1. Sustaining progress on trade facilitation : How Republic of Korea did it Sang-Hyeon Jo Korea Paperless Trade Office, KITA

2. Table of Contents  Background of Paperless Trade  Concept of Trade Facilitation  APEC’s Trade Facilitation Agenda  UNCITRAL model law for Paperless Trade  Paperless Trade in Korea  Needs for Paperless Trade  Establishment & Dissemination of Paperless Trading system  Legal framework & Expected benefits  Future tasks

3. Background of Paperless Trade

4. Concept of Trade Facilitation  Trade Facilitation  Impediments in general  Customs administration  Standards and technical regulations  Barriers to the mobility of business people - Business facilitation - Cutting red tape - Simplification of procedural and administrative impediments to trade

5.  Why is it difficult to implement?  Nevertheless, we have to go on. Why? Concept of Trade Facilitation 1. Essential but not attention grabbing 2. Highly technical 3. Painstaking to reform 4. Expensive to implement Trade Facilitation reflects the economy as a whole. Based on APEC research it will add 0.25% of real GDP to APEC member economies.

6. APEC’s Trade Facilitation Agenda  4 facilitation areas  Customs procedures  Standards and Technical regulations  Labor mobility  e-Commerce  Importance of e-Commerce for Trade Facilitation  Having great potential by developed IT infrastructure  Providing efficient electronic working environment  Modernizing customs administration  Reducing administration delays

7. UNCITRAL model law  UNCITRAL  United Nations Commission on International Trade Law  Organization for enacting commercial law on international trade and transactions  ICTs - related Laws  Model Law on Electronic Commerce(1996)  Model Law on Electronic Signatures(2001)  Convention on the Use of Electronic Communications in Electronic Contracts(2005) * ICTs - Information and Communications Technologies

8. UNCITRAL model law  Merits of the e-Trade Platform  Reducing trade-related costs  Simplifying administrative processes  Establishment of the e-Trade Platform  Principal agent  Formal agreement defining roles & responsibilities  End user agreements Governmental Organizations Private Businesses Joint project by Public-Private Partnership

9. UNCITRAL model law  Processing data : mechanism must be commonly mutually recognized  Identification  Authentication  Authorization  Data protection : compliance with all relevant privacy and personal data protection laws  Access to data  Integrity of data  Accuracy of data

10. UNCITRAL model law  Liability issues  Proper logging mechanisms - preventing reuse of wrong data - clarifying mistakes and forgery  Electronic signature - security mechanisms  Electronic documents - functional equivalence of electronic documents to paper documents - acceptance of their evidentiary value in court

11. Paperless Trade in Korea

12. export import Needs for Paperless Trade

13. Establishment & Dissemination of Paperless Trading System  Milestone of Paperless Trade in Korea  Trade Automation Act(1989)  For national competitiveness by cutting costs through automated transaction system  Establishment of KTNET(1991)  A 100% investment holding subsidiary of KITA  Implementing IT based projects between public and private sector  the sole designated system operator for uTradeHub  a service provider of the national paperless trade system

14.  Promotion by public opinion  Consensus on online paperless trading system for easy access for work efficiency  Project for building a paperless trading system  Adoption as one of the e-Government projects  Aim : transferring VAN EDI-based trade automation system to Internet-based trading system  National e-Trade Committee (established in 2003) Establishment & Dissemination of Paperless Trading System - Chair person : 2003 ~ 2007 the prime minister 2008 ~ present the minister of MKE - The Supervisory committee of the national paperless trade system project

15. Paperless Trade Governance in Korea Establishment & Dissemination of Paperless Trading System

16.  Korea Paperless Trade Office  Established in 2005  The secretariat and PMO(Project Management Office) of the National Electronic Trade Committee  consolidation between public and private sectors  KITA (established in 1946)  Korea International Trade Association  Korea's foremost trade promotion organization with 65,000 member firms  Supporting Korea's business community  WTCS(World Trade Center Seoul), an access to one-stop business

17. Concept of uTradeHub Establishment & Dissemination of Paperless Trading System

18. Course of Actions Phase2 (’06 ) Build a trade portal for traders  License/Certification/Clearance support system Standardize documents  ebXML based document standardization Phase1 (‘04-’05 (‘04-’05) Build Core Infrastructure of e-Trade Platform  u-Trade document circulation system  e-L/C service system Establish e-Trade Platform, uTradeHub for all the trade related communities  Link systems of banks, logistics and many other related organizationsPhase3 ( ’07~ ) Establishment & Dissemination of Paperless Trading System

19. Government Related Parties Trading Partner Trusted Third Party Policy & Law Funding & Execution Roadmap Project Leadership & Ownership Integration Standardization Body Process Innovation Paperless Trading Enterprise IT Systems Service Development Platform Operation Global Network Establishment & Dissemination of Paperless Trading System Public – Private Partnership

20. Digital Signature Act Trade Automation Act (1991) e-Trade Facilitation Act (2005) Commercial Law (2007) Foreign Trade Act Electronic Transactions Act Legal framework

21.  Foreign trade Act(1986) - revised in 2009  e-Trade Facilitation Act(1991) - revised in 2009  Digital Signature Act(1999) - revised in 2008  Electronic Transactions Act(1999) - revised in 2009  Commercial Law on electronic Bill of Lading(2008)

22. Productivity Increase Productivity Increase Reduction of extra fees Reduction of extra fees Reduction of redundant investment in the IT sector (318million USD) Reduction of labor costs (263.3million USD) Reduction of printing costs (19.1million USD) Reduction of circulation and storage costs(271.9million USD) Reduction of warehousing costs (1.36billion USD) Reduction of inventory management costs (750million USD) Productivity increase [554.3million USD] + Reduction of extra fees [2.11billion USD] + Reduction of redundant investment in the IT sector [318million USD] Productivity increase [554.3million USD] + Reduction of extra fees [2.11billion USD] + Reduction of redundant investment in the IT sector [318million USD] Expected Economic Benefits

23. LG ELECTRONICS Reduced Labor costs, documents handling charges, etc. by 30mil USD for a year SAMSUNG ELECTRONICS. Reduced labor for the customs clearance department by 50% : 89 persons → 43 persons Shortening of working hours and process simplification : 25days → 5days, 53steps → 17steps INTERFLEX Reduction of extra fees for trading : 29,000 USD → 9,160 USD Shortening of the time required : 12hours → 30mins DAEWOO ELECTRONICS. Shortening of handling hours for shipping requests : 22mins per → 6mins per Cost saving cases in Paperless Trade Expected Economic Benefits

24. Future tasks

25. 1.By a commitment of government for effective e- Commerce infrastructure 2.By simultaneous reforms in a number of sectors 3.By systems integration based on Public-Private Partnership 4.By entire trade transaction cycle ; not standard harmonization or customs modernization alone 5.By helping developing countries for entire systems integration How to find unexplored synergies in Paperless Trade Future Tasks

26. Why is Joint Project essential for e-Trade? - Consideration linking e-Trade Platform of each country - International support is necessary based on public and private partnership of each country - we need to define where we can initiate joint projects Joint projects Cooperation among countries How do we build a partnership in borderless trade? - Information sharing efforts about legal frame and IT infrastructure - Constant progress reports of each project Future Tasks

27. www.utradehub.or.kr