Trade Facilitation: A Regional Perspective Regional Policy Forum on Trade Facilitation in Times of Crisis May 2009, Beijing, China

Trade has been a main engine of growth in Asia-Pacific Comparison of trade growth and GDP growth Sources: WTO, 2008

High Trade Dependence of ESCAP member countries Trade to GDP ratio in Asia compared to EU and US, Central Asia East and Southeast Asia South AsiaDeveloped economies CountryRatioCountryRatioCountryRatioCountryRatio Azerbaijan105China71.3Bangladesh45EU (27)26.4 Kazakhstan93.3Mongolia127.1Bhutan97.3US27.2 Kyrgyzstan126 Korea (Rep. of) 85.7India44.7 Tajikistan139Brunei96.9Maldives184.2 Uzbekistan65.1Cambodia139.2Nepal46.9 Indonesia60.4Pakistan41.6 Lao73.5Sri Lanka70.7 Malaysia209.6 Philippines92.3 Singapore443.7 Thailand143.9 Vietnam156 Sources: WTO, 2008

Asia-Pacific Region still the fastest growing Sources: ESCAP, 2009, data for 2008 are estimates and for 2009 are forecasts

But export performance in many developing ESCAP economies has faltered Sources: compiled by ESCAP based on CEIC database

How can trade facilitation help? Trade facilitation: “Any measure, or set of measures, that aims to increase the cost-effectiveness of international trade transactions”.  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 doing in trade facilitation? *Landlocked countries (Afghanistan, Armenia, Azerbaijan, Bhutan, Kazakhstan, Kyrgyz Republic, Lao PDR, Mongolia, Nepal, Tajikistan and Uzbekistan) are excluded from subregional averages. Source: Calculated based on data from Doing Business 2009, World Bank

Time for Export Source: Calculated based on data from Doing Business 2009, World Bank

Business Cost of Corruption 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) Source: Global Competitiveness Report

Port Infrastructure 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 waterways Source: Global Competitiveness Report

Timeliness (likelihood of on-schedule delivery) Notes: *Developed ESCAP consists of Australia, Japan and New Zealand. **East and Northeast Asia average does not include Hong Kong, China. ***Southeast Asia average does not include Singapore. Source: Calculated based on data from the World Bank Logistic Performance Index (2007)

How well are ESCAP members doing 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 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 in trade facilitation?

Promoting trade facilitation: ESCAP approach  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 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 Recommendations

Thank you