1. Asian Trade Centre Using Trade Agreements to Promote A Domestic Reform Agenda: Trade Facilitation Dr. Deborah Elms April 22, 2016 Aid for Trade Seminar-Australian High Commission Singapore elms@asiantradecentre.org 1

2. Asian Trade Centre Trade Agreements = External “Stick” Domestic reform is hard – Entrenched interest groups often fight back – Momentum frequently lacking – Political will hard to muster – Collective action problem: benefits diffuse but costs concentrated Governments often use trade agreements as mechanism for pushing through reforms – Entry to World Trade Organization (WTO), joining EU, ASEAN commitments 2

3. Asian Trade Centre Trade Facilitation Trade often stuck at own border – Expensive, difficult and costly delays at border – Could be due to corruption – Can be from poor infrastructure – But can also be just plain bad systems, poor plans Costs of poor trade facilitation substantial – Burden on every single good, consumer, company both big and small – Can keep countries out of entire trade game 3

4. Asian Trade Centre Sri Lanka and Bali TFA WTO passed Bali TFA agreement in Dec ‘13 – Still stuck, waiting 107 countries to ratify But countries can start implementation on own—does not require all WTO to begin Workshops with Sri Lankan customs already Highlighted costs and benefits of faster processing at border – Aligns with internal customs officer incentives Build coalition to support Bali plans with business and customs for implementation – Key sectors understand benefits of speed/cost 4

5. Asian Trade Centre Vietnam and TPP Vietnam’s got into TPP for primary purpose of getting domestic reforms – Benefits from WTO entry had stalled Willing to take on hard commitments – Fast, steep reductions in tariffs, opening services, investment, government procurement, state owned enterprises, intellectual property protections, etc Trade facilitation includes many changes for customs that have never been implemented Exchange is rapid and substantial inward investment and new market access elsewhere 5

6. Asian Trade Centre Cambodia and TPP Cambodia not even in TPP, but will face competitive pressures from Vietnam esp textiles Means Cambodia will have to undertake domestic reforms like – New measures to eliminate expensive and time consuming barriers at border – Drop tariffs and open services/investment But officials will need to understand where pressures will come from in order to grasp challenges – “Own goals” not acceptable any more – Cannot count on LDC status either 6

7. Asian Trade Centre Harnessing Aid for Trade Assumption in many developing countries – Trade facilitation only benefits developed economies and big companies First order of business: Explaining how and why border delays strangle small domestic firms and consumers the most, including companies that will never export Helping governments implement existing agreements or use them better Help companies understand and use existing trade agreements 7

8. Asian Trade Centre The Asian Trade Centre is the premier regional thought leader, advocate and educator for trade Strategic, creative thinking for policy and regulatory challenges Solutions for vexing trade problems Practical advice and suggestions for improving bottom line performance Sensible input to craft modern trade agendas Deborah Elms Executive Director Asian Trade Centre Singapore www.asiantradecentre.org 8