1. 1 Facilitating Trade: An Asia-Pacific Perspective Yann Duval Chief, Trade Facilitation, Trade and Investment Division, United Nations Economic and Social Commission for Asia and the Pacific Expert Group Meeting on Trade & Transport Facilitation, Dubai, 10-11 April 2013

2. Introduction What have Asian countries done to facilitate trade? I III IV II Table of Contents Trade costs in Asia-Pacific and key policy drivers 2 Way forward in Asia-Pacific and Lessons learned VI

3. Trade Facilitation (TF)? - Definition “ the simplification and harmonization of international trade procedures ” “ increasing the cost effectiveness of international trade transactions ”

4. Trade Facilitation?  Definition

5. International trade costs in developing regions* 5 Asia-Pacific region as a whole doing relatively well... *based on ESCAP-World Bank International Trade Cost Database

6. Intra- and Inter-regional trade costs of Asia and the Pacific subregions* RegionASEAN-4East Asia-3 North and Central Asia SAARC-4AUS-NZLEU-3USA ASEAN-475.40%77.58%381.31%125.79%86.09%110.22%84.35% (3.08%)(7.71%)(7.94%)(0.74%)(-11.54%)(6.58%)(12.36%) East Asia-377.58%51.83%220.76%124.88%80.14%85.75%63.03% (7.71%)(-8.46%)(-12.09%)(1.85%)(-14.21%)(-5.59%)(-1.36%) North and Central Asia381.31%220.76%141.27%261.12%295.77%165.83%191.13% (7.94%)(-12.09%)(0.47%)(-13.15%)(-14.39%)(-4.86%)(3.46%) South Asia (SAARC-4)125.79%124.88%261.12%104.96%127.04%115.22%107.84% (0.74%)(1.85%)(-13.15%)(-0.65%)(-8.08%)(5.96%)(8.26%) AUS-NZL86.09%80.14%295.77%127.04% 102.07%89.70% (-11.54%)(-14.21%)(-14.39%)(-8.08%) (-5.90%)(-4.67%) European Union (EU-3)110.22%85.75%165.83%115.22%102.07%45.93%67.19% (6.58%)(-5.59%)(-4.86%)(5.96%)(-5.90%)(-0.38%)(1.07%) USA84.35%63.03%191.13%107.84%89.70%67.19% (12.36%)(-1.36%)(3.46%)(8.26%)(-4.67%)(1.07%) *Based on ESCAP-World Bank trade cost database, excluding tariff costs. Percentage changes in trade cost between 2001-2004 and 2007-2010 are in parentheses.

7. 7 Contribution of natural barriers, behind-the border facilitation and trade-related practice to trade costs 0-10%* 60-90%* 10-30%* Tariff Trade Costs Policy-Related Non-Tariff Trade Costs Natural Trade Costs (Geographical and Cultural Factors) Direct Behind- & At-the border Trade Costs 1% 6-7% 16-18% 52-57% Availability/use of ICT Services Business (Regulatory) Environment Maritime Connectivity/Services Other Trade Costs Indirect cost of trade procedure Currency fluctuation Other non-tariff barriers * Illustrative based on casual observation of the data only. Natural trade costs for landlocked countries may be outside the range shown fo r natural trade costs. Key factors in lowering trade costs – Asia-Pacific Perspective

8. Introduction What have Asian countries done to facilitate trade? I III IV II Table of Contents Trade costs in Asia-Pacific and key policy drivers 8 Way forward in Asia-Pacific and Lessons learned VI

9. Figure 1. Trade Facilitation and paperless trade implementation scores of selected Asian countries Surveys were completed by participants to the APTFF 2012 involved in trade facilitation in their own countries, as well as other selected experts. Following consistency checks and collection of additional and complementary data by ESCAP after the Forum, a dataset of trade facilitation implementation in 26 Asian countries was finalized for the year 2012. The Survey questionnaire and the data set are available at: http://www.unescap.org/tid/projects/tfforum12-survey.aspAPTFF 2012 http://www.unescap.org/tid/projects/tfforum12-survey.asp Trade facilitation & paperless trade implementation in Asia – APTFF Survey 2012

10. Trade Facilitation strategies in Asian countries National Trade Facilitation Bodies/Committees in Asian countries Trade facilitation & paperless trade implementation in Asia – APTFF Survey 2012

11. Implementation of WTO-related trade facilitation measures by Asian countries Trade facilitation & paperless trade implementation in Asia – APTFF Survey 2012

12. Availability of electronic/automated customs systems in Asian countries Development of National Single Window system in Asian countries Trade facilitation & paperless trade implementation in Asia – APTFF Survey 2012

13. 13 Bilateral/regional trade agreements with trade facilitation provisions involving Asia-Pacific countries Source: Duval (2011)

14. Trade facilitation: case of ASEAN ASEAN: most integrated subregion in Asia –10 member countries; 25% intraregional trade Major trade facilitation measures:  Customs administration  ASEAN Harmonized Tariff Nomenclature (AHTN)  Harmonization of practices in customs valuation  Post-Clearance Audit System and Green Lanes for CEPT products  Harmonized Customs Declaration Document  Cargo Processing  Standards & conformance  Adoption/direct use of international standards of ISO/ IEC/ ITU  Sectoral approach  mutual recognition of conformance procedures  Transport facilitation  Multimodal transport linkages  Transit facilitation framework  Single window for submission and processing of trade-related data and documents

15. National Single Window (SW)? ‘’A facility that allows parties involved in trade and transport to lodge standardi zed information and documents with a single entry point to fulfill all import, ex port, and transit-related regulatory requirements.’’ UN/CEFACT Recommendation 33 15

16. ASEAN Single Window 16 Concept: connecting national single windows so that relevant trade data and information is automatically available to authorities in both the importing and exporting country, avoiding any delays and inconsistencies. “deadline for implementation”: 2015

17. Way Forward for trade facilitation in Asia-Pacific: c ross-border paperless trade ESCAP Resolution 68/3: “Enabling paperless trade and the cross -border recognition of electronic data and documents for inclusive and sustainable intraregional trade facilitation” Paperless trade: the use of electronic instead of paper docu ments in trade transactions Adopted by ESCAP Member countries in May 2012 Sponsored / co-sponsored by: Indonesia, Nepal, Republic of Korea, Sri Lanka, and Thailand Res. 68/3 requests ESCAP Secretariat to support and f acilitate the process for the development of regional arrangements on the facilitation of cross-border pa perless trade 17

18. Lessons learned from Asian experience Trade facilitation begins at home –Strong political will a must Institutionalize trade facilitation / assign a lead agency –Regular stakeholder consultations –Consult and systematically involve the private sector Set ambitious (long-term) targets –National/regional paperless trade Apply information and communication technologies (ICT) –Don’t forget the legal framework Take a holistic approach to trade facilitation in order to ide ntify bottlenecks along the entire supply/transaction chain –Services and behind the border measures often key to efficiency –Measure progress & update strategy accordingly 18

19. Business Process Analysis (BPA) for Trade Facilitation Number of parties: 11 on export side; 12 on import side Number of documents: 17 on export side; 44 on import side Trade in Electronics from CHINA to THAILAND

20. 20 www.unescap.org\unnext\ For more information, visit the United Nations Network of Experts for Paperless Trade in Asia and The Pacific Thank You! (duvaly@un.org) The next Asia-Pacific Trade Facilitation Forum (APTFF) will be held this year on 10-11 September 2013 in China. You are all welcome!

21. ANNEX 21

22. BPA as a first step to single window and paperless trading environment Establishment of Single Window and Paperless Trading Environment Document Simplification and Data Harmonization Business Process Simplification Business Process Analysis (BPA) 22

23. ESCAP-WB Trade Cost Database : Definition Our measure of ad valorem trade costs: where τij denotes geometric average trade costs between country i and country j tij denotes international trade costs from country i to country j tji denotes international trade costs from country j to country i tii denotes intranational trade costs of country i tjj denotes intranational trade costs of country j Xij denotes international trade flows from country i to country j Xji denotes international trade flows from country j to country i Xii denotes intranational trade of country i Xjj denotes intranational trade of country j σ denotes intra-sectoral elasticity of substitution (which is set = 8)

24. How to Access Trade Cost Data 24 http://www.unescap.org/tid/artnet/trade-costs.asp

25. How to Access Trade Cost Data 25 http://data.worldbank.org/data-catalog/trade-costs-dataset

26. 26 “an ongoing community of knowledge and practice to facilitate the implementation of single window and paperless trade in the Asia-Pacific region ” … As part of ESCAP’s effort to enhance regional connectivity and integration in cooperation with UNECE United Nations Network of Experts for Paperless Trade in Asia and the Pacific

27. 27 UNNExT Institutional Structure

28. 28 Tools & Guides Development Capacity Building Knowledge Sharing Regional Advisory Service Research & Analysis Business Process Analysis (BPA) Guide (Dec 2009) Data Harmonization Guide (Jan 2012) Legal Guide (Sep 2012) Single Window Planning & Implementation Guide (Sep 2012) National Workshop on SW& BPA, Mongolia (Sep. - Dec.09) Workshop on TF & BPA Training, Cambodia (Jun. – Jul. 2010) National Workshop on SW, Nepal (Feb. 2011) Workshop on SW planning & Implementation (Apr. 2012) UNNExT Brief Series Online Working Groups & Databases Asia Pacific Trade Facilitation Forum Mongolia Single Window Master Plan Peer Review (Oct. 2010) Nepal: Towards Single Window Environment (2011) Study visits to Single Window Facilities (Apr. 2012) Regional Study on Improving Trade Procedures (2011) (Using BPA Guide) Cooperation with ARTNeT (www.artnetontrade.org)www.artnetontrade.org UNNExT Activities: Implemented

29. 29 Step by Step Approach to Paperless Trade Facilitation and UNNExT Guides

30. Measuring performance is important From ADB-ESCAP Reference Book on “Designing and Implementing Trade Facilitation in Asia and the Pacific”, available at: http://www.unescap.org/tid/projects/tfforum_adbescapbook.pdf http://www.unescap.org/tid/projects/tfforum_adbescapbook.pdf

31. ESCAP’s Initiative on Business Process Analysis (BPA) for Trade Facilitation Part of ESCAP’s support to paperless trade –United Nations Network of Experts for Paperless T rade in Asia and the Pacific (UNNExT) www.unescap.org/unnext/ UNNExT Business Process Analysis Guide for the Simplification of Trade Procedures BPA? Analysis, including mapping, timing and costing of a process (e.g., moving goods from factory to deck of ship) Why? Necessary first step to improving a process

32. Output of a UNNExT Business Process Analysis (1) 32 Use Case Diagram Activity Diagrams Define scope of analysis, stakeholders involved, Activities to be studied Based on Universal Modeling Language (UML)

33. Output of a UNNExT Business Process Analysis (2) The time-procedure chart* *Frozen shrimp exports; Data collected by Institute for IT Innovation, Kasetsart University (2007)

34. Some findings from the BPA studies Document preparation takes most time, followed by transport/ handli ng issues “Basic” trade facilitation measures not always in place Procedures between private parties are a very big part of the overall tra de process Different countries require different documents and information for a sa me export product –Harmonization of procedures and documentary requirements crucial Importance of port logistics confirmed … Large variations in time and cost across products (or product usage), tra nsport routes, destination, firm size,…

35. Policy Recommendations from BPA (1) Full and inclusive representation of the private sector in tra de facilitation initiatives is essential. Implementation of basic trade facilitation measures should b e consistently enforced and re-enforced nation-wide. Paperless trade, including development of national and regi onal single windows, needs to be prioritized for trade facilita tion. Physical inspections should be minimized whenever possibl e, in particular through adoption of risk management techni ques by all organizations involved in the trade process.

36. Policy Recommendations from BPA (2) Healthy competition among transport, logistics and other t rade-related service providers should be encourage d Reviewing payment systems and their efficiency may reve al new opportunities for improving trade facilitation p erformance. Industry-specific trade facilitation programmes should be co nsidered, in particular for agricultural products. Harmonization of documentary requirements across count ries should be actively pursued. –Bilateral and regional free trade agreements should syste matically address trade facilitation issues.