UNCTAD Expert Meeting

1. Key Strategies for ICTs in Transport and Trade October 18, 2006 Presented by: Angela Strachan, Adviser (Trade) Commonwealth Secretariat UNCTAD Expert Meeting

2. Introduction The Commonwealth Fifty three (53) member countries Represents 1/3rd of world’s population Accounts for 23% of world trade (US$2 trillion) Makes up 40% of WTO membership Diverse membership – developed, developing countries, LDCs, transit states, key trade gateways, small island states Varying ICT requirements for transport and trade…

3. Introduction Mandate to assist countries to improve their export competitiveness through, inter alia Support to effectively implement international standards in trade facilitation and customs valuation

4. Trade Facilitation and Competitiveness International business requirements Transparency Efficiency Uniform operating procedures for the cross border transportation of goods

5. Trade Facilitation and Competitiveness Estimates are that the average customs transaction involves 20-30 different parties,40 documents, 200 data elements and re-entry of up to 70% of all data at least once. Modern business environment requires JIT production and delivery Traders need fast and predictable release of goods

6. Trade Facilitation and Competitiveness National/development imperatives Administrative barriers discourage SMEs from exporting (NB.in some economies SMEs account for 60% of GDP creation) Inefficiencies in customs and transport impede integration in the global economy resulting in: Reduced export competitiveness Reduced inflows of FDI Negative effects on the cost of doing business

7. Trade Facilitation and Competitiveness Specific Trade Facilitation problems facing African countries Landlocked countries reduced competitiveness because of distance from coast and major markets Poor infrastructure Inadequate legal environment High transport costs 75% of value of exports go to transport eg transit charges, road tolls,excessive deposits and forwarding fees

8. Why Trade Facilitation for Competitiveness? Direct benefits Potential medium term revenue gains estimated at 2 –3% of the total value of traded goods (UNCTAD) Gains from TF range from 0.04% and 2.3% of GDP for facilitation of trade in goods while reduction in trade costs vary from 0.21% to 10% (OECD) Improving capacity in global TF could increase world trade in manufactured goods by est. $377billion or 9.7% (World Bank) Eliminating red tape at borders could generate 2 x gains to GDP than liberalising tariffs (APEC)

9. Trade Facilitation: Definition No standard definition in public policy circles Broad definition: ‘Streamlined regulatory environment,deeper harmonisation of standards and conformance to international regulations’ Narrower definition ‘Improved efficiency in the administrative procedures and logistics at ports and customs’

10. Trade Facilitation in the WTO In the WTO , trade facilitation has a more specific and limited focus – and is the subject of several provisions and obligations: GATT Articles V, VIII and X Agreements on Customs Valuation,Import Licensing, Pre-shipment Inspection Rules of Origin Technical Barriers to Trade Sanitary and Phytosanitary Measures

11. Trade Facilitation in the WTO Specific focus of the WTO Trade Facilitation Negotiations - clarifying: GATT Article V (freedom of transit) GATT Article VIII (fees and formalities connected with importation and exportation) GATT Article X (publication & administration of trade regulations)

12. Technical Assistance and Capacity Building Two examples with particular relevance to Key Strategies for ICTs in Transport and Trade Mozambique Customs (Strategic Assessment Report) Kenya (National Trade Facilitation Strategy)

13. Technical Assistance and Capacity Building Mozambique: To provide independent advice to the Mozambique Directorate of Customs on competitiveness of its trade facilitation information technology (IT) efforts viz risk management, transit management and customs valuation Output: A strategic proposal for the Directorate of Customs with an action plan and an implementation schedule for improvements to address any gaps identified in the strategic review

14. Technical Assistance and Capacity Building- Project design Diagnostic study and gap analysis Regional benchmarking workshop on ICTs for trade and transport held in Maputo Workshop reviewed trade facilitation ICT implementation good practices from customs authorities in Africa and Asia Presentations made by peers and senior executives from Customs Authorities in South Africa, Mauritius, Ghana, Senegal, Kenya, Cape Verde, Zambia, Uganda, Democratic Republic of Congo, Singapore Trade exhibition by international ICT suppliers and service providers Involvement of the private sector all the way

15. Technical Assistance and Capacity Building - Project design Recommendations for best practice viz: The declaration process The clearance process Risk management Valuation and classification Transit management Service Standards Public Private Partnerships ICTs incl. SEW, and ICMS

16. Technical Assistance and Capacity Building Kenya To help Kenya improve its trade competitiveness Main output: A trade facilitation strategy Other outputs: A study on the administrative barriers to trade in Kenya and the cost of addressing constraints A Community Based System for the Port of Mombassa A framework for a one-stop shop A handbook on importing and exporting to Kenya + FAQs Capacity building (training in trade facilitation) for brokers, freight forwarders, shipping agents

17. Technical Assistance and Capacity Building-Project design Objective of CBS: to reduce time and cost $$$ to process documentation for external trade and to clear goods Vision based on general EDI Will function as an e-platform linking all key stakeholders in trade documentation process (Single Window Concept) Builds on several ICT initiatives under way by major agencies as well as Government plans for an e-government strategy • C

18. Technical Assistance and Capacity Building- Role of Stakeholders Trade transactions require inputs from different public and private agencies Initiatives need to involve all stakeholders To achieve effective reform a partnership approach is needed Key stakeholders: Government and its agencies Service providers Trade Associations Traders themselves Formation of a Chief Executives' Forum Also formation of a ‘Project Core Team’ • C

19. Trade Facilitation Reforms…driven by stakeholders Creation of a one stop shop for document processing Harmonisation of working hours Improvement of document dispatch frequency Enforcement of joint cargo verification Standardisation of levies Reduction in number of documents, photocopies Reduction in number of release/stop stamps Introduction of a master register Elimination of exit pass Public to be educated on standards of imports into the country Computerisation • C

20. Lessons for the future • Is the problem clear? • Project design and methodology • International standards • Managing expectations • Absorption capacity issues • Political will • Are there potential partners for implementation elements? • Project Champion • Role of Logistics and Business Environment Benchmarking Tools

21. Conclusion WTO trade facilitation negotiations will further define technical assistance and capacity building support required by developing countries to implement commitments, including designing and implementing ICT strategies for trade and transportation

22. Conclusion The Commonwealth Secretariat Provides expertise for needs assessment for Trade Facilitation (TF) and cost benefit analyses, benchmarking studies in TF and customs valuation, strategic reviews Collaboration with other agencies – WCO, World Bank, DFID et al Small donor but can be important catalyst

23. www.thecommonwealth.org/sasd a.strachan@commonwealth.int Thank you