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Freight Logistics as an engine of growth Challenges Trade facilitation scenario

Freight Logistics as an engine of growth Challenges Trade facilitation scenario. FIATA RAME 2016 20 May 2016 Addis Ababa. Poul Hansen poul.hansen@unctad.org UNCTAD. Trade facilitation. Consensus building. UNCTAD UN’s organization for Trade and Development. Capacity Building.

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Freight Logistics as an engine of growth Challenges Trade facilitation scenario

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  1. Freight Logistics as an engine of growthChallengesTrade facilitation scenario FIATA RAME 2016 20 May 2016 Addis Ababa Poul Hansen poul.hansen@unctad.org UNCTAD

  2. Trade facilitation Consensus building UNCTAD UN’s organization for Trade and Development Capacity Building Research and analysis THINK DEBATE DELIVER

  3. How much does it cost to import and export a 20ft container? Exportation Importation 520$ 530$ Top 5 performing countries x2 x2 2,380$ 2,960$ x12 x16 Ethiopia 6,400$ 8,700$ 5 worst performing countries Source: Doing Business 2015

  4. 44% of transport costs can be related to cross-border inefficiencies Transport costs breakdown on the northern corridor (% of total transport cost) Direct and Indirect costs due to cross-border inefficiencies Source: Analytical Comparative Transport Cost Study Along the Northern Corridor Region, CPCS, June 2010

  5. Source: Transport Intelligence

  6. Source: World Bank Logistics Performance index

  7. Top/bottom TF measures by implementation Source: UNCTAD

  8. Trade Facilitation and Competitiveness • Clearance times are key determinants of foreign investment, export status and productivity • For integration into global value chains efficient importationis as important as exportation • Inefficient trade practices and complex procedures significantly reduce the ability to successfully integrate to global value chains. • Trade costs are a crucial ingredient for competitiveness and FDI • Economic development is key to general development

  9. Transparency and efficiency in international trade supply chain with the objective to reduce time and costs of cross-border procedures through: Simplification, Standardisation, Harmonisation Modernisation An ongoing and multi-agency function Only achieved through collaboration between public and private sector Trade Facilitation is… • WTO defines Trade Facilitation as: • “Simplification and harmonization of the activities, practices and formalities involved in collecting, presenting, communications and processing data required for the movements of goods in international trade”

  10. Implementation of the TFA will reduce trade costs in all regions Estimated reductions in ad valorem tariff equivalent trade costs due to TFA implementation (%) Source: WTO Secretariat calculations, WTO World Trade Report 2015

  11. Studies estimate that implementation of the TFA will lead to export and GDP growth… WTO ICC OECD Other1 Export growth +750 to 1,000 billions $ 1,000 billions $ 1,000 to 1,500 billions $ NA GDP growth +0.35 to 0.55 % growth +960 billions $ +40 billions $ +0.50 % growth 1.Ferrantino and Tsigas (2013), Hufbauer and Schott (2013); World Trade Report 2015

  12. Structure of the Trade Facilitation Agreement Preamble Section I - Substantive Provisions TFA Articles Scope GATT articles Articles 1 to 5 Transparency Article X Articles 6 to 10 Fees and Formalities Article VIII Article 11 Transit Article V Article 12 Customs Cooperation na Section II - Special and Differential Treatment Section III – Institution al arrangements and final provisions

  13. Review of TFA articles 1 to 10 Transparency Articles (1-5) 1 - Publication and availability of information 2 - Prior publication and consultation 3 - Advance Rulings 4 - Appeal or Review Procedures 5 - Other measures to enhance impartiality, non-discrimination and transparency Fees & Formalities (6-10) 6 - Disciplines on fees and charges imposed on or in connection with importation and exportation 7 - Release and clearance of goods 8 - Border agency co-operation 9 – Movement of goods under customs control intended for export 10 - Formalities connected with importation and exportation and transit

  14. Review of TFA other articles Article 11: Freedom of transit Article 12: Customs Cooperation Section II Special and Differential Treatment • Dedicated workshop session (Session 3) Section III: Institutional Arrangements & final provision • Article 23.1: Trade Facilitation Committee • Article 23.2: National TF Committee

  15. WTO TFA situation as of today • TFA agreed in Bali and finalized in November 2014 • Members to go through their internal processes for categorization and treaty ratification process and notify acceptance of protocol to WTO • The Protocol will be open open-ended. • The Agreement will enter into force once 2/3 of the WTO Members ratify it

  16. WTO TFA situation as of today • 79 countries have ratified the Agreement (108 necessary) • 81 countries have notified Category A • 3 countries have notified Category B • 3 countries have notified Category C

  17. Challenges and opportunities for the Logistics industry of the WTO TFA • Is Trade Facilitation in the interest of all sectors of the Logistics Industry? Customs Brokers? • Is transparency and simplification an advantage? Single Window! • WTO TFA provides growth potential for Logistics Industry! • More trade more Logistics business • How does the Logistics Industry engage and promote trade facilitation? • Public Private Partnership – National Trade Facilitation Committees – Training and capacity of members

  18. Thank You Division on Technology and Logistics Trade Logistics Branch Trade Facilitation Section www.unctad.org/TTL www.unctad.org/TransportNews

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