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Trade Facilitation (TF) and its Economic Benefits Serguei Kouzmine UNECE GTS 8 December 2010

Trade Facilitation (TF) and its Economic Benefits Serguei Kouzmine UNECE GTS 8 December 2010. Ratio of world exports of goods and commercial services to GDP, 1981-2009 (Index 2000=100). Recent trends.

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Trade Facilitation (TF) and its Economic Benefits Serguei Kouzmine UNECE GTS 8 December 2010

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  1. Trade Facilitation (TF) and its Economic Benefits Serguei Kouzmine UNECE GTS 8 December 2010

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

  3. « 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 Importance of trade facilitation « 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

  4. ….But in many economies cumbersometrade procedures, long delays and high trading costs continue to stifle trade potential. • Ranking indicators: • Documents to export & import • Time to export & import • Cost to export & import

  5. Data exchange in International Trade Purchase Exportation Importation 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 • 20 actors • > 200 data elements; • (60-70% re-keyed at least once, 15% re-typed up to 30 times) • Manual procedures; • Multiple data systems; • > 30 documents or messages. Source: UNCTAD 2006

  6. Too many documents… Enquiry Order Despatch advice Collection order Payment order Documentary credit Forwarding instructions Forwarder's invoice Goods receipt Air waybill Road consignment note Rail consignment note Bill of lading Freight invoice Cargo manifest Export licence Exchange control doc. Phytosanitary certificate Veterinary certificate Certificate of origin Consular invoice Dangerous goods declaration Import licence Customs delivery note TIR carnet Source: UNCTAD 2006

  7. Number of documents to export and import Source: World Bank Doing Business 2011

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

  9. 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

  10. TRADE FACILITATION Simplification Harmonisation Standardisation Process of eliminating all unnecessary elements and duplications in formalities, processes and procedures Alignment of national procedures, operations and documents with international conventions, standards and practices Process of developing internationally agreed formats for practices and procedures, documents and information Source: UNECE, UNCTAD CSDAT Aug 2010

  11. 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 The economic benefits of TF

  12. 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….Worldwide

  13. 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) Some evidence (con’t d)…In APEC

  14. Over the past 5 years, economies that rank high on the ease of trading across borders have: Introduced or improved electronic data interchange systems Introduced or improved risk-based inspections Improved customs administration Reduced number of trade documents Improved procedures at ports Introduced or improved single window Implemented border cooperation agreements Towards smart regulation Source: WB, World Business Report, 2010

  15. 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 Opening a single window (SW) in Singapore & Korea

  16. Россия в рейтинге «doing business»

  17. 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,..)

  18. 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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