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Economic benefits of trade facilitation TBG Harmonization Delivery

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					Trade Facilitation (TF) and its
     Economic Benefits

        Serguei Kouzmine
           UNECE GTS
        8 December 2010




                                  1
                         Recent trends
in 2009 the global economic crisis     Ratio of world exports of goods and commercial
                                       services to GDP, 1981-2009
sparked a 12.2% contraction in the     (Index 2000=100)
volume of global trade.
The largest such decline since World
War II.




                                       Source: IMF for world GDP, WTO Secretariat for world trade in goods
                                       and commercial services.
  Importance of trade facilitation

             « International Trade is one of the most important
             arenas in which we must combat the real effects of the
             crisis. Trade itself is a stimulus. »
             Source: Simon Crean, Australian Minister of Trade




   « Where the trade environment is more favorable,
businesses are better positioned to take advantage of
new opportunties, to grow and to great jobs when the
                   global economy picks up again. »
                                                 Source: WB, World Business Report, 2010
….But in many economies cumbersome trade procedures, long
  delays and high trading costs continue to stifle trade potential.


Where is trading easy—and where not?
Easiest                            RANK   Most difficult               RANK
Singapore                             1   Niger                         174
Hong Kong, China                      2   Burkina Fasu                  175
United Arab Emirates                  3   Burundi                       176
Estonia                               4   Azerbaijan                    177

Finland                               5   Tajikistan .                  178
                                                                              Ranking indicators:
Denmark                               6   Iraq                          179
Sweden                                7   Congo Rep.                    180   •   Documents to export &
Korea, Rep.                           8   Kazakhstan                    181
                                                                                  import
Norway                                9   Central African Rep.          182   •   Time to export & import
Israel                               10   Afghanistan                   183   •   Cost to export & import
Source: Doing Business database.          Doing Business Report 2011
                                        Data exchange in International Trade
              Purchase                                               Exportation                                                  Importation
                                                                                    Bill of lading, Documentation                                                                 • 20 actors
                                                                       Vessel Booking Request                                                                                     • > 200 data elements;
     Confirmed Line of Credit
                                                                  Vessel Booking Confirmation
Importer’s              Exporter’s
                                                                                                                                  Release/Approval                                 (60-70% re-keyed at
                                                                          Bill of Lading
  Bank                    Bank                                                                                                                                                      least once, 15% re-
                                                                 Rated Bill of Lading                                            Arrival Notice
           Fund Transfer              Original B/L,                                                                                                         Import
                                      Invoice, PO,                        Dock Receipt                 Ocean Carrier                                       Terminal                 typed up to 30 times)
                                      Packing List                                                                                                         Operator
                                                                                                                                                                                  • Manual procedures;
                                                                                                                               Demurrage
     Line of Credit                                                                                                            guarantee &                                        • Multiple data
     Proforma Invoice                                                                                                          payment                         Cargo
                             LC                                                  Export                                                                                             systems;
                                                                                                                                                               Status
                             Confirmation                                       Terminal
            Purchase Order                                                      Operator                                                                                          • > 30 documents or
                                                                                                                                             Customs House
Importer                   Exporter
                                                                              Dock receipt
                                                                                                                                                 Broker                             messages.
                                                                                                                                                                        Pick-up &
                                                                                                                                                  Import                Delivery Order
           Proforma Invoice                                   Pick-up & Delivery Order                                                             Docs
                                 Letter of                                                                             Release/Hold
                                 Instruction                                                                           Notice                 Cargo                     Inland
                                 Invoice, PO            Freight Forwarder /                                                                   Status                    Carrier
                                                                                             Inland
                                                             NVOCC
                                                                                             Carrier
                                                                                                                    Manifest       Customs ( Import
       Shipping & Funding Detail                                              Dock receipt
                                                                                                                                         )
                                                                                  Export Declaration
        Marine              Shipping & funding detail                                                               Vessel Manifest
      Insurance                                                AES                Export Declaration
      Company                                                                                                  Port
                                                                                                                                Converted Vessel
                                                                Customs (Export)
                                                                                                                                Manifest

                                                                                                  Importer Notice                                                             Source: UNCTAD 2006
                      Too many documents…

   Enquiry                        Freight invoice
   Order                          Cargo manifest
   Despatch advice                Export licence
   Collection order               Exchange control doc.
   Payment order                  Phytosanitary certificate
   Documentary credit             Veterinary certificate
   Forwarding instructions        Certificate of origin
   Forwarder's invoice            Consular invoice
   Goods receipt                  Dangerous goods declaration
   Air waybill                    Import licence
   Road consignment note          Customs delivery note
   Rail consignment note          TIR carnet
   Bill of lading




                                                           Source: UNCTAD 2006
                      Number of documents to export and
                      import

                                Documents to Export (number)   Documents to Import (number)


                Region           DB 2011           DB 2007       DB 2011            DB 2007

OECD high income                   4.4               4.5            4.9               5.2

East Asia & Pacific                6.4               6.8            6.9               7.5

Latin America & Caribbean          6.6               6.6            7.1               7.3

Middle East & North Africa         6.4               7.5            7.5               8.6

Eastern Europe & Central Asia      6.4               7.1            7.6               8.5

Sub-Saharian Africa                7.7               8.3            8.7               9.3

South Asia                         8.4               8.5            9.0               9.4

Global Average 2010                         6.5                              7.3

                                                               Source: World Bank Doing Business 2011
                      Time to export and import


                                  Time to Export (days)           Time to Import (days)


                Region          DB 2011          DB 2007       DB 2011            DB 2007

OECD high income                  11                11            11                 12

East Asia & Pacific               23                24            24                 26

Latin America & Caribbean         18                22            20                 27

Middle East & North Africa        20                25            24                 32

Eastern Europe & Central Asia     27                32            28                 34

Sub-Saharian Africa               32                37            38                 45

South Asia                        32                35            33                 38

Global Average 2010                       23.1                             25.8

                                                           Source: World Bank Doing Business 2011
What do traders want ?
 Simple and smooth processing of formalities

 Means to allow goods to proceed promptly to their final
  destination. No longer itineraries, no unpacking, no delays

 A single control point for all public services

 Standard forms, assembled into a ‘single bunch of documents’,
  compatible with trade documents and transport contracts

 Predictable and transparent rules and procedures



                                                        Source: UNCTAD
                         TRADE FACILITATION




  Simplification            Harmonisation           Standardisation



Process of eliminating    Alignment of national    Process of developing
all unnecessary           procedures, operations   internationally agreed
elements and              and documents with       formats for practices
duplications in           international            and procedures,
formalities, processes    conventions, standards   documents and
and Aug 2010
CSDATprocedures           and practices            information          10


Source: UNECE, UNCTAD
The economic benefits of TF

By reducing trade related transaction costs, delays at the
borders, number of documents required,improving custom
administration……., trade facilitation:
 Fosters businesses’ competitiveness
 Increases trade volumes and gains
 Raises countries’ GDP
 Boosts government tax revenues
Some evidence….
Worldwide

 Trade related transaction costs are estimated to lie between 2 and
  15% the value of imported goods (OECD 2001, 2003)

 Each 1% reduction of such costs is worth up an economic prize of
  USD 43 billion worldwide (OECD 2003)
Some evidence (con’t d)…
In APEC

 If APEC members, who perform below average, were able to
  improve their TF performance to half the APEC average, intra-
  APEC trade could increase by USD254billion and raise average
  APEC region GDP by 4,3 % (Wilson et al. 2004)
 If APEC members would reduce border delays by 1 day, they
  would increase exports by 1% (Martinez-Zarzosa et Marquez-Ramos 2008)
Towards smart regulation

Over the past 5 years, economies that rank high
on the ease of trading across borders have:
1.   Introduced or improved electronic data interchange systems
2.   Introduced or improved risk-based inspections
3.   Improved customs administration
4.   Reduced number of trade documents
5.   Improved procedures at ports
6.   Introduced or improved single window
7.   Implemented border cooperation agreements


                                                     Source: WB, World Business Report, 2010
Opening a single window (SW)
in Singapore & Korea
●    In Singapore, the SW System (Trade Net) allows the business community to:
        submit 100 % of trade applications (9 mln per year) to all concerned government
         authorities
        with a processing time of 10 minutes


●    In Korea, the SW System:
        Processes 80% of all import applications (3,000 per day)
        It is s used by 17 participating organizations and about 16,068 businesses from the trade
         community (as of December 2009).


●    In both countries Firms’ savings in labor, printing, paper delivery, storage,
     inventory costs, etc. amount to approx US$ 1 billion per year
.

Source: UN/CEFACT Single Window Repository 2010
                                  Россия в рейтинге
                                  «doing business»
                              Беларусь   Казахстан   Россия
Простота ведения бизнеса         58         63        120
Открытие бизнеса                 7          82        106
Разрешение на строительство      44         143       182
Наём работников                  32         38        109
Регистрация собственности        10         31         45
Получение кредита               113         43         87
Защита инвесторов               109         57         93
Уплата налогов                  183         52        103
Трансграничная торговля         129         182       162
Исполнение договоров             12         34         19
Закрытие бизнеса                 74         54         92
     Как видят Россию?
 « Индекс развития ИКТ » - Россия - 48 место
   (Швеция-1; Германия-13; Франция-18:
    Беларусь-55; Казахстан-69; ..)
 « Индекс логистики » -Россия- 94 место
    (Германия-1; Швеция-3; Франция-17;
     Казахстан-62; Украина-102; ..)
 « Делать бизнес» - Россия - 120 место
  (Сингапур – 1; США – 4; Германия – 25; Франция –
  31; Беларусь- 58; Казахстан –63,..)
                        In summary
Trade facilitation:
 Gives businesses a competitive edge
 Allows greater integration in the global economy
 Enhances government revenues



                              Contacts:
                              Sergei Kouzmine
                              UNECE Global Trade Solution Section
                              serguei.kouzmine@unece.org
                              www.unece.org/trade

				
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