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Sustaining progress on trade facilitation : How Republic of Korea did it

Learn about the background and concept of paperless trade, the trade facilitation agenda, the UNCITRAL model law, and the establishment and dissemination of paperless trading system in Korea.

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Sustaining progress on trade facilitation : How Republic of Korea did it

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  1. Sustaining progress on trade facilitation : How Republic of Korea did it Sang-Hyeon Jo Korea Paperless Trade Office , KITA

  2. Table of Contents Background of Paperless Trade Concept of Trade Facilitation APEC’s Trade Facilitation Agenda UNCITRAL model law for Paperless Trade Paperless Trade in Korea Needs for Paperless Trade Establishment & Dissemination of Paperless Trading system Legal framework & Expected benefits Future tasks

  3. Background of Paperless Trade

  4. Concept of Trade Facilitation • Trade Facilitation • Impediments in general • Customs administration • Standards and technical regulations • Barriers to the mobility of business people • Business facilitation • Cutting red tape • - Simplification of procedural and administrative • impediments to trade

  5. Concept of Trade Facilitation • Why is it difficult to implement? • Nevertheless, we have to go on. Why? • 1. Essential but not attention grabbing • 2. Highly technical • 3. Painstaking to reform • 4. Expensive to implement Trade Facilitation reflects the economy as a whole. Based on APEC research it will add 0.25% of real GDP to APEC member economies.

  6. APEC’s Trade Facilitation Agenda • 4 facilitation areas • Customs procedures • Standards and Technical regulations • Labor mobility • e-Commerce • Importance of e-Commerce for Trade Facilitation • Having great potential by developed IT infrastructure • Providing efficient electronic working environment • Modernizing customs administration • Reducing administration delays

  7. UNCITRAL model law • UNCITRAL • United Nations Commission on International Trade Law • Organization for enacting commercial law on international trade and transactions • ICTs - related Laws • Model Law on Electronic Commerce(1996) • Model Law on Electronic Signatures(2001) • Convention on the Use of Electronic Communications in Electronic Contracts(2005) * ICTs - Information and Communications Technologies

  8. UNCITRAL model law • Merits of the e-Trade Platform • Reducing trade-related costs • Simplifying administrative processes • Establishment of the e-Trade Platform • Principal agent • Formal agreement defining roles & responsibilities • End user agreements

  9. UNCITRAL model law • Processing data : mechanism must be commonly mutually recognized • Identification • Authentication • Authorization • Data protection : compliance with all relevant privacy and personal data protection laws • Access to data • Integrity of data • Accuracy of data

  10. UNCITRAL model law • Liability issues • Proper logging mechanisms - preventing reuse of wrong data - clarifying mistakes and forgery • Electronic signature - security mechanisms • Electronic documents - functional equivalence of electronic documents to paper documents - acceptance of their evidentiary value in court

  11. Paperless Trade in Korea

  12. Needs for Paperless Trade • Paperless Trade • Transactions without papers by electronic documents circulation preventing inconveniences from various kinds of trade documents • Background of Paperless Trade • drastic increase of time and extra charges by growing trade volume export import

  13. Establishment & Dissemination of Paperless Trading System • Milestone of Paperless Trade in Korea • Trade Automation Act(1989) • For national competitiveness by cutting costs through automated transaction system • Establishment of KTNET(1991) • A 100% investment holding subsidiary of KITA • Implementing IT based projects between public and private sector • the sole designated system operator for uTradeHub • a service provider of the national paperless trade system 1980’s Computerized Trade Data 1990’s EDI service (frame relay) 2000’s Online Marketing Present Paperless Trading System

  14. Establishment & Dissemination of Paperless Trading System • Promotion by public opinion • Consensus on online paperless trading system for easy access for work efficiency • Project for building a paperless trading system • Adoption as one of the e-Government projects • Aim : transferring VAN EDI-based trade automation system to Internet-based trading system • National e-Trade Committee (established in 2003) • - Chair person : 2003 ~ 2007 the prime minister • 2008 ~ present the minister of MKE • The Supervisory committee of the national paperless • trade system project

  15. Establishment & Dissemination of Paperless Trading System Paperless Trade Governance in Korea

  16. Establishment & Dissemination of Paperless Trading System • Korea Paperless Trade Office • Established in 2005 • The secretariat and PMO(Project Management Office) • of the National Electronic Trade Committee • consolidation between public and private sectors • KITA (established in 1946) • Korea International Trade Association • Korea's foremost trade promotion organization with • 65,000 member firms • Supporting Korea's business community • WTCS(World Trade Center Seoul), an access to one-stop business

  17. Establishment & Dissemination of Paperless Trading System Concept of uTradeHub

  18. Course of Actions • Establish e-Trade Platform, uTradeHub for all the trade related communities •  Link systems of banks, logistics and many other • related organizations Phase3 (’07~ ) • Build a trade portal for traders •  License/Certification/Clearance support system • Standardize documents • ebXML based document standardization Phase2 (’06) Phase1 (‘04-’05) • Build Core Infrastructure of e-Trade Platform •  u-Trade document circulation system •  e-L/C service system Establishment & Dissemination of Paperless Trading System

  19. Establishment & Dissemination of Paperless Trading System Public – Private Partnership • Policy & Law • Funding & Execution Roadmap • Project Leadership & Ownership • Integration • Standardization Body • Process Innovation Government • Service Development • Platform Operation • Global Network Related Parties Trusted Third Party Trading Partner • Paperless Trading • Enterprise IT Systems

  20. Foreign Trade Act Electronic Transactions Act Digital Signature Act Commercial Law (2007) Trade Automation Act (1991) e-Trade Facilitation Act (2005) • Legal framework • Enacted Trade Automation Act (1991) • Revised the Act into the ‘e-Trade Facilitation Act’ (2005) • Established a legal basis for circulation of e-Trade documents • Defined a role for service providers specializing in e-Trade • Revised Commercial Law (2007) • Introduced electronic bills of lading and specified operating rules, including title registry

  21. Legal framework • Foreign trade Act(1986) • - revised in 2009 • e-Trade Facilitation Act(1991) • - revised in 2009 • Digital Signature Act(1999) • - revised in 2008 • Electronic Transactions Act(1999) • - revised in 2009 • Commercial Law on electronic Bill of Lading(2008)

  22. Expected Economic Benefits Reduction of labor costs (263.3million USD) Economic benefits from Paperless Trade about 3 billion USD Reduction of printing costs (19.1million USD) Reduction of circulation and storage costs(271.9million USD) Productivity increase [554.3million USD] + Reduction of extra fees [2.11billion USD] + Reduction of redundant investment in the IT sector [318million USD] Reduction of warehousing costs (1.36billion USD) Reduction of inventory management costs (750million USD) Productivity Increase Reduction of extra fees Reduction of redundant investment in the IT sector (318million USD)

  23. Expected Economic Benefits Cost saving cases in Paperless Trade

  24. Future tasks

  25. Future Tasks How to find unexplored synergies in Paperless Trade • By a commitment of government for effective e-Commerce infrastructure • By simultaneous reforms in a number of sectors • By systems integration based on Public-Private Partnership • By entire trade transaction cycle ; not standard harmonization or customs modernization alone • By helping developing countries for entire systems integration

  26. Future Tasks Cooperation among countries • How do we build a partnership in borderless trade? • - Information sharing efforts about legal frame and IT infrastructure • - Constant progress reports of each project Joint projects • Why is Joint Project essential for e-Trade? - Consideration linking e-Trade Platform of each country - International support is necessary based on public and private partnership of each country - we need to define where we can initiate joint projects

  27. www.utradehub.or.kr Thank You!

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