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Corridor/Border Management: examples from outside the Caucasus. Gerald Ollivier Transport Specialist. Overview. Time as a trade barrier Corridor Approach Integrated Border Management and Single Electronic Window. Developing countries are moving up the technology ladder…(GEP 2004).

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corridor border management examples from outside the caucasus

Corridor/Border Management: examples from outside the Caucasus

Gerald Ollivier

Transport Specialist

overview
Overview
  • Time as a trade barrier
  • Corridor Approach
  • Integrated Border Management and Single Electronic Window
developing countries are moving up the technology ladder gep 2004
Developing countries are moving up the technology ladder…(GEP 2004)

Low income countries: Share of exports, 1981-2001 (percent)

Middle income countries: Share of exports, 1981-2001 (percent)

time is a trade barrier 1
Time is a Trade Barrier (1)
  • Trade occurs in physical space and moving goods requires time.
  • Trade logistics costs are as important as tariffs
    • Each day saved is equivalent to 0.5% tariff (Hummels)
    • 7% of value of world trade is cost of administration of trade logistics (UNCTAD)
  • Time/reliability/adaptability more important in multi-stage production (global supply chain)
    • % of vertical specialization in trade (use of imported inputs for exports) has grown 30% in the past 20 yrs and accts for half of overall trade growth.
  • Willingness to pay to save time:
    • Share of airfreight in US grew from 7% in 65 to 30% in 98
    • Airfreight 7 times as expensive as ocean shipping.
time is a trade barrier 2
Time is a Trade Barrier (2)
  • Imagine if the contents of a ship can be processed in half a day instead of a day …or a truck can do 6 roundtrips instead of 2 a month
    • Infrastructure capacity increased
    • Twice the cargo, twice the # of ships serviced, twice the number of containers, increased harbor fees, considerably lower cost to traders
    • …even more benefits:
      • These efficiencies offer wider attraction to trading partners
      • Efficiency in vessel turnaround attracts new trading, market center, distribution business.
time is a trade barrier 3
Time is a Trade Barrier (3)
  • A wide-body jet can carry fresh produce from supplier in one hemisphere to the buyer in the other hemisphere on the same or next day.
  • BUT it can take 10 days to :
    • Process orders
    • Obtain customs and border agency approvals
    • Book and schedule transport and distribution
    • Obtain payment approvals
    • Complete the transaction
  • This means removing 10 days from the selling season, revenue that cannot be replaced
corridors
Corridors

Definition

  • A linear system of transport infrastructure and related services connecting centers of economic activity and bounded by transport gateways which provide access to sources and destinations outside the corridor

Construction

  • Corridors are usually created through back-to-back bilateral agreements which are framed for international or regional protocols

Management

  • Corridors are not managed in an operational sense as most of the activities are performed by individual logistics service providers operating in the private sector. The important management function is coordination of policies between adjoining countries
examples
Examples
  • West Bengal
  • GMS
  • Maputo
  • Transkalihari
  • North Borneo
  • Northern Corridor
  • EWEC
  • Asian Highway
  • Can-Mex
corridor components
Corridor Components
  • Physical
    • Gateways and Border Crossings
    • Designated Routes, Single and Multimodal
  • Regulatory
    • Trade and Transit Policy
    • Cargo Inspection and documentation
    • Security, Entry and Enroute
    • Transport Services and Equipment
    • Cargo Ownership
    • Liability and Arbitration Rules
    • Duties and Taxes
    • Cost Recovery Mechanism
functions
Functions
  • Access to Landlocked Countries
  • Integrate Trading Communities
  • Economic Development Corridors
  • Coordinate Infrastructure Development
  • Control Smuggling
corridor economic benefits
Corridor Economic Benefits
  • Domestic Transport Services
  • Complementary Logistics Services
  • Toll Revenues/user charges
  • Trade Facilitation
  • Regional Economic Development
inhibitors to trade facilitation
Traditional Practices

Lack of Transparency

Technical Controls

Regulations

Paper Documents

Payment Methods

ICT and E-Commerce Infrastructure and Experience

Physical Space and Capital

Costs of Admin/logistics 14%

Customs-Centric Systems but other agencies

Customs only 15% of Trade Data

Post 911

Cultural Issues

Inhibitors to Trade Facilitation
integrated border management
Integrated Border Management
  • Enhancing services to users
  • WTO TF discussion
  • Geneva/Kyoto Conventions
  • Organizing processing by function (an agency can apply regulations for another one at low cost)
  • Coordination across border (joint crossing points)
principles of electronic trade facilitation
Electronics Replaces Paper

Reengineer Processes: Codes and Standards

Upgrade Customs ICT Systems and Processes

Transparency

Electronic Payment

Pre and Post Event Audits

Container Scanning

Straight-Through Processing

Risk Management

Create Facilitation Agency

Provide a Gateway to Customs Systems

Automate Communities

Principles of Electronic Trade Facilitation
single window
“Single Window”
  • A facility providing standardized information and documents with a single body to fulfill requirements for import, export and transit regulations and clearance.
  • Expedite and simplify information flows between trading community and the government
sew success factors
SEW Success Factors
  • High political mandate (Tunisia)
  • First detailed analysis, followed by process and documentary reengineering/streamlining with all key players (border agencies, transport, traders…)
  • Baseline indicators and performance measurement
  • Needed minimum infrastructure
  • Facilitating exchange of information: Common and intelligent network, international standards,regulatory framework for e-signature
models of single window
Models of “Single Window”
  • Single Authority
    • Sweden, Sokhna for its clients
  • Single automated system for the collection and dissemination of information
    • Integrated system: data is processed through the system (USA)
    • Interfaced system: data is sent to the agency for processing (Tunisia, but elements of transactions)
    • Combination of the above
  • Automated information transactions system
    • Singapore, Mauritius
ict reduces time and increases efficiency examples
ICT reduces Time and Increases Efficiency - Examples
  • Mauritius Trade Net has reduced average clearance times of goods from 4 hours to 15 minutes
  • Tunisie Trade Net (TTN) has reduced processing times of trade documents from max of 18 to 7 (3.5 days in cases not requiring technical controls).
  • Time savings in Singapore (STN) translate into 1% of GDP per year.
implementation approach
Implementation Approach
  • Phased Approach
    • Complexity
    • Quick wins to secure confidence
  • International Standards (UN EDIFACT, WCO Data Model, etc.)
    • International information exchange requires standards
  • Pilot users
    • Surveys / evaluation / fine –tune
  • Implementing body
issues
Issues
  • Trade Processes - Chain effect
    • As good as weakest link in the chain
    • Benefits only visible when everything works
  • Complex
    • Many details that must fit together
  • Resistance to change
    • Organizational
    • Shift from paper to electronic processes
  • Prepare to manage project risks

-Multiple activities / issues to address

Inter-institutional dependencies

players in the trade value chain
Importer/Exporter

Trade Professionals

Customs Broker

Freight Forwarder

Shipping Agent

Container Terminal

Ports and Harbours

Storage

Transport

Shippers

Customs

Revenue

Technical Controls

PIAs

Cert. of Origin

PSI

“Legal Invoices”

Banks

Insurers

etc.

Players in the Trade Value Chain
slide24

IMPORT

Pay Taxes

Clear Customs

Release Goods

MANUFACTURING/ VALUE ADDED

EXPORT

Air, Sea, Land

International

Transport

DOMESTIC

SUPPLY CHAIN

/Dues

Customs

Storage

Port

Raw Materials

Packaging

Transport

Storage

  • Port Processes
  • Internal Transport
  • Storage
  • Container Handling
  • Loading

Ship’s

Documents

“Informal

Processes”

IMPORTER

  • Manifest
  • Bills of Lading
  • Sea/AW Bill
  • Container Plans
  • Quotations
  • P.O.s
  • Delivery Notes
  • Con. Notes
  • Invoices
  • Statements
  • Invoice
  • Packing List
  • Declaration
  • Delivery Note
  • Payments
  • Remittance
  • Advice

Book/Confirm Transport

Shipping

Documents

Pay Taxes

Clear Customs

Release to Port

/Dues

Foreign

Chambers

Commerce

  • Certificates
  • Of Origin

MANUFACTURER

Port

Port

Customs

Customs

  • P.O.
  • Contract Terms
  • Delivery Instructions
  • L.O.C.

Informal

Processes

  • Invoice
  • Packing List
  • Declaration
  • Delivery Note

Receive

Goods

Overseas

Embassies

  • “Legal
  • Invoices”

EXPORTER

FOREIGN

BUYER

Post/

Courier

  • Certificates
  • Of Origin
  • Form A
  • EUR.1

Chamber of

Commerce

Finance

Ministry

Pay

Bank

Bank

  • Licenses
  • Certificates
  • Government
  • Approvals
  • Licenses
  • Certificates
  • Government
  • Approvals

Government

Departments

L.O.C.

Packing List

Invoice

LOC Approval

LOC Courier

port computerized systems some examples
Port Computerized Systems: Some examples
  • Spain  Portal Servicios Telemàticos
  • UK  CNS Port Community Systems and Martime Cargo Processing
  • Germany  DAK OSYS
  • Belgium  DEAGHA
  • Netherlands  PCR
  • France  ADEMAR 2000/PORTIS 2001
  • Singapore  PORTNET
  • Finland  PORTNET
gfp a knowledge resource
GFP: A knowledge resource
  • Knowledge Dissemination with UNTF (www.gfptt.org)
    • Over 200 Reference Documents now on the GFP website
    • About 50 Topics maintained by Core Partners open for your contributions
thank you
Thank you!
  • Gerald Ollivier (golliver@worldbank.org)
  • GFP Website : www.gfptt.org
    • (to register as a partner click on Become a Partner on the home page; as an individual, click on Register as a person)