UNECE Integrated Approach to Trade FacilitationTom Butterly Deputy ChiefGlobal Trade Solutions BranchUNECE Capacity-Building Workshop on the WTO Trade Facilitation Negotiations12-13 June 2006, Chisinau, Republic of Moldova
Agenda • UNECE Integrated Model of Trade Facilitation • Best Practice Examples - UN/CEFACT Standards, Recommendations and Tools • International Trade Single Window • Capacity Building
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.Trade Facilitation is a key tool of UNECE to achieve this objective
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
INTERNATIONAL TRADE TRANSACTION PROCESS SHIP PAY BUY Prepare For Export Prepare For Import Export Transport Import INVOLVES • 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
The UN/CEFACT Vision Total Trade Transaction – Integrated supply-chain Competitiveness – trade efficiency Trade facilitation
Economic efficiency £ Added value Omagh to Algeria. 1 Order – 360 net tonnes, 21 weeks Payment by customer and cost Retail sale Payment of Unload and store transport and FOB charges Delivery to customers warehouse Inwards clearance Main vessel off-loading Proof of export Sea Crossing Refund payment and administration Main vessel loading Exit clearance from community Delivery to port Unload, re- pack Dehire GKN pallets Delivery to customs warehouse Documentation Refund claim Invoice and order administration Load and despatch Customs formalities (Inland) Pre-shipment Inspection Manufacture Short Lead Components Documentation Export Licence Request Health Certificates, Licences Artwork Order receipt and administration Long Lead items Credit Arrangements Enquiry Validation 12 13 15 16 19 21 Weeks (approx)
Why focus on Trade Facilitation ? • Economic Benefits - shift in focus from technical to trade/economic policy perspective • Greater demands from business for predictability and speed • Information requirements • Investment Link • Trade Facilitation at the WTO
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.
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
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.
Strategic Approach to Realising the Benefits of Trade Facilitation • Undertake detailed needs analysis and set priorities at both the national and regional level • Involve the business community from the outset • Cultivate the necessary political will • Develop national and regional implementation strategies, with trade facilitation as a key trade and economic development instrument • Total trade transaction approach • Use existing trade facilitation standards, tools and instruments