UNECE Integrated Approach to Trade Facilitation Tom Butterly Deputy Chief Global Trade Solutions Branch UNECE Capacity-Building Workshop on the WTO Trade Facilitation Negotiations 12-13 June 2006, Chisinau, Republic of Moldova

Agenda UNECE Integrated Model of Trade Facilitation Best Practice Examples - UN/CEFACT Standards, Recommendations and Tools International Trade Single Window Capacity Building

UNECE Integrated Model of Trade Facilitation UNECE’s objective in international trade: to facilitate and strengthen the integration of member States, and especially countries in transition, into the European and global economy. Trade Facilitation is a key tool of UNECE to achieve this objective

Trade Facilitation “The simplification, standardization and harmonization of procedures and associated information flows required to move goods from seller to buyer and to make payment “ Facilitate - to make easy or easier

INTERNATIONAL TRADE TRANSACTION PROCESS BUY SHIP PAY Prepare For Export Prepare For Import Export Transport Import INVOLVES Commercial Procedures Establish Contract Order Goods Advise On Delivery Request Payment Transport Procedures Establish Transport Contract Collect,Transport and Deliver Goods Provide Waybills, Goods Receipts Status reports Regulatory Procudures Obtain Import/Export Licences etc Provide Customs Declarations Provide Cargo Declaration Apply Trade Security Procedures Clear Goods for Export/Import Financial Procedures Provide Credit Rating Provide Insurance Provide Credit Execute Payment Issue Statements

The UN/CEFACT Vision Total Trade Transaction – Integrated supply-chain Competitiveness – trade efficiency Trade facilitation ASTRAL TUNISIA, Painting industry had either to adapt to requirement made by EU customer or disappear. They decided to manage the change process by doing a business and modelling approach to improve inventory and delivery times. TF allows to reduce frictions in international trade

Economic efficiency WHY is TF a tool for development? Enquiry Validation Credit Arrangements Refund claim Long Lead items Export Licence Short Lead Components Delivery to port Documentation Dehire GKN pallets Delivery to customers warehouse Unload and store Retail sale Payment by customer Payment of transport and FOB charges £ Added value and cost Omagh to Algeria. 1 Order – 360 net tonnes, 21 weeks Invoice and order administration Unload, re- pack Delivery to customs warehouse Exit clearance from community Refund payment and administration 12 13 15 16 19 21 Weeks (approx) Main vessel loading Sea Crossing Main vessel off-loading Artwork Order receipt and administration Request Health Certificates, Licences Pre-shipment Inspection Customs formalities (Inland) Manufacture Load and despatch Proof of export Inwards clearance WHY is TF a tool for development? Trade facilitation allows to increase added value to the products and reduce cost – the green curve

Why focus on Trade Facilitation ? Economic Benefits - shift in focus from technical to trade/economic policy perspective Greater demands from business for predictability and speed Information requirements Investment Link Trade Facilitation at the WTO

Economic Benefits Estimates vary from 1-15% of total trade transaction costs Even if only 1%, OECD estimates total gains to world economy of US$40, billion APEC estimates gains of US$46 billion from trade facilitation measures - adopted TF as key policy target.

Economic Benefits Benefits higher for developing countries and for SMEs Greater than the potential value of increased tariff reductions under future multilateral trade negotiations. Inefficient or unnecessary process and controls add no value whatsoever

UNECE Study on TF TF plays a crucial role in deriving benefits from overall trade liberalisation policy Even in non-liberalised economies significant benefits cold be gained The introduction of trade liberalisation measures without parallel trade facilitation initiative might fail to realise their full economic potential.

Strategic Approach to Realising the Benefits of Trade Facilitation Undertake detailed needs analysis and set priorities at both the national and regional level Involve the business community from the outset Cultivate the necessary political will Develop national and regional implementation strategies, with trade facilitation as a key trade and economic development instrument Total trade transaction approach Use existing trade facilitation standards, tools and instruments