1. UNECE 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

2. UNECE Agenda 1. UNECE Integrated Model of Trade Facilitation 2. UN/CEFACT Standards, Recommendations and Tools 3. International Trade Single Window 4. Capacity Building

3. UN Economic Commission for Europe (UNECE) UN Centre for Trade Facilitation and Electronic Business (UN/CEFACT)

4. UNECE 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. UNECE region - two thirds of world trade

5. UNECE Trade Facilitation in the UNECE Context Trade Facilitation is a key tool of UNECE to achieve this objective This work in trade facilitation supports the UN Millennium Development Goal 8 – to develop further an open trading and financial system that is rule-based, predictable and non-discriminatory.

6. UNECE 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

7. UNECE

8. INTERNATIONAL TRADE TRANSACTION PROCESS 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 INVOLVES Prepare For Export TransportImport SHIP BUY PAY Prepare For Import

9. UNECE Total Trade Transaction – Integrated supply- chain The UN/CEFACT Vision Trade facilitation Competitiveness – trade efficiency

10. UNECE 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 Documentation Pre-shipment Inspection Customs formalities (Inland) Manufacture Load and despatch Proof of export Inwards clearance Economic efficiency

11. UNECE

13. The Work of Trade Facilitation  It encompasses the systematic rationalization of processes, procedures, infrastructures, documentation and information exchange for international trade.  Involves Customs, other regulatory agencies, transport, ports, customs brokers, freight forwarders, finance, insurance, legal issues, etc  It requires strong dialogue and partnership between government and the business community

14. UNECE Strategic Approach to Realising the Benefits of Trade Facilitation  Undertake detailed needs analysis and set priorities at both the national and regional level  Total trade transaction approach  Involve the business community from the outset  Cultivate the necessary political will

15. UNECE Strategic Approach to Realising the Benefits of Trade Facilitation  Develop national and regional implementation strategies, with trade facilitation as a key trade and economic development instrument  Manage the technical assistance and capacity building process  Use existing trade facilitation standards, tools and instruments

16. UNECE Why has Trade Facilitation become more popular  Economic Benefits - shift in focus from technical to trade/economic policy perspective  Greater demands from business for predictability and speed  Information requirements  International Supply Chains  Investment Link  Trade Facilitation at the WTO

17. UNECE 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.

18. UNECE 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

19. UNECE Recent 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.

20. UNECE Agenda 1. UNECE Integrated Model of Trade Facilitation 2. Best Practice - UN/CEFACT Standards, Recommendations and Tools 3. International Trade Single Window 4. Capacity Building

22. UNECE UN/CEFACT  UN/CEFACT: United Nations Centre for Trade Facilitation and Electronic Business  Open to all UN Member States and Organisations Recognised by ECOSOC  Global Mandate  Driven by member States – Plenary and Forum  Over 400 international experts – meets worldwide  Vision: Simple, Transparent and Effective Processes for Global Commerce

23. UNECE UN/CEFACT Standards and Recommendations  Over 30 Recommendation, many of which are ISO Standards  Recommendation 1 - UN Layout Key for Trade Documents (ISO 6422)  Recommendation 25 - UN/EDIFACT (ISO 9735)  Recommendation 33 - Single Window  UNeDocs - IDS  UNTDED (ISO 7372) – CCTS - WCO Customs data model  Recommendation 4 on TF Structures

24. UNECE Trade Document Simplification and Standardisation The United Nations Layout Key for Trade Documents

25. UNECE 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 Documentation Pre-shipment Inspection Customs formalities (Inland) Manufacture Load and despatch Proof of export Inwards clearance Economic efficiency

28. Codes for Trade Information Rec 19: Mode of Transport Rec 16: UN/Locode Rec 3: ISO Country Code Rec 17: Payment Terms Rec 9: Currency Code Rec 20: Units of Measurement Rec 28: Means of Transport Commodity Code Rec 21: Package Codes

29. UNECE United Nations Standards for Trade Documents… SAD

30. UNECE UN Trade Facilitator Toolkit  Practical tools that help trade facilitators to align trade documents  Guidelines for Trade Facilitators  UNLK Grid in Adobe Acrobat  Background material (UNLK, UNTDED..)  Beta version available from our website at http://unece.unog.ch/etrade/

31. UNECE  Standardisation and harmonisation of trade documents is a prerequisite for paperless trade

32. UNECE XML Exporter Importer PAPER Importers Bank EDIFACT F Forwarder HTML/PDF Electronic Signature Document Validation Electronic Post Mark Language switching National Requirements Time Stamping…. Digital Document Web Services Office PC Standard user software, Internet Browser Back-end Server UNeDocs Trade & Transport Documents Security, efficiency, speed, best business practice, ICT integration Adds Provides specialised services Cost Recovery basis Internet UNeDocs

33. UNECE Agenda 1. UNECE Integrated Model of Trade Facilitation 2. UN/CEFACT Standards, Recommendations and Tools 3. International Trade Single Window 4. Capacity Building

35. UNECE International Trade Single Window UN/CEFACT Recommendation 33 defines a Single Window as a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfil all import, export, and transit- related regulatory requirements. If information is electronic, then individual data elements should only be submitted once.

36. Current situation for exchanging trade information with government

37. The Single Window approach A simple, one-stop solution offering official control with trade facilitation.

38. UNECE UN/CEFACT Single Window Recommendation 33 Calls on Governments to establish a Single Window with the following features:  Allow traders to lodge standardized information and documents with a single entry point to fulfil all import, export, and transit-related regulatory requirements  If information is electronic then it need only be submitted once  Allow for the sharing of information amongst government agencies in respect of international trade transactions

39. UNECE Recommendation 33 calls on Governments to Establish a Single Window with the following features (continued):  Provide coordinated controls and inspections of the various governmental authorities.  Allow payment of duties and other charges  Be a source of trade related government information Recommendation includes a set of Guidelines for the establishment of a Single Window

40. UNECE UN/CEFACT Single Window Case Study Repository  Finland  Germany  Guatemala  Hong Kong SAR (China)  Mauritius  Japan  Malaysia  Senegal  Singapore  Sweden  United States  Korea. More case studies (Ghana, Australia …) Each case is described in a standardized template

41. Diversity of SW models: adopting to specific national/regional conditions and requirements  Financing o By the State (Finland, Sweden, United States), o By the private sector (e.g. Guatemala, Germany) o private-public partnership (e.g. China, Malaysia, Mauritius, Senegal, Singapore)  The use of Single Window o compulsory (Finland, Guatemala, Mauritius, Senegal) o voluntary (China, Germany, Malaysia, Sweden, United States)  Services o Free on charge (Finland, Sweden, United States) o Paid based on various payment schemes (Guatemala, Germany, China, Malaysia, Mauritius, Senegal, Singapore)

42. Benefits and Costs of a Single Window Benefits for government and trade  Faster processes, clearance and release  Reduced costs of compliance  Reduced corruption  Reduction in bureaucratic processes  Better collection of government revenues  Improved trader compliance  risk management techniques for control and enforcement purposes  Predictable application and explanation of rules Implementation costs  From less than one million US dollars (Guatemala) to  Between 1and 4 million dollars (Finland, Senegal, Malaysia)  In the US, the cost was significantly higher but the system is quite extensive and covers many additional areas. Benefits outweigh costs ……

43. UNECE Key factors for success  Strong leadership, which can come from the private (Guatemala) or the public sector (Malaysia, Senegal, United States, Singapore, Korea, Australia)  Cooperation and commitment of all stakeholders, private and public (Finland, Mauritius, Malaysia, Senegal, United States, Singapore)  User-friendly system, which do not create complications for usual business procedures (China, Malaysia, Sweden, Senegal, United States)  Investments in modern technologies (Guatemala, Malaysia)  Phased, flexible approach (Germany, Mauritius, Singapore)

44. UNECE Next Steps for UNECE …  Develop Recommendation 34 on Data Harmonisation  Develop Recommendation 35 on Legal Framework for Data Exchange  Establish a Single Window Stakeholder Group  Develop a Cross Border Reference Data Model  UNeDocs pilot implementations  Expand SW Repository on the Web  Welcome to participate in work

45. UNECE Agenda 1. UNECE Integrated Model of Trade Facilitation 2. UN/CEFACT Standards, Recommendations and Tools 3. International Trade Single Window 4. Capacity Building

46. UNECE Capacity Building Approach  Capacity building workshops to help countries understand available recommendations and standards and see where they can fit their needs  One Size does not fit all – but standards essential  National regional strategies  Partnership approach  National Experience

47. UNECE UN/CEFACT Comprehensive Guide to Trade Facilitation Implementation  The Guide will help countries to: o identify trade facilitation needs and priorities o assess and understand available tools, techniques and standards o assess costs for implementation o review implementation and funding options o develop an effective national and/or regional trade facilitation implementation strategy.

48. UNECE The Guide  Guide  Training material  Website  CD  6 Regional Training Workshops Target Date for Completion of Guide – end 2006

49. UNECE Relationship between the work of UNECE (UN/CEFACT) and other international organisations in Trade Facilitation

50. Recommendations / Standards Development and Maintenance Capacity Building (Helping governments elaborate a national TF strategy) Technical Assistance (Donors decide what is to be done) - UNECE does not provide long term TA UNECE - UN/CEFACT UNECE in partnership with other organizations UNCTAD,WB, UNIDO, etc UNECE’s role is to create the standards through participation of UN member States and the business community in UN/CEFACT Working Groups. We engage in an active Capacity Building programme to help countries understand how best to implement these standards, given their unique needs, priorities and resources while other organizations assist in long –term technical assistance (UNCTAD, WB etc). The WTO sets the rules WTO

51. UNECE.. now we have to make trade facilitation happen!

52. UNECE THANK YOU ! tom.butterly@unece.org

53. UNECE Follow-up  All UN/CEFACT Recommendations, codes, standards and publications are available for free on our website at:  www.unece.org/cefact/  www.unece.org/trade  www.unece.org/etrades/unedocs/ www.unece.org/etrades/unedocs/  tom.butterly@unece.org