Trade Facilitation
Catalyst for enhancing export
competitiveness
What is Trade Facilitation
‘The simplification and harmonization of
international trade procedures’
UN/CEFACT Definition
Simplification and standardization of procedures and
associated information flows required to move goods
across borders from seller to buyer and to pass
payment in the other direction
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What is Trade Facilitation
WTO
The simplification and harmonization of
international trade procedures”, where trade
procedures are the “activities, practices and
formalities involved in collecting, presenting,
communicating, and processing data required
for the movement of goods in international
trade
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Why is Trade Facilitation Important
Trade facilitation and logistics have become
an important policy area in development.
Supply chain constraints are now recognized
as a major impediment to export led growth.
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Why is Trade Facilitation Important
Large increase in international trade
Trade represents 30% of world GDP
Estimated to grow to 50% by 2020
Rapid development of information
technologies
Increase in bilateral and regional trade
agreements
Changing nature of internationally traded
goods
Increased cost of cumbersome and
unnecessary trade procedures
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Why is Trade Facilitation Important
United Nations has estimated the preparation
of trade documentation represents between
2% and 10% of the value of a typical
international trade transaction.
OECD has estimated potential annual
worldwide gains of $40 billion from just a 1%
reduction in trade transaction costs.
World Bank and UN estimates potential
savings at US $490,000,000,000.
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International Trade Scenario
Global trade is growing rapidly and since 1980 has grown at
CAGR ~ 9.3% (source WTO)
Traditionally trade processes businesses have not been
automated:
Largely manual, paper driven and error-prone processes in place
Not considered strategic
It's also complex due to:
Number of parties involved
Document requirements
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Changing regulations
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Benefits to Private Sector
Transparency & Predictability
Time
Customer Value
Improved Supply Chain Performance
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Benefits of Trade Facilitation
Private Sector
Single commercial framework for domestic
and international trade
Costs savings through improved supply chain
performance
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Benefits of Trade Facilitation
Private Sector
Simple, easy to use solutions spanning cost
effective, low end applications for SME to
advanced technology for large multinational
corporations
Enhanced competitiveness
Improved customer service
Better profitability
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Benefits to Public Sector
Security
Government Revenue
Economic Growth
Improved Competitiveness
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Benefits of Trade Facilitation
Public Sector
Advance
notification of trade information with
better quality data
Support for supply chain security initiatives
Enhanced official controls by better use of
resources
Improved
trader compliance
Ability to meet regional and international
commitments
Correct revenue yields
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Key Trade Facilitation Performance
Indicators
World Bank’s Doing Business - Trading
Across Borders
World Bank / IFC Logistics Performance
Index
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1 World Trade Indicators 2010 database at http://www.worldbank.org
2 Logistics Performance Index at
http://info.worldbank.org/etools/tradesurvey/mode1b.asp?cgroup=0&sorder=q10rank
Commonwealth Secretariat
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Trading Across Border
Trading Across Borders
is an aspect of the World Bank’s “Doing Business” survey
complies procedural requirements for exporting and importing
a standardized cargo of goods by ocean transport from the
contractual agreement between the 2 parties to the delivery of
goods
3 indicators are :
number of all documents required to export/import goods,
time necessary to comply with all procedures required to
export/import goods, and
cost associated with all the procedures required to
export/import goods
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Commonwealth Secretariat
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Logistics Performance Index (LPI)
The Logistics Performance Index (LPI) is
in-depth cross-country assessment of the logistics gap among
countries.
a comprehensive picture of supply chain performance - from
customs procedures, logistics costs, and infrastructure quality
to the ability to track and trace shipments, timeliness in
reaching destination, and the competence of the domestic
logistics industry
using a 5-point scale, the LPI combines > 5,000 country
evaluations
complemented by a number of qualitative and quantitative
indicators of the domestic logistics environment, institutions,
and performance of supply chains (such as costs and delays)
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How to be successful for Trade
Facilitation
To be successful in TF, there must be:
♦ Fulfil an identified need
streamlined import and export processes
♦ Provide an incentive
introduce trade legislative/regulatory reforms
♦ Offer a tangible benefit
cost savings
♦ Deliver a return on investment
improved cross-border movement
♦ Provide value added services
paperless reporting.
innovative programs responsive to changing transport &
trade practices
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Commonwealth Secretariat
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COMSEC Interventions
Trade Facilitation Projects
Trade Section
Comsec vision
‘To support Pro-Poor
polices for economic
growth and
sustainable
development in
member countries
Trade Section Mission
Improve Export Competitiveness
of member countries
Objectives
•To Improve Enabling Environment
• To Build Capacity for Market Development
•To Build Institutional Capacity
•To Strengthen Trade Facilitation
Focus Areas
• Export Development Strategies
•Sector Strategies
•Tourism
•Professional Services
•Trade Facilitation
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COMSEC
Trade facilitation is a cornerstone in the
Commonwealth’s goal to promote export
competitiveness
Trade facilitation is a cornerstone in the
Commonwealth’s goal to promote export
competitiveness
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Commonwealth Secretariat
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Areas of Interventions
Benchmarking and time release studies to
assess the competitiveness of a country’s
trade facilitation capacity
Improving the business climate
Comparative studies on the impact of
transport
Evaluate relative port efficiency
Audit supply chains
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COMSEC Projects
Country
Project
Objective
Outcome
Jamaica
Benchmark Jamaica's
Trade Facilitation
Systems Processes
To benchmark Jamaica’s
trade facilitation systems
and processes against
best practice countries
and international
standards
Developing Port
Community system and
Implementation of Single
window
Mauritius
Benchmarking customs
procedures
To improve the
competitiveness of
Mauritius through
benchmarking the
efficiency and
effectiveness of its
customs procedures.
South Africa
Benchmarking of South
Africa's Fruit Export Trade
Logistics Chain
Benchmarking study to
asses South Africa’s fresh
fruit export trade chain
against best practice
countries
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Commonwealth Secretariat
Recently concluded.
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Thank You
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