Trade Facilitation : A Catalyst for Change Mohammad Nahavandian, Ph.D. International Forum on Trade Facilitation UN/CEFACT May 2002

Trade Facilitation: A Catalyst for Change  Development Strategies and the Strategic View on Trade Facilitation  The Trade Facilitation Strategy in the e-Life Era: A Framework for Structural Change  The Experience of the Islamic Republic of Iran: A Case Model for Trade Policy Reform  Concerns and Challenges for Developing Countries  Lessons and Recommendations

I. Development Strategies and the Strategic View on Trade Facilitation Development Theories and StrategiesDevelopment Theories and Strategies Trade as the Engine of Growth TheoryTrade as the Engine of Growth Theory Export-Led GrowthExport-Led Growth Microeconomic / Macroeconomic ConsiderationsMicroeconomic / Macroeconomic Considerations Private Sector Participation / Public Sector GovernancePrivate Sector Participation / Public Sector Governance Strategic Choice as in the Game TheoryStrategic Choice as in the Game Theory Competition in Productivity Competition in Productivity

II. The Trade Facilitation Strategy in the e-Life Era: A Framework for Structural Change Industrial Organizational Paradigm: Structure, Conduct, PerformanceIndustrial Organizational Paradigm: Structure, Conduct, Performance Structural Change with a visionStructural Change with a vision

II. The Trade Facilitation Strategy in the e-Life Era: A Framework for Structural Change Building Blocks for Structural Change:Building Blocks for Structural Change: 1.Education and Awareness: 1. Fostering the Competitive Culture 2.Legal Environment 1.Intellectual Property Rights 2.Electronic Business Legislation 3.Technical Infrastructure: 1.Telecommunication 2.Banking Services

II. The Trade Facilitation Strategy in the e-Life Era: A Framework for Structural Change 4. Economic Policies: 1.Competition Policy vs. Rent Generating Policy 2.Exchange Rate Policy 3.Trade Policies: 1.Tariffication 2.Regional Cooperation

III. The Experience of the Islamic Republic of Iran: A Case Model for Trade Policy Reform ( )  Vision, Research and Strategic Planning:  Five year Plan for the Ministry of Commerce,  Trade Reform Policies in the national third five year plan, 2000  Provision of the government’s national e- Commerce policy, 2001

III. The Experience of the Islamic Republic of Iran: A Case Model for Trade Policy Reform ( )  Trade Information Services:  Agahgar Network, 1995  Trade Point Network, 1997  Chamber of Commerce Network, 2000  Feasibility Study for the Comprehensive National Trade Information Network,  Design and Build up of the National Trade Information Network,

 Awareness and Education:  International Edicom 1998  Seminar on e-Banking and e-Commerce, 1999  Seminar on smart cards and e-Commerce, 2000  WIPO International seminar on Intellectual Property and Electronic Commerce,2002  Translation of International Documents and Literature  General Education and Professional courses and workshops III. The Experience of the Islamic Republic of Iran: A Case Model for Trade Policy Reform ( ) cont.

 Facilitating Services:  Implementation of Barcode Technology in the Supply Chain, 1997  Introduction of UN/Edifact standards, 1997  Establishment of the inter-organizational Iran- Edifact Committee and specialized working groups, 1995

III. The Experience of the Islamic Republic of Iran: A Case Model for Trade Policy Reform ( ) cont.  Legal Environment:  Provision of the draft for “e-Commerce Law”, 2000, due for final approval in 2002  Coordination with the Legislative Branch for provision of specialized courts for e- Commerce cases, and provision of training workshops for judges  Law Enforcement Agencies Workshop on e- Crime

III. The Experience of the Islamic Republic of Iran: A Case Model for Trade Policy Reform ( ) cont.  Technical Infra-structure:  PTT’s Data Network ( IranPAC), national backbone  Trans-Asia Europe Fiber Optics Cable Project  Implementation of the SWIFT protocol in the banking system

III. The Experience of the Islamic Republic of Iran: A Case Model for Trade Policy Reform ( ) cont.  Trade Policy and Procedures: –Removal of non-tariff barriers by 2004, according to the third five year plan, 1999 –Transformation of at least 50% of government transaction to e-Business by 2004, according to the third five year plan, 1999

III. The Experience of the Islamic Republic of Iran: A Case Model for Trade Policy Reform ( ) cont. –Removal of all export duties and licensing procedures, 2001 –Implementation of ASYCUDA system in the major customs, 2001 –Automation of the registration procedures for imports, due by end of 2002

IV. Concerns and Challenges for Developing Countries  Political Economy of Trade Facilitation: –Productivity Gain, win-win game –Transparency and competition, loss of rent,  Public Policy Concerns in the globalized market-place: –Lack of Competition and anti-trust rules in the supra- national markets –Employment losses occur in domestic market, but new employment opportunities fly abroad: –The case for trade in services

IV. Concerns and Challenges for Developing Countries  Sustainable Development through Responsible Participation of all  Implementation of Trade Liberalization and Facilitation for the LDCs’ Exports

V. Lessons and Recommendations  Vision, Design, Implementation of a Master Plan  Inter-Ministerial Mandate, Coordinated Support  Private Sector Involvement  Benefit Sharing, Widening the spectrum of the beneficiaries  Expansion of ICT and E-business investments and job opportunities  Technical Assistance from International Organizations and MNCs

Trade Facilitation not only a Catalyst for Change but also a Catalyst for Peace

Thank You