Syed Saifuddin Hossain Senior Research Associate, CPD

1. CENTRE FOR POLICY DIALOGUE (CPD) B A N G L A D E S H a c i v i l s o c i e t y t h i n k – t a n k Regional Consultation on Trade Facilitation Needs Assessment in South Asia Kolkata; 17 June 2006 presentation on Trade Facilitation Needs Assessment in Bangladesh: Perspective of the Civil Society presented by Syed Saifuddin Hossain Senior Research Associate, CPD

2. Outline of the Presentation • Introduction • Trade Facilitation in the WTO • Trade Facilitation Needs Assessment in Bangladesh • Recommendations for Future Negotiations on Trade Facilitation • Concluding Remarks Saif-CPD 2006: TF and Civil Society

3. Trade Facilitation Simplification Harmonisation Standardisation Elimination of unnecessary elements and duplications in formalities, processes and procedures Alignment of national procedures, operations and documents with international conventions, standards and practices Developing internationally agreed formats and practices and procedures, documents and information I. Introduction Trade Facilitation: A Coherent Approach Source: Hossain (2005) Saif-CPD 2006: TF and Civil Society

4. I. Introduction…Cont’d Perceived benefits from Trade Facilitation For the trading community - Imports: reduction in overall delivered cost - Exports: increased competitiveness through reduced transaction costs For service providers - new options for improved door-to-door logistics For public sector - increased customs revenue and greater control Saif-CPD 2006: TF and Civil Society

5. II. Trade Facilitation in the WTO Existing Legal Texts GATT 94 • Article V: Freedom of transit • Article VIII: Fees/formalities connected to import/export • Article X: Publication and administration of trade regulations Saif-CPD 2006: TF and Civil Society

6. II. Trade Facilitation in the WTO…Cont’d Major Milestones • Singapore Ministerial (1996): Inclusion in the WTO agenda • Doha Ministerial (2001): Negotiations to take place after the 5th Ministerial • Cancun Ministerial (2003): Developing countries once again out-maneuvered; Trade Facilitation side-lined. • July Framework (2004): Specific negotiating modalities adopted • GC Meeting (July 2005): Commitment continues for further negotiations • Hong Kong Ministerial (December 2006): New bottle, same old wine Saif-CPD 2006: TF and Civil Society

7. II. Trade Facilitation in the WTO…Cont’d July Package (August 2004) Least-developed country Members will only be required to undertake commitments to the extent consistent with their individual development, financial and trade needs or their administrative and institutional capabilities. Livingstone Declaration (June 2005) Operationalising the flexibilities agreed in the Modalities for Negotiations on Trade Facilitation. Full and faithful implementation of the Modalities for Negotiations on Trade Facilitation that ensure adequate financial and technical assistance and capacity building including support for infrastructure development of LDCs, through coordinated and sustained flow of funding that also address cost implications of proposed measures affecting LDCs. Saif-CPD 2006: TF and Civil Society

8. II. Trade Facilitation in the WTO…Cont’d July 2005 GC Meeting: Report of the TNC Chair For Trade Facilitation, S&DT and support for capacity building will need to be a particular focus in the upcoming negotiations. Hong Kong Declaration (December 2006) Agreement on the issue that implementation by LDCs of their obligations or commitments will require further technical and financial support directly related to the nature and scope of such obligations or commitments, and direct the WTO to coordinate its efforts with donors and relevant agencies to significantly increase aid for trade-related technical assistance and capacity building. Saif-CPD 2006: TF and Civil Society

9. III. Trade Facilitation Needs Assessment in Bangladesh Decomposition of Bangladesh’s External Sector Performance Source: CPD Database FY05 vis-à-vis FY90: Total trade grew by 4 times Saif-CPD 2006: TF and Civil Society

10. III. Trade Facilitation Needs Assessment in Bangladesh …Cont’d The process of trade liberalisation in Bangladesh • First Phase : FY1982-FY1986 • Second Phase : FY1987-FY1991 • Third Phase : FY1992 onwards Degree of Openness in Bangladesh Source: CPD Database Saif-CPD 2006: TF and Civil Society

11. III. Trade Facilitation Needs Assessment in Bangladesh …Cont’d Recent achievements in Trade Facilitation • Introduction of PSI: Physical inspection of consignments reduced from 100% in 1999 to 10% in 2002. • Reduction in number of signatures: 25 in 1999 to 5 at present. • Export clearance time for 95% of consignments has been reduced from 72 hours in 1999 to 3 hours in 2002. • Introduction of Direct Trader Input (DTI) facility in September 2003 • Establishment of Trial Centre has simplified documentation processing. Saif-CPD 2006: TF and Civil Society

12. III. Trade Facilitation Needs Assessment in Bangladesh …Cont’d Most Problematic Factors in Conducting Trade Source: Bhattacharya and Hossain (2006) Saif-CPD 2006: TF and Civil Society

13. III. Trade Facilitation Needs Assessment in Bangladesh …Cont’d Identifying Trade Facilitation Needs and Priorities in Bangladesh Source: Bhattacharya and Hossain (2006) Saif-CPD 2006: TF and Civil Society

14. III. Trade Facilitation Needs Assessment in Bangladesh …Cont’d Qualitative Assessment of the Cost of Implementing Selected TF Measures Source: Bhattacharya and Hossain (2006) Saif-CPD 2006: TF and Civil Society

15. III. Trade Facilitation Needs Assessment in Bangladesh …Cont’d Major concerns in view of the on-going negotiations in the WTO • For most LDCs and developing countries, implementation of trade facilitation obligations negotiated in the WTO may involve broad and detailed domestic customs and trade administration reforms. As a result, LDCs will require substantial technical and financial assistance from developed countries and international organisations in order to fulfil their obligations. • In addition, there is increased concern among LDCs that dispute settlement procedures could be used against them simply because they lack the technical and financial capacity to implement their obligations on trade facilitation. It is, thus, of crucial importance for Bangladesh and other LDCs that any negotiation on trade facilitation in the WTO is carried out with due recognition of the constraints and limitations of the LDCs. Saif-CPD 2006: TF and Civil Society

16. IV. Recommendations for Future Negotiations on Trade Facilitation • Any modality for identification of trade facilitation needs and cost must be finalised in consultation with the LDC Members. • With a view to realise full and faithful operationalisation of flexibilities (S&DT) agreed in the Modalities for Negotiations on Trade Facilitation, LDC Members will only be required to undertake commitments to the extent consistent with their individual development, financial and trade needs or their administrative and institutional capabilities. • Adequate financial and technical assistance and capacity building support for infrastructure development are the primary requirements for the LDCs to meaningfully integrate themselves into the global trade regime. Besides, sustained flow of funding is a crucial issue. Hence, members of the apex trade body must come up with needs-based assistance programme to take the current negotiations to any further milestone. • Flexibility, especially in terms of transitional periods, in implementing specific commitments in a progressive manner must be provided to the LDCs as part of the commitment of S&DT. Saif-CPD 2006: TF and Civil Society

17. IV. Recommendations for Future Negotiations on Trade Facilitation …Cont’d • Necessary technical assistance for harmonising and standardising documentation procedures will be an integral part of any agreement on trade facilitation. Successful implementation of international standards can significantly decrease and simplify import and export documentation requirements. • Detailed quantitative assessment in terms of cost implications in establishing enquiry points, and risk management and post clearance audit systems must be carried out prior to embarking upon any agreement. • Submissions by the developed Members as regards enforcement of legal obligations such as “binding advance rulings” is a major concern for the LDCs. Any agreement on such issues would mean that an act of non-compliance may expose LDCs like Bangladesh to WTO dispute settlement system. Saif-CPD 2006: TF and Civil Society

18. V. Concluding Remarks • Reactions by developing countries on GATT Articles have been generally very constructive. However, it needs to be seen how acceptable the proposals might eventually turn out to be. • Unity of the LDC front is a must to gain the most from the current round of negotiations. • LDC voice must be raised and demands pressed at every single forum. Saif-CPD 2006: TF and Civil Society

19. Thank You for Your Attention Saif-CPD 2006: TF and Civil Society