Symposium Symposium on Practical Experience of on Practical Experience of Implementing Trade Facilitation Reforms, Implementing Trade Facilitation Reforms,

Including Their Costs and BenefitsIncluding Their Costs and Benefits

November 8-9, 2011November 8-9, 2011

World Bank Gap Assessment Study

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Gerard McLindenCustoms and Border Management Practice Group

International Trade DepartmentThe World Bank

Introduction Introduction Assessment based on comparing the

systems and procedures currently employed in three member countries against the measures outlined in TN/TF/W/165/Rev.11

Drew on WB experience in developing Customs and Border Management reform programs (120 projects over last 20 years)

Builds on previous study undertaken by WB, WCO and IMF (November 2006)

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Purpose Purpose The WTO Trade Facilitation Gap Assessment was

designed to:assess the gap between existing systems and

procedures in place and the measures likely to be included in a new WTO Trade Facilitation Agreement;

identify any technical assistance and capacity building support needed to close the gap and ensure sustained and effective implementation and long term operation; and

prepare approximate cost estimates and indicative implementation timelines.

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Assumptions and Assumptions and QualificationsQualifications

Focus beyond simple compliance to effective implementation to deliver trade facilitation benefits for governments and traders

Short missions (8 - 10 days in each country)Covered needs of Customs and other border

management agenciesTimetables based on probable rather than

possible implementation timelines

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Assumptions and Assumptions and QualificationsQualifications

Running costs not included as evidence supports positive resource offsets from TF measures

Cost calculations based on WB project design and implementation experience

Single Window◦ Cost estimates based on electronic SW◦ Connectivity with existing Customs system not

total replacement of ICT infrastructure ◦ B2G not B2B

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Summary of FindingsSummary of Findings

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Country Estimated Cost

Implementation Timeline

Compliant Partially Compliant

Not Compliant

Country A $5.1m - $ 7.95m

1 – 5 years 16 15 5

Country B $ 2.4 m 1 – 3 years 14 11 11

Country C $7.5m – $10.5 m

1 – 5 years 13 20 3

General ObservationsGeneral ObservationsNo country is starting from scratch – all have

reform and modernization plans in place and have made genuine progress

Customs ahead of other government agencies in understanding TF agenda

Much donor support already provided – but mainly to Customs

High level of support for measures at the national level by public and private sector stakeholders …. but ….

All measures in keeping with existing global standards and good practice approaches

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General ObservationsGeneral ObservationsSignificant TA and capacity building support

required in all countries …. but its not the only critical implementation challenge

Sequencing of reform implementation important

Implementation process needs to be managed holistically as many measures are interdependent

Donor support needs to be carefully coordinated based on an agreed comprehensive implementation plan …. Not piecemeal cherry picking of individual measures

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One example of the need for One example of the need for careful sequencing due to careful sequencing due to interdependencies interdependencies

In order to successfully implement Art 10.1 (Review of formalities and documentation requirements) and 10.2 (Reduction and rationalization of these requirements) it is first necessary to identify and collate all requirements. This also needs to be undertaken to achieve Arts 1.1, 1.2 and 1.3 (Publication and Availability of Information) and would greatly assist effective implementation of Arts 2.1, 2.2 and 2.3 (Prior publication and consultation).

In order to implement Article 10.4 (Single Window) Arts 10.1 and 10.2 need to be completed first. 9

One example of sequencing, One example of sequencing, logical task families and logical task families and interdependencies interdependencies

All require strong and effective inter-agency coordination such as outlined in Art 9 (Border Agency Cooperation).

That in turn requires a sound and fully effective coordination and governance mechanism as proposed under Art 14 (National Committee on Trade Facilitation).

Logically, establishing the National Committee on Trade Facilitation would be a sensible first step

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•Manifest•Bills of Lading•Sea/AW Bill•Container Plans

•Invoice•Packing List•Declaration•Delivery Note

Storage

Air, Sea, LandInternational

Transport Customs Port

Pay TaxesClear CustomsRelease Goods

Ship’sDocuments

CertificatesOf Origin

Chamber ofCommerce

ForeignChambersCommerce

OverseasEmbassies

Post/Courier

“LegalInvoices”

DOMESTICSUPPLY CHAIN

•Raw Materials•Packaging•Transport•Storage

•Quotations•P.O.s•Delivery Notes•Con. Notes•Invoices•Statements

•Payments•Remittance Advice

IMPORTER

MANUFACTURER

EXPORTERFOREIGNBUYER

•Licenses•Certificates•Government Approvals

•Certificates Of Origin•Form A•EUR.1

GovernmentDepartments& PIAs

FinanceMinistry

Port

•Invoice•Packing List•Declaration•Delivery Note

Pay TaxesClear CustomsRelease to Port

Port Processes•Internal Transport•Storage•Container Handling•Loading

Port Customs

ReceiveGoods

Bank

•P.O.•Contract Terms•Delivery Instructions•L.O.C.

PayBank

•L.O.C.•Packing List•Invoice LOC Courier

LOC Approval

ShippingDocuments

Book/Confirm Transport

•Licenses•Certificates•Government Approvals

Customs

A simplified map of the international trade process A simplified map of the international trade process

Necessary Preconditions for a Necessary Preconditions for a National Committee on Trade National Committee on Trade FacilitationFacilitation• Clear and unambiguous commitment

translated into a concrete mandate • Agreed leadership, participation and

governance model• Clearly identified:

o Roles and responsibilitieso Obligationso Performance measures and accountabilitieso Budget/resourceso Dispute resolution mechanism

• Realistic future strategic vision – owned by all and translated into a comprehensive implementation plan 12

What next ?What next ?• WB and partners can undertake additional

gap assessments but this exercise makes more sense when undertaken as part of the development of a comprehensive implementation strategy

• Not a minor undertaking – WB projects take two years to design and develop

• Multiple counterpart nature of proposed measures adds enormously to complexity

• A coordinated effort from the development community will be essential to ensure technical assistance and capacity building resources are used most effectively

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A useful resourceA useful resourcefor negotiatorsfor negotiators

gmclinden@worldbank.orggmclinden@worldbank.org

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