Asian development bank, ta 7356-Reg, developing cross-border economic zones between the Prc and viet nam

1. Cross Border Economic Zones: • Institutional Development and Capacity Building • Hekou, Yunnan, PRC-Lao Cai, Viet Nam • Pingxiang, Guangxi, PRC-Lang Son,Viet Nam Technical Assistance Inception Meeting, Nanning, Guangxi, PRC November 25-26, 2010 Robert L. Wallack, Institutional Development and Capacity Building Specialist, Unites States of America, robert.wallack@rlw-international.com Asian development bank, ta 7356-Reg, developing cross-border economic zones between the Prc and vietnam

2. I. Background II. Purpose III.Work Plan IV. International Examples V. Conclusion Contents

3. Border Trade Increasing Pingxiang, PRC-Lang Son, Viet Nam US $840 million (2007) Hekou, PRC-Lao Cai, Viet Nam US $477 million (2006);estimate: US $800 million (2015)ADB ---------------------------------------------- US $1 billion+: Langbang-Cao Bang (2007) Dongxing-Mong Cai ------------------------------------------- Total Enterprises Lang Son-697 Lao Cai-802 (Vietnam Statistics Office, 2009) Contributing to Trade CAFTA:1.9 b. people;US $4.5 trillion Nanning-Singapore Econ. Corridor Guangxi Beibu Gulf Economic Zone

4. ADB Ministerial Meeting North-South Economic Corridor (NSEC) by Developing Cross-Border Economic Zones (CBEZ): • Hekou, Yunnan, PRC-Lao Cai, Viet Nam • Pingxiang, Guangxi, PRC-Lang Song, Viet Nam Background

5. Borders are the Weakest Link along Corridors Institutional and Infrastructure Constraints: Cross-Border Transport Agreement (CBTA) Coordination and Capacity Among Agencies Private Sector Participation and Investments Facilities, Equipment, Modern IT & C Systems Uneven Development Across Borders: Dry Ports: CAFTA Pingxiang Logistics Park background

6. Institutional Development & Capacity Building Build Effective and Functioning CBEZs by: Establishing PRC-Viet Nam Joint Committees Organize Training, Study Tours, Workshops Main Topics: Planning, Design, Management, Operations, Awareness of ADB Programs,other international organizations, and Concepts (marketing, investment promotion, supply chain) purpose

7. Joint Commission/Committee/Subcommittees for Collaboration, Coordination and Interfaces by regular meetings and by electronically involving all public and private stakeholders for CBEZs -Clearly defined roles & responsibilities to implement the CBTA and CBEZ (central:local) -transport, trade, commerce, finance, ports, logistics environment,Customs, inspections,phytosanitary, & private sector, financial companies, banks, international organizations- so that all are “on the same page” Purpose

8. Our Joint CBEZ Institution is building on the: Economic Corridors Forum, GMS Ministers, 2008 NSEC Enhanced Organizational Effectiveness for Developing Economic Corridors which is to: Serve as a venue for networking and sharing of information and views among central and local officials, business people and international agencies on strategies, approaches, programs and projects to accelerate economic corridor development Only meets yearly: Joint Committees of CBEZ to confer regularly purpose

9. Joint CBEZ Institution & 4 Layers of Main Issues: 1.) Intergovernmental Agreements • Hekou-Lao Cai and Pingxiang-Lang Son CBTA 2.) Institutional • Customs, Inspections, Land, Envir., Investment 3.) Infrastructure • Roads, yards, facilities, utilities 4.) Operational • Processes, material handling,WWW, performance measurements (ADB, World Bank) Purpose

10. Work Plan

11. North America: U.S.A.-Canada 5,552 miles of cross-border trade: $1 million of good/services cross the border each minute ($1.5 billion/day; over $500 billion/year (2003)-128 border crossing Cross-Border and Corridor Cooperation International Mobility & Trade Corridor Project CAN/AM Border Trade Alliance Ports to Plains Trade Corridor North America’s Corridor Coalition (NASCO) economic development organization International examples

12. U.S.A.-Mexico: 2,000 miles of cross-border trade -Cooperation between developed-developing San Diego-Tijuana-San Diego Free Trade Zone-maquiladora/TVs/power plant/LNG-California McAllen Foreign Trade Zone-30 years/F. 500s -Reynosa, Mexico to markets:C. and South America CANAMEX Trade Corridor: 1,700 miles-US funds US $1 billion produce/1,200 truckloads of crops/yr. Investment: U.S FDI-Canada $273.7 billion (2006) International Examples

13. International Mobility Trade Corridor Project Suggested Institutional Framework Funding Sources 1999-2009 ($38 million) US Federal Highway-$7.1 million-50% Transport Canada-$2.6 million-19% B.C. Province $2.4 million-17% WA State-$1.3 million-10% Local B.C. & WA-$180,429-!% Other $375,000-3%

14. Private Sector Participation at Border Crossing Federal Express Corporation at U.S.-Mexico FedEx Transborder Distribution Service: El Paso,Texas-Ciudad Juarez, Mexico Border Cross Supply Chain Solution to simplify transportation, distribution and brokerage for traders at borders FedEx on line tools/automation; consolidate invoices: cargo from maquila to U.S. in 1-5 days International examples

15. Lessons Learned in Establishing Institutions: - One single organization with clear mandate to regulate the CBEZ operations • Autonomous and independent decision-making in setting policy for quick implementation • Close relationship with other national agencies with mechanisms for coordination • Close relationship with the private sector • Promotional rather than regulatory mindset (USAID Report on Assessing FTZ Program,2004) International examples

16. Inner Mongolia Highway and Trade Corridor Russia-Manzhouli-Hailar Cargo Transfer Terminal • Baotou, Inner Mongolia Inland Container Depot Operational Difficulties for Lack of Marketing Plan & Strategy (Advertising-Pricing of Services) • China-Kazakhstan Horgos International Border Cooperation Center-mutual exchange in planning, design, construction, management and operations 2012 to 2018: 528 hectares (185 KAZ-343 PRC) International examples

17. conclusion • I.Cross-Border Trade is Increasing: • Pingxiang-Lang Son and Hekou-Lao Cai: Markets • II. CBEZ initiative by ADB GMS NSEC development • Constraints at the border-crossing are overcome by better organization of the public and private sectors • The Work Plan for TA 7356-RETA: public and private sectors determine best practices to apply to the situation • V. Establish /Implement Institutions with Targeted Training

18. Thank You Question & Answers with Discussion Asian Development Bank, TA 7356-REG Robert L. Wallack, Institutional Development and Capacity Building Specialist, United States of America, robert.wallack@rlw-international.com