangement and coopera

tion

1. Cooperation between agencies on the ground at the national level2. Establishment of National Trade Facilitation Committee

1. Government agencies delegating controls to Customs authorities

Paperless trade1. Internet connection available to Customs and other trade control agencies at border-crossings2. Electronic/automated Customs System

1. Electronic Application and Issuance of Preferential Certificate of Origin2. Electronic Application for Customs Refunds

Cross-border paperless trade

1. Laws and regulations for electronic transactions2. Recognised certification authority

1. Banks and insurers retrieving letters of credit electronically without lodging paper-based documents2. Electronic exchange of Sanitary & Phyto-Sanitary Certificate

Transit facilitation

- Cooperation between agencies of countries involved in transit- Customs authorities limit the physical inspections

1. Supporting pre-arrival processing for transit facilitation

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

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

Benefits of Cross-Border Paperless Trade

Annual regional export gains : $36 bn (for partial implementation) to $257 bn (full implementation)

Export time reduction: 24% to 44%Export cost reduction: 17% to 31%Total direct cost savings across all trade: $1bn to $7bn annually

Source: http://www.unescap.org/resources/estimating-benefits-cross-border-paperless-trade

Trade Process Analysis Database (TPAD)

• A database of business process analyses of country and product-specific import and export procedures conducted in Asia-Pacific developing countries.

• Over 50 import and export process cases included, based on studies conducted since 2009 by international organizations such as ESCAP, ECE, ADB and their member states.

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http://www.tpad.unnext.org/

Overall Implementation of trade facilitation and paperless trade measures in Asia-Pacific

Implementation of WTO TFA-related measures in Asia-Pacific: 2015 (% of countries)

Average trade costs of ESCAP sub-regions with key developed countries*

20Source: ESCAP-World Bank Trade Cost Database, updated June 2015. Available from http://artnet.unescap.org/databases.html#first *Germany, Japan and USA

trade costs and trade facilitation implementation in asia ......3 what is the trade cost situation...

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