ࡱ> HJIq` DbjbjqPqP .P::< T$ hrn<<< <<<g M"K( $0T,2 <2 TFF  ϲʹ Public Symposium Workshop on: Trade Facilitation: A Tool for Development. A Birds Eye View of Trade Facilitation David Wakeford MBE, SITPRO Ltd 21 April 2005 As someone whose hobby is watching birds and who is totally committed to trade facilitation, it is rewarding to be asked to give a birds eye view of this topic. The first time I gave a presentation in the World Trade Organisation (ϲʹ) was when the new Conference Centre had just opened and a combination of this and my high regard for Swiss efficiency lulled me into a false sense of security. I asked for my first slide to be shown and a roar of laughter followed, as it was fired into the audience by the slide projector. Despite my protests that the Swiss engineer should leave well alone and allow me to proceed, his drive for perfection meant the slide was fired a further three times before he eventually listened to me and gave up. You will be relieved that today I have no slides and no PowerPoint to go wrong. Sometimes it is best to just keep things simple. Today I will be covering a range of issues related to trade facilitation and development. I will be highlighting why trade facilitation is a good development tool for the vast majority of economies, why the ϲʹ is important for a trade facilitation agreement, emphasising the importance of business in the reform of the trading process and finally drawing your attention to some practical examples of development in the area of trade facilitation. For me the tenth anniversary of the ϲʹ is a very nostalgic one. It was just after the Uruguay Round and I was working as the international trade manager for a multinational chemical company when I began to focus on border issues. In the chemical industry, tariffs had been substantially reduced exposing the significant costs associated with the border management process for goods. It was in 1996; at the ϲʹ Singapore Ministerial Meeting that trade facilitation was first accepted onto the ϲʹ agenda. However because it was shackled inappropriately to the other new issues, progress was inhibited. Thankfully, at Cancun and the subsequent Ministerial Meeting here last July, trade facilitation was rightfully separated from the other Singapore issues for consideration on its own. I would also just briefly like to take this opportunity to congratulate the ϲʹ on its first 10 years in existence. They certainly have not been the easiest years but despite this some significant progress has been made. I know from many debates that I have been party too; that there are significant concerns that the ϲʹ process is now maturing and it is becoming bogged down with the same range of political issues that have inhibited progress in other international organisations. The consensus however, seems to be that it is far better to have the ϲʹ, than for developing countries and the business community to face the unconstrained proliferation of bilateral agreements and a vast array of non standard border processes, that just make international trade exceptionally complicated. Why is trade facilitation so important? So why is trade facilitation so important? I believe that the border management process can be equated to the lungs of a country. Healthy lungs facilitate the oxygenation of blood and stimulate life throughout the body. Trade facilitation energises the flow of goods and stimulates economic dynamism and wellbeing. An inefficient, constrained flow of goods creates a stagnant economy and poor economic performance. Trade facilitation is something that benefits all economies. Potentially both business and government will make substantial gains through trade facilitation. For business, it promotes greater transparency, more consistent and simplified procedures, whilst also lowering transaction costs and reducing clearance times. For government, trade facilitation enables improved collection of customs revenue; through the effective implementation of modern risk management techniques it also improves supply chain security and enables limited resource to be focused on high-risk transactions. Some countries are already substantially improving their border management performance so it makes it imperative that all countries progressively improve their own performance. If they do not, then they will be unable to compete effectively and maximise the benefits of those areas of trade where they have indigenous and commercial strength. There are numerous examples of countries already implementing trade facilitation successfully. The results of these individual initiatives are available, and have demonstrated that the cost of implementation has been more than justified in terms of the returns generated by commercial performance and economic benefit. These initiatives have also shown that improvement of the border management process through a focused approach to simplification, risk management and modernisation is not necessarily costly. Why a ϲʹ Agreement on trade facilitation? So why is a ϲʹ agreement so important? In brief a ϲʹ agreement will give coherence to the border management process, it will increase political will for countries to improve their domestic performance, it will encourage the simplification, standardisation and modernisation of the border process and it will ensure that the essential core standards, that underpin the border management process are implemented in the same way. The ϲʹ Agreement will also ensure that countries that do not have the capacity to improve their border management performance will be given adequate technical support and capacity building funds. Once initiated the improved border management process should be self financing and sustainable. There are many examples of good practice related to the effective management of the border process for international trade in goods. The World Customs Organisations Revised Kyoto Convention is an excellent compendium of best practice related to border management and of immense value in improving border management practice. One problem that it has is that it is only a recommendation, it cannot be enforced, and so it does not have a major influence in sustaining improved standards. It is extremely comprehensive and is not designed for progressive implementation. It does however identify core standards of fundamental value to a ϲʹ agreement. I am sure that we all recognise that individually our performance can be significantly enhanced by external influence or competition. Whilst some countries have achieved substantive reform on their own, there is no doubt that the external pressure created by a ϲʹ agreement requiring commitments, will significantly improve the domestic political impetus for a country to improve its own performance in border management. This will not only stimulate the domestic economy but will also stimulate the global economy. The simplification and modernisation of the process will make border management more efficient and cost effective. It will facilitate trade, and improve revenue collection whilst also imposing more focused control. It is only surprising that for an agreement solely directed towards improvement of the trading process and eliminating unfair trade distortion, that the border management process has not been addressed more comprehensively at an earlier stage in the life of the GATT. The current Articles V, VIII and X and other aspects of the GATT covering border issues are now up to 50years old and are totally inadequate for the modern trade process. These rules need to be updated substantially to ensure that there is a coherent approach to border management with common standards and an agreement that eliminates trade distortion. A ϲʹ Trade Facilitation Agreement needs to produce tangible benefits for all, be flexibly implemented to take adequate account of the capability of individual member countries and make available to countries both technical support and capacity building. Transit measures for landlocked countries One of the major concerns for an initial ϲʹ trade facilitation agreement must relate to the treatment of landlocked countries. Landlocked countries no matter how they improve their own border management performance are beholden to the vagaries of their neighbouring countries border management process. Transit procedures and border procedures that are non discriminatory must be key to any future ϲʹ agreement. Security The impact of security measures on international trade especially from developing countries to developed countries is of major concern. It is potentially the biggest threat to the facilitation of trade and development that we face at present. Having said that, the discipline and modernisation required to improve security might also be very beneficial. Whilst the ϲʹ Agreement does not cover security issues directly, the process of progressively improving the border management process will improve security and hopefully some of the provisions in a ϲʹ Agreement would eliminate some of the excesses related to the implementation of security measures. The Boksburg Group It is vital that a trade facilitation agreement takes into account the concerns and aspirations of developing countries and of the international trading community. Several years ago it was my perception that there were few opportunities for developing countries to discuss issues related to trade facilitation in an open, informed and non-threatening environment. To redress this, in a very small way, I have been involved in establishing Roundtable discussions on trade facilitation, which have included up to 20 developing countries and has become known as the Boksburg Group. This is an informal group of developing countries, created to discuss the form and content of the emerging ϲʹ Agreement on trade facilitation. The group consists of key stakeholders in the movement of goods, and includes government trade departments, customs and business. Discussions take place on a non-attributable basis and any papers summarising the Groups conclusions do not bind members individually, or collectively, but represent a shared resource which members can use as they see fit. It has evolved into a developing country think tank on trade facilitation. It helps boost countries confidence in tackling what would otherwise be a difficult policy area. These Roundtables have been very successful in helping to remove the mystique from trade facilitation and have given countries confidence to establish some more progressive views and to make proposals on trade facilitation, rather than waiting for developed country initiatives. Businesses vital role improving border management. Business has a vital role to play in the improvement of the border management process. Economic development through trade facilitation will not happen unless business is fully committed to, and championing the cause. Governments require guidance from business as to the benefits of efficient border management. Without some quantification of the benefits of trade facilitation, governments will have a hard task to commit resource to further this commitment, even if it were well supported by technical assistance and capacity building funds! To compete effectively business requires low cost and predictability in the trading process. It is the business imperative to trade competitively that should be the engine of economic reform. Government and business must work closely together to harness the benefits of trade facilitation. Trust between border authorities and international traders is a vital component in the development of efficient border management. This trust should be earned through a good compliance record over a number of years. Businesses committed to trading internationally, in the long term have similar ambitions to those of the border authority. They want to comply fully with the legal requirements covering their trade. They cannot afford to be faced with unexpected costs resulting from non-compliance and they cannot afford to be associated with any breach in security because of their failure to implement adequate safeguards. In view of this a partnership built on trust between border agencies and business has to be the right way forward. Business organisations focused on trade facilitation. There are a number of arenas where business collectively considers its view on trade and advises the international community. The International Chamber of Commerce (ICC) is the most prominent international business forum and covers all issues related to trade policy development. The Trade Facilitation Alliance (TFA) is a newly formed business group based in Geneva and focused solely on the trade facilitation as a tool for development. Lastly but not least, under the banner of the United Nations Economic Council for Europe we have, UNCEFACT the Centre for Trade Facilitation and Electronic Business. This international forum has a vital role in the development of electronic data standards. Over a hundred companies contribute their intellectual property and time to achieve standards for use in the electronic data exchange. This is very detailed, time consuming and vital work that has had a major influence in the facilitation of trade in goods. UNCEFACTs unique strength is its harnessing of company views related to the management of data exchange electronically. UNEDIFACT the standard for (electronic data interchange) is used globally and simplifies trade transactions on a daily basis. Another development that will simplify and modernise the flow of trade is that of an electronic standard for documents UNeDOCs for short. The reproduction of the current aligned paper document standard in an electronic format will eliminate the need for paper documents, simplifying the process and significantly cutting cost. As it will bridge the transition between the current paper documentary requirements and electronic documents its ability to reproduce an electronic message into an internationally recognised paper document, if required, is an absolutely vital facility. This development will reduce costs and simplify transactions primarily for developing countries and small and medium sized businesses. These are just two examples of UNECE grown solutions that will have a fundamental impact on international trade. The Single Window concept of facilitating trade. Last but not least we have the Single Window concept of facilitating trade. This is a single interface between business and government, normally electronic, where business can exchange information without having to go to a wide range of government departments. The system sorts the data and delivers it to the appropriate department and when dealt with the data is returned directly to the company via the Single Window. This is a valuable concept to facilitate trade and it is one that tends to be easier for developing countries without the plethora of data systems already in place, to implement. Indeed Mr Chairman, Jamaica who have had reservations about the move towards a trade facilitation agreement has already in place a Single Window called TradeNet. Conclusion I have covered a lot of ground in my presentation and I hope that it has given you a flavour of the opportunities that we face that will fundamentally transform developing country economies and the international trading process. The ϲʹ negotiations on trade facilitation are a vital component in this transition. Q (n$E'o')))++/118M8@@t@uCCD hS}>*hS}5>*\hS}5>*CJ\ hS}CJ hS}CJhS}5CJ\hS}PQyz (jkklm$dha$$a$Dmnlm ""$$D'E'o')))++++//111 4 405d051588M8=?@@@t@tCuCCDDddd$a$ ,1h. 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