Trade Facilitation (TF) and its
Economic Benefits
Serguei Kouzmine
UNECE GTS
8 December 2010
1
Recent trends
in 2009 the global economic crisis
sparked a 12.2% contraction in the
volume of global trade.
Ratio of world exports of goods and commercial
services to GDP, 1981-2009
(Index 2000=100)
The largest such decline since World
War II.
Source: IMF for world GDP, WTO Secretariat for world trade in goods
and commercial services.
Importance of trade facilitation
« International Trade is one of the most important
arenas in which we must combat the real effects of the
crisis. Trade itself is a stimulus. »
Source: Simon Crean, Australian Minister of Trade
« Where the trade environment is more favorable,
businesses are better positioned to take advantage of
new opportunties, to grow and to great jobs when the
global economy picks up again. »
Source: WB, World Business Report, 2010
….But in many economies cumbersome trade procedures, long
delays and high trading costs continue to stifle trade potential.
Where is trading easy—and where not?
Easiest
RANK
Most difficult
RANK
Singapore
1
Niger
174
Hong Kong, China
2
Burkina Fasu
175
United Arab Emirates
3
Burundi
176
Estonia
4
Azerbaijan
177
Finland
5
Tajikistan .
178
Denmark
6
Iraq
179
Sweden
7
Congo Rep.
180
Korea, Rep.
8
Kazakhstan
181
Norway
9
Central African Rep.
Afghanistan
Israel
Source: Doing Business database.
10
Doing Business Report 2011
Ranking indicators:
•
Documents to export &
import
182
•
Time to export & import
183
•
Cost to export & import
Data exchange in International Trade
Purchase
Exportation
Importation
• 20 actors
• > 200 data elements;
(60-70% re-keyed at
least once, 15% retyped up to 30 times)
• Manual procedures;
• Multiple data
systems;
• > 30 documents or
messages.
Bill of lading, Documentation
Vessel Booking Request
Confirmed Line of Credit
Importer’s
Bank
Vessel Booking Confirmation
Exporter’s
Bank
Original B/L,
Invoice, PO,
Packing List
Fund Transfer
Line of Credit
Proforma Invoice
Rated Bill of Lading
LC
Confirmation
Letter of
Instruction
Invoice, PO
Shipping & funding detail
Release/Hold
Notice
Inland
Carrier
Manifest
Dock receipt
Export Declaration
AES
Cargo
Status
Customs House
Broker
Pick-up & Delivery Order
Shipping & Funding Detail
Marine
Insurance
Company
Demurrage
guarantee &
payment
Dock receipt
Freight Forwarder /
NVOCC
Import
Terminal
Operator
Ocean Carrier
Export
Terminal
Operator
Exporter
Proforma Invoice
Arrival Notice
Dock Receipt
Purchase Order
Importer
Release/Approval
Bill of Lading
Import
Docs
Cargo
Status
Pick-up &
Delivery Order
Inland
Carrier
Customs ( Import
)
Vessel Manifest
Export Declaration
Port
Customs (Export)
Importer Notice
Converted Vessel
Manifest
Source: UNCTAD 2006
Too many documents…













Enquiry
Order
Despatch advice
Collection order
Payment order
Documentary credit
Forwarding instructions
Forwarder's invoice
Goods receipt
Air waybill
Road consignment note
Rail consignment note
Bill of lading












Freight invoice
Cargo manifest
Export licence
Exchange control doc.
Phytosanitary certificate
Veterinary certificate
Certificate of origin
Consular invoice
Dangerous goods declaration
Import licence
Customs delivery note
TIR carnet
Source: UNCTAD 2006
Number of documents to export and
import
Documents to Export (number)
Region
Documents to Import (number)
DB 2011
DB 2007
DB 2011
DB 2007
OECD high income
4.4
4.5
4.9
5.2
East Asia & Pacific
6.4
6.8
6.9
7.5
Latin America & Caribbean
6.6
6.6
7.1
7.3
Middle East & North Africa
6.4
7.5
7.5
8.6
Eastern Europe & Central Asia
6.4
7.1
7.6
8.5
Sub-Saharian Africa
7.7
8.3
8.7
9.3
South Asia
8.4
8.5
9.0
9.4
Global Average 2010
6.5
7.3
Source: World Bank Doing Business 2011
Time to export and import
Time to Export (days)
Region
Time to Import (days)
DB 2011
DB 2007
DB 2011
DB 2007
OECD high income
11
11
11
12
East Asia & Pacific
23
24
24
26
Latin America & Caribbean
18
22
20
27
Middle East & North Africa
20
25
24
32
Eastern Europe & Central Asia
27
32
28
34
Sub-Saharian Africa
32
37
38
45
South Asia
32
35
33
38
Global Average 2010
23.1
25.8
Source: World Bank Doing Business 2011
What do traders want ?
 Simple and smooth processing of formalities
 Means to allow goods to proceed promptly to their final
destination. No longer itineraries, no unpacking, no delays
 A single control point for all public services
 Standard forms, assembled into a ‘single bunch of documents’,
compatible with trade documents and transport contracts
 Predictable and transparent rules and procedures
Source: UNCTAD
TRADE FACILITATION
Simplification
Process of eliminating
all unnecessary
elements and
duplications in
formalities, processes
and procedures
CSDAT
Aug 2010
Source: UNECE, UNCTAD
Harmonisation
Alignment of national
procedures, operations
and documents with
international
conventions, standards
and practices
Standardisation
Process of developing
internationally agreed
formats for practices
and procedures,
documents and
information
10
The economic benefits of TF
By reducing trade related transaction costs, delays at the
borders, number of documents required,improving custom
administration……., trade facilitation:
 Fosters businesses’ competitiveness
 Increases trade volumes and gains
 Raises countries’ GDP
 Boosts government tax revenues
Some evidence….
Worldwide
 Trade related transaction costs are estimated to lie between 2 and
15% the value of imported goods (OECD 2001, 2003)
 Each 1% reduction of such costs is worth up an economic prize of
USD 43 billion worldwide (OECD 2003)
Some evidence (con’t d)…
In APEC
 If APEC members, who perform below average, were able to
improve their TF performance to half the APEC average, intraAPEC trade could increase by USD254billion and raise average
APEC region GDP by 4,3 % (Wilson et al. 2004)
 If APEC members would reduce border delays by 1 day, they
would increase exports by 1% (Martinez-Zarzosa et Marquez-Ramos 2008)
Towards smart regulation
Over the past 5 years, economies that rank high
on the ease of trading across borders have:
1.
Introduced or improved electronic data interchange systems
2.
Introduced or improved risk-based inspections
3.
Improved customs administration
4.
Reduced number of trade documents
5.
Improved procedures at ports
6.
Introduced or improved single window
7.
Implemented border cooperation agreements
Source: WB, World Business Report, 2010
Opening a single window (SW)
in Singapore & Korea
●
In Singapore, the SW System (Trade Net) allows the business community to:
 submit 100 % of trade applications (9 mln per year) to all concerned government
authorities
 with a processing time of 10 minutes
●
In Korea, the SW System:
 Processes 80% of all import applications (3,000 per day)
 It is s used by 17 participating organizations and about 16,068 businesses from the trade
community (as of December 2009).
●
In both countries Firms’ savings in labor, printing, paper delivery, storage,
inventory costs, etc. amount to approx US$ 1 billion per year
.
Source: UN/CEFACT Single Window Repository 2010
Россия в рейтинге
«doing business»
Беларусь
Казахстан
Россия
Простота ведения бизнеса
58
63
120
Открытие бизнеса
7
82
106
Разрешение на строительство
44
143
182
Наём работников
32
38
109
Регистрация собственности
10
31
45
Получение кредита
113
43
87
Защита инвесторов
109
57
93
Уплата налогов
183
52
103
Трансграничная торговля
129
182
162
Исполнение договоров
12
34
19
Закрытие бизнеса
74
54
92
Как видят Россию?
 « Индекс развития ИКТ » - Россия - 48 место
(Швеция-1; Германия-13; Франция-18:
Беларусь-55; Казахстан-69; ..)
 « Индекс логистики » -Россия- 94 место
(Германия-1; Швеция-3; Франция-17;
Казахстан-62; Украина-102; ..)
 « Делать бизнес» - Россия - 120 место
(Сингапур – 1; США – 4; Германия – 25; Франция –
31; Беларусь- 58; Казахстан –63,..)
In summary
Trade facilitation:
 Gives businesses a competitive edge
 Allows greater integration in the global economy
 Enhances government revenues
Contacts:
Sergei Kouzmine
UNECE Global Trade Solution Section
serguei.kouzmine@unece.org
www.unece.org/trade