Trade facilitation in Central Asia: A regional perspective

1. Seminar on Trade Facilitation at the Border in Central Asia 11-13 May 2009, Dushanbe, Tajikistan Trade facilitation in Central Asia: A regional perspective Mr. Peng Bin Economic Affairs Officer Trade Facilitation Section Trade and Investment Division ESCAP

2. Trade in Central Asia: An overview • The growth of international merchandise trade is above the world’s average in recent years • International merchandise trade volume is still small • The rank in world merchandise export among 180 economies: Afghanistan 160, Kyrgyzstan 141, Tajikistan 131, Uzbekistan 86, Turkmenistan 81, Azerbaijan 78, Kazakhstan 51 (WTO, 2007) • High percentage of fuels and mining products in export and manufactures in import • High trade dependence • Trade to GDP ratio 65 – 105% • Low level of intra-regional trade

3. Trade to GDP ratio, 2005-2007 Sources: WTO, 2008

4. Intra-regional trade in Central Asia Matrix of import shares, 2007 (change from 1995 in brackets) Source: ESCAP Commission paper based on IMF (2008)

5. Constraints of doing business • SPECA countries are among the most remote countries, the distance to the closest seaport • More than 2000 km for Afghanistan • 3750 km for Kazakhstan • 3600 km for Kyrgyzstan • 3100 km for Tajikistan • 2950 km for Uzbekistan • High trade costs in doing business • Transport costs • Cost of transportinga container from an LLDC to a developed countryport was about US$4,500, about 20% more than from a coastal country (World Bank) • Transport costs in the CIS-7 are at least three times higher than in the developed countries (Corporate Technologies Center) • Trade procedures compliance costs, including transit procedures

6. Constraints of doing business Timeliness: Perceived likelihood of on-schedule delivery(Subregional averages; 5: nearly always on schedule) Source: Based on data from the World Bank Logistic Performance Index (2007)

7. Constraints of doing business Complicated trade procedurescomparison with China, India and Thailand Source: Compiled based on Trading Across Border, World Bank (2009)

8. Constraints of doing business Logistics to be improved Logistics performance index rank in Central Asia Source: Logistics Performance Index, World Bank (2007)

9. Constraints of doing business Transit procedures and costs

10. Constraints of doing business Border checks: Cross border road freight transport Source: ESCAP, 2007

11. Trade facilitation in Central Asia Trade facilitation: Why it becomes important? • With the elimination tariff barriers, importance of removing non tariff barriers increased • Movement of trade facilitation from technical issue to policy issue, particularly the adoption of trade facilitation into WTO negotiations • Inherent linkage between trade liberalization and facilitation, such as Customs clearance of tariff preferential goods under FTAs and RTAs • Technical development, particularly use of IT in trade administration • Market requirements – reduction of costs and timely delivery becomes a prerequisite to participate into global and regional supply chain

12. Reduced trade costs and time Aligned and transparent trade policies and regulations Simplified trade procedures and documents Improved institutional quality and governance Improved trade infrastructures Institution • Institutional structure • Bureaucracy • Corruption and illegal payment Trade infrastructure • Transport and logistics infrastructure • Inspection facilities • Laboratory and test equipment • IT infrastructure • Financial infrastructure Trade policy and regulations • Align trade policies and regulations with international agreements (remove TBT and other NTBs) • Transparency of trade policies and regulations Trade documents and procedures • Quality of trade documents • Process of flow of information • Means of conveying trade documents and data including the use of IT facilities Trade facilitation in Central Asia Facilitate trade: What can we do?

13. Bangladesh, Bhutan, India Maldives, Nepal, Pakistan, Sri Lanka SAARC (SAFTA) SPECA Turkmenistan Afghanistan Azerbaijan Kazakhstan Kyrgyzstan Tajikistan Uzbekistan Mongolia CAREC APEC China Canada, Chile, Hong Kong, China, Japan, Korea, Mexico, Peru, Russia, Chinese Taipei, United States Australia New Zealand Papua New Guinea GMS Cambodia Thailand Brunei Darussalam LaoPDR Vietnam Indonesia Myanmar Malaysia Philippines Singapore ASEAN (AFTA) Cook Islands Micronesia, Fiji Kiribati PIF (PICTA) Marshall Islands Nauru, Niue, Palau Samoa Solomon Islands Tonga, Tuvalu Vanuatu Trade facilitation in Central Asia Regional trade facilitation cooperation: Central Asia and other subregions

14. Trade facilitation in Central Asia Accession of Central Asian countries to international conventions

15. Trade facilitation in Central Asia National Coordination mechanism in SPECA

16. Faster border crossing Lower compliance costs for traders Reduce pressure on the infrastructure Improve institutional and human capacity Good governance and anti-corruption Costs savings for regulatory agencies Trade facilitation in Central Asia Benefit of coordination and cooperation of border agencies

17. Trade facilitation in Central Asia Tools and instruments for border management • UNECE instruments • United Nations Layout Key for Trade Documents (UNLK, ISO 6422) • United Nations Trade Data Elements Directory (UNTDED, ISO 7372) • United Nations Electronic Data Interchange for Administration, Commerce and Transport (UN/EDIFACT) • UN/CEFACT Single Window • The International Convention on the Harmonisation of Frontier Controls of Goods • WCO instruments • WCO SAFE Framework • UNCTAD • The Automated System for Customs Data (ASYCUDA)

18. Thank you Seminar on Trade Facilitation at the Border in Central Asia 11-13 May 2009, Dushanbe, Tajikistan pengb@un.org