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Trade facilitation policy at national and regional levels: core elements

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT. Trade facilitation policy at national and regional levels: core elements. Strengthening Trade Competitiveness in times of global economic crisis – Challenges faced by LLDCs. José María Rubiato UNCTAD – Trade Logistics Branch

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Trade facilitation policy at national and regional levels: core elements

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  1. UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT Trade facilitation policy at national and regional levels: core elements Strengthening Trade Competitiveness in times of global economic crisis – Challenges faced by LLDCs José María Rubiato UNCTAD – Trade Logistics Branch jose.rubiato@unctad.org Third Meeting of Trade Ministers of Landlocked Developing Countries Ezulwini, Swaziland, 21-22 October 2009

  2. Outline • Evolving concepts on Trade Facilitation • International Instruments related toTrade Facilitation • New Tools available • Trade facilitation reform • How to start

  3. Evolving concepts

  4. Traditional definition • Simplification and harmonization of international trade procedures and documentation • Core elements: • Documents as support of information • Procedures as information processing • Main outcomes: • Standard documents • Standard data and codes • Standard protocols

  5. Recent evolution • Transport corridors and trade channels • Supply chain management model • Core elements: • Goods movements rather than paperwork • Operational issues not only controls • Main outcomes: • Integrated approach on processes • Single international transaction

  6. Potentially Misleading Beliefs • TF is just a matter of bureaucracy • TF is inexpensive & easy to implement

  7. Purchasing Export Import Bill of lading, Documentation Vessel Booking Request Confirmed Line of Credit Vessel Booking Confirmation Release/Approval Exporter’s Bank Importer’s Bank Bill of Lading Rated Bill of Lading Arrival Notice Original B/L, Invoice, PO, Packing List ImportTerminalOperator Fund Transfer Ocean Carrier Dock Receipt Demurrage guarantee & payment Line of CreditProforma Invoice Cargo Status LCConfirmation Export Terminal Operator Purchase Order Customs House Broker Exporter Importer Dock receipt Pick-up & Delivery Order Import Docs Proforma Invoice Pick-up & Delivery Order Release/HoldNotice Letter of InstructionInvoice, PO Inland Carrier Cargo Status Freight Forwarder / NVOCC Inland Carrier Manifest Customs ( Import ) Shipping & Funding Detail Dock receipt Export Declaration Marine Insurance Company Vessel Manifest Shipping & funding detail AES Export Declaration Port Converted Vessel Manifest Customs (Export) Importer Notice Data Flow for International Trade • Up to 20 Involved Parties • 200+ data elements • Manual data exchange processes • Multiple data platforms • 30+ documents or messages • 60-70% repetitions • 6-15% of the final value of the goods • 40% of the transaction time

  8. International Instruments related toTrade Facilitation

  9. Instruments outside WTO • ICC International Customs Guidelines; • ICS rec. on B/L and ship’s manifest; • IMO FAL Convention; • IMO: other conventions with TF relevance (7); • Relevant ISO Standards; • UN/ECE (& UN/CEFACT) Recommendations; • UN/ECE TIR Convention; • UN/ECE CMR Convention; • WCO: Revised Kyoto Convention; • WCO: Istanbul Conv. (Temporary Admission); • WCO: Nairobi Conv. on Prevention, Investigation & Repression of Customs offences; • WCO: Various other WCO Customs Conv. (9); • WCO: Various non-binding WCO rec. (5); • Free trade agreements and/or Customs unions.

  10. Existing WTO rules on trade facilitation • Agreement on the Implementation of Article VII GATT 1994 (Customs Valuation) • Agreement on Preshipment Inspection • Agreement on Import Licensing Procedures • Agreement on Rules of Origin • Agreement on Technical Barriers to Trade • Agreement on Sanitary and Phytosanitary Measures

  11. New Tools available

  12. Trade Facilitation Platforms • National and Regional Trade and Transport Facilitation Committees: asstructures for dialogue with private stakeholders, inter-agency coordination and high level policy coherence at national level in the design of administrative reforms. • WTO Trade Facilitation Support Groups: as coordinating mechanisms to support national negotiators in Geneva through the provision of technical expertise and feedback on the tabled proposals. • Transit corridor facilitation clusters: as operationalmulti stakeholders multi national cooperative platforms to assess obstacles, design and implement solutions to improve transport corridor operations and management.

  13. Repository of Trade Facilitation Working Groups • A joint initiative by UNCTAD and UNECE the repository of national working group on trade facilitation, provides a collection of country's experiences in setting up and maintaining national inter-agency public private consultative trade facilitation mechanisms • The country experiences currently include Benin, Burkina Faso, Ecuador, Mali, and St. Lucia. It is planned to expand the number of countries’ participating during this and the following year. See:http://r0.unctad.org/ttl/repository/TFWGintro.htm.

  14. Customs Carrier Freight Forwarder Shipper Cluster Clusters along Transport Corridors

  15. Time/Cost – Distance Methodology Ulaanbaatar Tianjin Port

  16. Zamyn Uud 1000 km 3 hrs. 20 min. (3.5 min. per box) Average speed 22.4 km/h 20 hrs 31 min. Tianjin, 0 km Erenhot, 983 km Transshipment: Customs: Example: Tianjin-Ulaanbaatar Railway link Ulaanbaatar Day 4 1700 km 04.18 a.m. 75 hrs 31 min. Day 3 27.5 km/h 02.30 a.m. Day 2 29 hrs 12 min. 05.59 a.m. Day 1 1,691 km 33.7 km/h Time 500 km 1000 km 1500 km 2000 km Distance China, 3 hrs. 00 min. Mongolia, 4 hrs. 50 min. Shunting + train formation: 3 hrs. 35 min.

  17. Border Crossings: Cost or Time Cost per TEU $650 $700 $600 $500 $400 $293 $300 $200 $131 $155 $124 $200 $100 $100 $0 Mongolia- China Nepal- India Lao PDR- Thai Lao PDR- Viet Nam Mongolia- Russian Fed. Kazakhstan- Russian Fed. *Uzbekistan- Turkmenistan * Estimated from cost of standard European 12 meter semi trailer.

  18. UNCTAD Liner Shipping Connectivity in 2009 Source:http://www.unctad.org/transportnews

  19. Transit Countries LSCI 2004-2009

  20. WB - Logistics Performance Index Source:www.worldbank.org/lpi

  21. LPI 2009 – LLDCs and transit

  22. Trade facilitation reform

  23. Reform Policy Objectives • External commitments: • Bilateral and regional agreements • WTO • Internal objectives: • Administrative effectiveness • Better trade management • Better use of public resources • Trade competitiveness • Support national trade sector • Lower transaction costs

  24. Common Reform Phases • Definition of goals to achieve the objectives • Analysis of the capacity of the current processes to achieve the goal • Analysis of required actions to fill the gaps • Assessment of needs/resources for identified actions • Design of individual processes • Development of comprehensive plan • Implementation of the solution • Operation and maintenance of the new system

  25. Elements in each phase • Staffing: manpower / technical skills • Technology: equipment and training • Institutional: functions, interactions and management • Regulatory: authority and mandates • Budgeting costs / revenues • All the above for three different levels: • Planning and monitoring unit : goals – analysis – solution - sequencing • Design and development units: analysis and process development • Implementation units: operation and maintenance of the system

  26. Sequences to introduce reform • Function sequence depends on: • Steps to take before • Impact on consecutive processes • Priority sequence depends on: • External commitments • Other defined objectives • Time sequence depends on: • Priorities • Resource deployment

  27. Three dimensions TRADE TRANSPORT Trade Facilitation CUSTOMS

  28. Customs Facilitation CUSTOMS dimension Customs Reform and Modernization faster clearance of cargo Simplify/harmonize documents & procedures Increased Customs revenues Implement modern Customs laws Support automated data systems ASYCUDA

  29. Trade Facilitation TRADE dimension Best-recommended commercial practices Simplify IMP/EXP documents & procedures faster RoI for IMP Transit Agr. Competitive exports Create awareness on best practices Promote Single Window

  30. Transport Facilitation TRANSPORT dimension Best-recommended transport practices Faster turn-over of means Create awareness on modern transport & logistics smooth movement of goods Establish norms (incl. liability insurance) Implement modern Transport laws Implement logistics tools

  31. How to start

  32. Action planning workshop • 3 days of analysis and 2 days for planning of activities with 20-25 participants: • Ministry of Trade • Ministry of Finance/ Customs • Other Government Agencies related to trade • Exporters, importers and shippers • Service providers: Customs brokers, freight forwarders, carriers • Commercial banks, Central Bank • Export promotion agency / Investment promotion agency

  33. Objective • To introduce fundamentals of trade facilitation (basic concepts, global trends, what can be done, costs and benefits, how to implement, etc); • To exchange experiences: learning about trade facilitation (TF), identify bottlenecks, needs and priorities on TF. • To develop an initial high level scoping with participants and outline a strategy for implementation (identification of bottlenecks, priorities, key stakeholders, etc). • To prepare a draft national or regional action plan.

  34. Day 1: General presentation • 1) Introduction to trade facilitation • 2) Cost and benefits of trade facilitation. • 3) Main stakeholders of trade facilitation reforms. • 4) Trade facilitation implementation strategies. • 5) Presentation of trade facilitation successful reforms.

  35. Day 2: Needs assessment - round table • To learn from participants about the state of the play as regards trade facilitation and identify bottlenecks. The presence of representatives of the private sector is essential. • Main obstacles and bottlenecks faced by trade operations • Current initiatives to address procedural obstacles and bottlenecks • Existing legal and institutional frameworks governing trade • Transit /transport policy and transit / transport arrangements.

  36. Day 3: Barriers and Stakeholders • Risk analysis: minimum conditions that must exist for a successful implementation of the project; external factors that can have an impact on the project • Stakeholder analysis: identify key persons, institutions as counterparts and establish a TF consultative group; identify a possible trade facilitation task force that could support the implementation of adopted measures.

  37. Day 4: Plan of action • Determine a TF focal point to be the main counterpart for the future project implementation. • Define the pre-conditions for projects implementation. • Determine project objectives/outcomes and related activities. • Prepare an initial draft of a project proposal. • Agree on an initial scheduling of the activities. • Discuss staffing and resource requirements • Design practical operational modalities.

  38. Day 5: Meeting with donors and partners • Meet with relevant financing and technical assistance agencies foreseen to be involved in project implementation • Current activities and ensure synergies and complementarities • Discuss local practical conditions for project personnel deployment and scheduling of deliveries.

  39. Announcements • 8-9-10 December 2009: Experts meeting on Public and Private Partnerships for the Development of Infrastructure to Facilitate Trade and Transport. • 11December 2009: Ad Hoc Experts Meeting on Transit Ports servicing Landlocked Developing Countries

  40. UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT Thank you José María Rubiato UNCTAD – Trade Logistics Branch jose.rubiato@unctad.org Third Meeting of Trade Ministers of Landlocked Developing Countries Ezulwini, Swaziland, 21-22 October 2009

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