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									                                                                                                           GMS Flagship Initiative
                                             FACILITATING CROSS BORDER TRADE AND INVESTMENT

Objectives

      Promote the subregion’s competitiveness by stimulating business expansion in the GMS border areas, facilitating cross-
      border trade and investment, overcoming information inadequacies in trade and investment information through a system of
      cross-border trade and investment data information, single-stop customs inspection, and support and incentives to small and
      medium enterprises as primary beneficiaries of increased cross border economic activities.

Participating Governments
      All GMS countries

Programs and Projects
      1.     Development and maintenance of cross border trade and investment data information system.
      2.     Development of products and services in support of small and medium enterprises.
      3.     Single-stop customs inspection on a pilot basis.
      4.     Expansion of customs facilitation measures to other areas (i.e., single-window inspection, coordinated hours of
             operation, transparency of customs procedures, automated customs procedures)..
      5.     Reduction of barriers to trade in agricultural products.
      6.     Coordination of policies and regulations of trade financial services.
                                                                                                                                            Flagship Initiative
                                                                                              FACILITATING CROSS BORDER TRADE AND INVESTMENT
                                                                                                                                                              page 2




              Programs/Projects          Description, Scope and Status        Estimated     Financing     Implementing Implementation       Issues and
                                                                                Cost      Plan/Sources      Agencies      Schedule          Constraints
                                                                               (US$M)      or Potential
                                                                                             Sources


    1       Development and maintenance of a cross-border trade and investment data information system
            Components:
        a   Collection of detailed     Project is one of three components       0.60          ADB         Ministries of     2002        Capacity for
            information on cross-      of regional technical assistance                                   Commerce or                   information collection
                                                     1
            border and transit trade   (RETA) 6020 on “Facilitating Cross-                                   Trade                      at the local level is
            in specific products       Border Trade and Investment for                                                                  rather limited.
                                       Small and Medium Enterprises in the
                                       GMS.”
        b   Internet-based             Project was initiated in 2002 and is     0.60          ADB         Ministries of     2002        Relative lack of
            searchable data-base       included as a component of RETA                                    Commerce or                   capacity at the
            application                6020                                                                  Trade                      provincial level to
                                                                                                                                        collect relevant
                                                                                                                                        trade or
                                                                                                                                        development
                                                                                                                                        information is an
                                                                                                                                        issue.
        c   Training for information Project will train at the provincial       0.60          ADB         Ministries of     2002        Same issue: the
            system maintenance       level in relevant information                                        Commerce or                   relative lack of
            and update               gathering, maintenance and update.                                      Trade                      capacity at the
                                     Project has been included as a                                                                     provincial level in
                                     component of RETA 6020                                                                             information




1
    RETA 6020: Facilitating Cross-Border Trade and Investment for Small and Medium Enterprises in the GMS, approved in December 2001 for $600,000.
                                                                                                                                              Flagship Initiative
                                                                                              FACILITATING CROSS BORDER TRADE AND INVESTMENT
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              Programs/Projects        Description, Scope and Status         Estimated      Financing     Implementing Implementation         Issues and
                                                                               Cost       Plan/Sources      Agencies      Schedule            Constraints
                                                                              (US$M)       or Potential
                                                                                             Sources

                                                                                                                                          collection.




        d   Bilateral cross-border   Several bilateral cross-border trade      To be          TBD              TBD             To be      There is a need to
                               2
            trade agreements         agreements are in place and in force.   determined                                      determined   review the status of
                                     Several of these agreements have          (TBD)                                           (TBD)      implementation of
                                     been identified in the Pre-investment                                                                bilateral agreements
                                     study for the East-West Corridor.                                                                    to determine the
                                                                                                                                          feasibility of
                                                                                                                                          converting them to
                                                                                                                                          multilateral
                                                                                                                                          agreements.


    2       Development of products and services to support SMEs
        a   Development of guides These product s and services are              0.60          ADB         GMS Business          2002      Resources at the
            for business planning, included as components of regional                                     Forum (GMS                      GMS Business
            investment guides,     technical assistance (RETA 6020 -                                      Business                        Forum to implement
            SME directory, etc. )  Facilitating Cross-Border Trade and                                    Forum                           the activity.
                                   Investment for Small and Medium                                        Secretariat)
                                   Enterprises in the GMS). Resources
                                   at the GMS Business Forum will
                                   implement the activity.
        b   Advisory assistance to Implemented by ESCAP with                   To be      Government of    Economic and         TBD                TBD
            industry for export    assistance from the Government of         determined     Germany        Social Council
            promotion              Germany, this assistance targets            (TBD)                      for Asia and the
                                   small and medium enterprises                                                Pacific
                                   (SMEs) with export potential and                                           (ESCAP)
                                   focuses on building the capacity of
                                   these enterprises for quality-related
                                   services.




2
  The Pre-Investment Study for the East-West Corridor identified several existing bilateral cross-border trade agreements in the GMS. The study recommended a
review these agreements with a view to extending them into a region-wide framework.
                                                                                                                                      Flagship Initiative
                                                                                         FACILITATING CROSS BORDER TRADE AND INVESTMENT
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          Programs/Projects       Description, Scope and Status       Estimated       Financing      Implementing Implementation       Issues and
                                                                        Cost        Plan/Sources       Agencies      Schedule          Constraints
                                                                       (US$M)        or Potential
                                                                                       Sources

    c   Mekong Project          The Mekong Project Development              2.5    ADB, Australia, Mekong Project      2002
        Development Fund        Fund Facility is a facility of the           in    EU, Finland,       Development
        Facility                International Finance Corporation     consultancy IFC, Japan,        Facility (MPDF)
                                (IFC) providing investment evaluation    services  Norway,            International
                                services and capacity building for    expenditures Sweden,              Finance
                                SMEs in Cambodia, Lao PDR and           from Dec Switzerland, and Corporation
                                Viet Nam.                              2000- Dec United Kingdom.           (IFC)
                                                                           2002    ADB contribution
                                                                                   to Mekong
                                                                                   Project
                                                                                   Development
                                                                                   Fund Facility of
                                                                                   $750,000 will
                                                                                   partially finance
                                                                                   the cost of
                                                                                   consulting
                                                                                   services
                                                                                   requirements
                                                                                   made through
                                                                                   regional
                                                                                   technical
                                                                                   assistance
                                                                                   (RETA) 5951
    d   Mekong Equity Fund      This facility will provide long-term      Target    ADB: $5 million,       ADB
                                equity support to small and medium capitalization:     remaining
                                enterprises (SMEs).                      20 to 25    balance from
                                                                                           other
                                                                                     development
                                                                                        financing
                                                                                      institutions
3       Trade and Customs Facilitation
    a   Pilot-testing of single Coverage area: Mukdahan and                0.60            ADB          Customs        2002        Cost-sharing
        stop customs inspection Savannaket; Lao Bao and Denh                                          Departments                  arrangements as
        at selected border      Savanh; and Poipet and                                                                             well as capacity of
        crossings               Aranyaprathet. Project is included as                                                              the customs
                                a component of RETA 6020.                                                                          personnel at border
                                                                                                                                   crossings are crucial
                                                                                                                                   to implementation.
                                                                                                                               Flagship Initiative
                                                                                     FACILITATING CROSS BORDER TRADE AND INVESTMENT
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     Programs/Projects         Description, Scope and Status         Estimated     Financing     Implementing Implementation   Issues and
                                                                       Cost      Plan/Sources      Agencies      Schedule      Constraints
                                                                      (US$M)      or Potential
                                                                                    Sources

b   Harmonization of        Project is ongoing under the ASEAN       Ongoing         TDB           Customs         TBD
    customs procedures      Framework. Activities include                                        Departments in
                            harmonizing customs procedures,                                      GMS countries
                            customs valuation, and                                                except PRC
                            improvements in the legal,
                            procedural frameworks for customs.

                            ASEAN’s harmonized tariff
                            nomenclature at the eight-digit level
                            is targeted for completion by 2002.


c   Other customs        These measures have been
    facilitation measuresidentified by the Trade Facilitation
      single-window     Working Group as part of the work
      inspection         program on customs. No specific
     coordination of    initiatives or projects in these areas
      hours of operation have been initiated thus far, however.
     more transparent
      customs
      procedures, and
     automation of
      customs
      procedures
d   Customs facilitation and This project trains customs personnel      0.3      PRC and ADB        People’s
    one-stop customs         in the GMS. The first session                                         Republic of
    inspection training      scheduled for mid-2002                                               China (PRC)
                                                                                                 State Customs,
                                                                                                   Ministry of
                                                                                                 Public Security
                                                                                                    and State
                                                                                                     Quality
                                                                                                 Administration
                                                                                                                                                     Flagship Initiative
                                                                                                  FACILITATING CROSS BORDER TRADE AND INVESTMENT
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          Programs/Projects            Description, Scope and Status           Estimated       Financing       Implementing Implementation            Issues and
                                                                                 Cost        Plan/Sources        Agencies      Schedule               Constraints
                                                                                (US$M)        or Potential
                                                                                                Sources

    e   GMS commerce                 Training of personnel in e-commerce,        TBD          PRC with co-     PRC Ministry of      2002-2005
        training workshop            business application, and studies on                    financing from    Foreign Trade
                                     network policy and projects is                            other donor     and Economic
                                     currently being designed.                                 institutions.    Cooperation,
                                                                                                                 and relevant
                                                                                                                institutions in
                                                                                                                   Yunnan
                                                                                                                   Province
    f   Institution Building and     Project is designed for organizations       TBD         Project seeks        Singapore            2002
        Capacity Strengthening       promoting trade in the GMS to                             financing.           Trade
        for Trade Promotion          strengthen their institutional capacity                      TBD           Development
        Organizations in the         for trade promotion activities.                                                Board
        GMS
    g   Training for export          Training was held in February 2002           Not         Singapore          Singapore           Training
        promotion strategies for     in Singapore.                             applicable     Trade and          Trade and          completed.
        Central Lower Mekong                                                                 Development        Development
        Valley                                                                                  Board              Board
    h   Training workshop s on       The training program seeks co-              TBD          Singapore          Singapore             TBD
        trade facilitation and the   organizers.                                              Trade and          Trade and
        implementation of                                                                    Development        Development
        simplified trade and                                                                    Board              Board
        customs documents
        procedures.
    i   Training program for         Program for the training workshop is         0.4         PRC with co-  PRC Ministry of         2002-2005
        trade facilitation in GMS    currently being designed. The                           financing from Foreign Trade
        countries                    objective is to promote private                           other donor  and Economic
                                     enterprise and human resources                             institutions Cooperation,
                                     development for more effective trade.                                    and relevant
                                                                                                             institutions in
                                                                                                                Yunnan
                                                                                                                Province
    j   Training for             Two sessions were held in Bangkok     Not                  Thai Chamber of Thai Chamber            2001-2003
        international trade and  in January 2001 and January 2002   applicable                Commerce       of Commerce
        investment
4       Cross-Border Facilitation in the Movement of Goods and People
    a   Framework Agreement Cambodia, Lao PDR, Thailand, and                                                                      Accession by  Ratification by the
                                Viet Nam are now signatories to the                                                               GMS Summit of Corridor
                                Framework Agreement to facilitate                                                                 Leaders       Governments is
                                cross-border movement of goods                                                                                  needed to
                                                                                                                                               Flagship Initiative
                                                                                             FACILITATING CROSS BORDER TRADE AND INVESTMENT
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          Programs/Projects         Description, Scope and Status          Estimated      Financing      Implementing Implementation           Issues and
                                                                             Cost       Plan/Sources       Agencies      Schedule              Constraints
                                                                            (US$M)       or Potential
                                                                                           Sources

                                 and people in the GMS.                                                                                     commence the
                                                                                                                                            process of the
                                                                                                                                            framework’s
                                                                                                                                            implementation.
    b Annexes and Protocols Implementing Annexes and Protocols               0.99      ADB: US$0.95M Various               Full             Strong commitment
      (A&Ps)                (A&Ps) have been classified in three                       GMS           agencies in the       implementation   by GMS
                            stages: Stage I for approval in 2003,                      Governments:  GMS countries         of the           governments is
                            Stage 2 in 2004, and Stage 3 in                            US$0.04M                            Framework        needed to ensure
                            2005.                                                                                          Agreement and    on-schedule
                                                                                                                           A&Ps is          implementation
                                                                                                                           expected by      according to the
                                                                                                                           2005.            agreement.
5       Industrial development
    a   Industrial development This study identified three priority         53.129          Partially      Thailand          2002-2011
        project                   projects: industrial processing zone,                financed by the     Ministry of
                                  agro-industrial processing zone, and                        Thai         Industry,
                                  jewelry industry in three Thai                       Government and      Industrial
                                  districts: Mae Sai, Chiang Saen, and                  private sector; Estate Authority
                                  Chiang Khong. Project has potential                    project seeks    of Thailand
                                  links to the GMS North-South                               donor
                                  Economic Corridor .                                     cofinancing.
                                  Budget was submitted for approval
                                  in 2002-2003 to conduct feasibility
                                  study in Chiang Saen and Mae Sai
                                  districts; joint investment projects
                                  between Thailand and with other
                                  GMS countries will be discussed
                                  during GMS meetings.
    b   Feasibility study for the A study conducted by the National          0.22      Thailand Ministry   National        Study has been Study has been
        establishment of a        Economic and Social Development                       of Commerce      Economic and        completed    endorsed by the Thai
        Special Border            Board (NESDB) with assistance from                                        Social                        Government in
        Economic Zone in          the International Trade Promotion                                      Development                      March 2001 and is
        Chiang Rai Province,      Fund, Ministry of Commerce, was                                           Board                         now being
        Thailand                  completed in December 2001. The                                                                         implemented. For
                                  study identified potential                                                                              2002-2004, a land
                                  activities/projects, development                                                                        use plan will be
                                  support infrastructure, administrative                                                                  formulated and the
                                  systems, and policy and procedural                                                                      basic infrastructure
                                  reforms in three border districts:                                                                      required for
                                                                                                                                     Flagship Initiative
                                                                                      FACILITATING CROSS BORDER TRADE AND INVESTMENT
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     Programs/Projects        Description, Scope and Status          Estimated      Financing      Implementing Implementation       Issues and
                                                                       Cost       Plan/Sources       Agencies      Schedule          Constraints
                                                                      (US$M)       or Potential
                                                                                     Sources

                            Mae Sai, Chiang Saen, and Chiang                                                                     development
                            Khong. The study promotes joint                                                                      provided. A
                            venture activities in trade, industry,                                                               feasibility study for
                            and tourism between and among                                                                        the establishment of
                            Thailand and neighboring countries                                                                   the industrial zone
                            along the GMS North-South                                                                            and transport
                            Economic Corridor.                                                                                   facilities in Mae Sai,
                                                                                                                                 Chiang Saen, and
                            A framework for development in the                                                                   Chiang Khong will
                            next 20 years (2002-2021) was also                                                                   commence.
                            developed, with 35 programs and                                                                      Infrastructure
                            112 projects (total investment cost of                                                               investment will
                            $475.82 M) covering social and                                                                       commence in 2004
                            human resource development,
                            urban planning, industrial
                            development, trade and tourism,
                            physical infrastructure, environment
                            and public health, institutional
                            development, policy, laws and
                            regulations improvement.
c   Trade and Tourism       The study identifies 22 projects           37.18     Partially funded Department of      2002-2006
    Development             focusing on border markets,                              by Thai          Local
                            improvement of tourism sites,                         government;     Administration,
                            establishment of duty-free shops and                  Project seeks     Tourism
                            International Common Depot (ICD),                     private sector   Authority of
                            conservation of historic towns,                        cofinancing.   Thailand, and
                            promotion of trade and agricultural                                   The Customs
                            products, and public relations on                                      Department
                            trade and tourism.

                            NESBD met with agencies
                            concerned to discuss the preparation
                            of the projects in March 2002

d   Institutional           Seven projects relating to                 13.03     Thai government       Special       2003-2021    Thai government
    development, laws and   administration of special economic                                     Economic Zone                   is improving rules
    regulations             zones, laws and regulations                                             Office ( to be                 and regulations
    improvement             improvement, review and update of                                       established)                   relevant to special
                            arrangements between Thailand and                                                                      economic zones,
                                                                                                                                        Flagship Initiative
                                                                                          FACILITATING CROSS BORDER TRADE AND INVESTMENT
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          Programs/Projects         Description, Scope and Status      Estimated        Financing     Implementing Implementation        Issues and
                                                                         Cost         Plan/Sources      Agencies      Schedule           Constraints
                                                                        (US$M)         or Potential
                                                                                         Sources

                                  neighboring countries, information                                                                   for example,
                                  systems and equipment have been                                                                      privilege schemes,
                                  identified by the study.                                                                             one-stop service,
                                                                                                                                       illegal labor issues
                                                                                                                                       and foreign
                                                                                                                                       exchange controls,
                                                                                                                                       all intended to
                                                                                                                                       encourage and
                                                                                                                                       facilitate potential
                                                                                                                                       investors in the
                                                                                                                                       Zone.

                                                                                                                                      Formulation of
                                                                                                                                       administrative
                                                                                                                                       body for the
                                                                                                                                       Special Border
                                                                                                                                       Economic Zone,
                                                                                                                                       both at
                                                                                                                                       governmental level
                                                                                                                                       and local level is
                                                                                                                                       underway.
6       Reduction of barriers to trade in agriculture products
                                                                                                                              rd
    a   Study on subregional      A small-scale technical             0.15                ADB             ADB      To begin 3 Q               ---
        issues in the Agriculture assistance (SSTA) to help identify                                               2002 for seven
        sector                    subregional issues in the                                                        months duration
                                  agriculture sector (including those
                                  pertaining to trade) is included in
                                  the pipeline for 2002.
7       Coordination of policies and regulation on trade-related financial services
    a   Study on subregional      An SSTA to help identify              TBD               ADB             ADB           TBD                  TBD
        issues in trade-related   subregional issues in trade-
        financial services        related financial services is
                                  considered for inclusion in the
                                  2003 assistance pipeline
                                Flagship Initiative
FACILITATING CROSS BORDER TRADE AND INVESTMENT
                                            page 10

								
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