Achieving Compliance with WTO future Trade Facilitation Agreement: Learning from UNCTAD's Experience of Working with 25+ Developing Countries Dr. Mohammad SAEED Senior Technical Advisor, UNCTAD Regional Training Workshop on Trade Facilitation, Infrastructure and Trade Costs Policies in ESCWA Region 8 –9 April 2013, Dubai

1. The Context & Quantum 2.UNCTAD projects on implementing TF measures in developing countries 3.Methodology and national implementation Plan 4. Key Findings Lessons Learnt 5.Way Forward Trade Facilitation, Infrastructure & Trade Costs Policies

 A typical trade transaction passes through 27 to 30 parties – including brokers, banks, carriers, sureties, freight forwarders and other intermediaries requiring at least 40 documents.  Enormous amount of time and money wasted and is hampering business, stifling growth and holding back economic development, particularly in developing countries. 1. The Context & Quantum-1

 Approximate estimate for world trade is US$ 600 billion each year (OECD)  One extra day in handling or clearance of consignment represents 1% of tariff  1% reduction in transport and logistic costs represents increase in Asian GDP of US$ 3.3 billion (World Bank)  Moving to e-documentation to trade would yield a cost savings of some 1.5% to 15% of the landed cost of an imported item. 1. The Context & Quantum-2

 Transport cost barriers outweigh tariff barriers for 168 out of 216 US$ trading partners. The dominance of transport cost is more prominent in the case of developing countries. (World Bank, 2002)  If the developing countries can curtail an average of 1 day in time spent in handling of all of their trade, they can save nearly US$ 240 billion annually. (UNCTAD, 2001) 1. The Context & Quantum-3

 Huge documentary requirements  Inefficient administrative formalities  Lack of cooperation - between custom and other border agencies and traders  Lack of automated processes and scarce use of IT  Lack of human and financial resources  Deficiencies in the area of infrastructure

Regulatory Category Examples of related activity Revenue Collection Collection of Customs duties, taxes and fees; management of bonds and other financial securities Safety and Security Security and anti smuggling controls; dangerous goods; vehicle checks; export licences Environment and Health Phytosanitary, veterinary and hygiene controls; health and safety measures; CITES controls Consumer Protection Product testing; labelling; conformity checks with marketing standards (e.g. fruit and vegetables) Trade PolicyAdministration of quota restrictions; refunds; suspensive regimes

TradeTransportation Customs and other border agencies Trade Facilitation

Reduce transaction costs Door-to-door Logistics Public Sector Ministry of Communications/Commerce/Finance Customs reform & modernization TRADE FACILITATION MEASURES Private Sector Importers & exporters, transport operators, banks, insurance cos.

1. The Context & Quantum 2.UNCTAD project on implementing TF measures in developing countries 3.Methodology and national implementation Plan 4. Key Findings and Lessons Learnt 5.Way Forward Trade Facilitation, Infrastructure & Trade Costs Policies

2. UNCTAD project… Trade facilitation Research and analysis Consensus building Capacity Building UNCTAD’s three pillars

 To improve the national environment for international trade transactions;  In close coordination with Government and private sector concerns;  Through alignment with international conventions, regional arrangements, nal. reform initiatives in line with recognized best practices  With particular reference to WTO future TF Agreement

 TWO multi-country projects for developing national implementation plans for future WTO trade facilitation agreement and aligning national, regional and multilateral initiatives and country specific  Financed by the European Union, individual country donors and by UNDA  Duration : 2 years (2012–2013) for EU & UNDA Projects  In cooperation with other Annex D organizations (IMF, OECD, WB and WCO)  Over twenty five countries covered by this project and a special project financed by UNDA

 National implementation plans (confidential)  Current status of implementation  Action Plan and lead agency  Resource and time requirements  Priority and indicative categorization  The UNCTAD consolidated report:  Understanding the measures  Summary of findings without attribution  Implementation template and sequencing along with an implementation check list The project’s outputs

 Identify areas of non-compliance based upon current status and what needs to be done to achieve compliance  Updated needs assessment  Action plans, national priority and time requirement  Areas where additional support/funding may be necessary and source  Increased knowledge of TF measures negotiated in WTO  Reaffirmed/strenghened role of the TF committees  Basis to develop fullfledged project proposals Support for Partner countries in WTO TF Negotiation

Angola Bangladesh Benin Burkina Faso Burundi Dominican Republic Gabon Guatemala Jordan Nepal Organization of Eastern Caribbean States (OECS) (6 WTO members) Paraguay Suriname Sudan Nicaragua A selection of the least developed countries, middle income developing countries, landlocked countries and small island economies. Geographical coverage

1. The Context & Quantum 2.UNCTAD project on implementing TF measures in developing countries 3.Methodology and national implementation Plan 4. Key Findings and Lessons Learnt 5.Way Forward Trade Facilitation, Infrastructure & Trade Costs Policies

3. Methodology  Development/adjustemnt of Questionnaire  Selection of National Consultant  Fact Finding Mission in partnership with national authorities and national colloborative forums  Interviews of national stakeholders  Draft National Implementation plan  Validation Conference  National implementation Plan

 Step I: Interviews with the TF stakeholders (Members of the TF Committee)  To discuss the TF measures of particular importance to the interviewee using a standardized questionnaire  The response solicited is not the official position or commitment of the government but an informed opinion based on the knowledge and experience of the interviewee(s).  Step II: Drafting of the national implementation plan (national consultant, UNCTAD)  Based on the result of the interviews  Building on the needs assessment and current state of implementation  Assigning proposed categorization and national priorities Preparation of the national implementation plan

 Step III: National validation workshop to review and validate the draft plan, i.e.  Current status of implementation of each trade facilitation measures in the draft TFA;  Implementation priority and category for each measure  Actions required for the implementation of non or partially implemented measures  Needs for technical assistance  Scope for the regional action, if relevant Preparation of the national implementation plan

1. The Context & Quantum 2.UNCTAD project on implementing TF measures in developing countries 3.Methodology and national implementation Plan 4. Key Findings and Lessons Learnt 5.Way Forward Trade Facilitation, Infrastructure & Trade Costs Policies

4. Key Findings -A  TF is not an ‘alien’ concept (principles well understood)  No country starting from scratch  Significant progress since ‘Needs Assessment’  Many measures are implemented, but not ‘institutionalized’  Measures may require ‘fine tuning’ or ‘add-ons’ to achieve compliance with the final text  Customs is ‘ahead’ of other border agencies  Need to identify Lead Agency to drive change

4. Key Findings -B  Automation can be a key ingredient in providing the enabling environment necessary to support other measures  Most T.A. necessary will be in form of Capacity Building to assist in development and implementation of reform strategies (not technical)  Need to aim beyond just achieving compliance with TFA to maximize returns  Concerns expressed about private sectors ability to engage in some measures / drive agenda

Lessons Learnt -A  Important not to underestimate Political Support still necessary, even at advanced stages  Need to aim beyond just achieving compliance with TFA  Need to identify and implement ‘Change Management’ Strategies and Lead Agency to help in achieving ownership of Reforms  The use of a National Consultant improves the quality of study especially in identification of suitable respondents  Frequently consult with private sector  The ‘Needs Assessment’ was a useful starting point to further develop the plans

Lessons Learnt -B  The desk research prior to conducting study helped in making it more effective /focused  Where implementation is already underway, need to monitor with regard to final text  ‘Costing’ remains a complex issue but amounts are not enormous  A well functioning national trade facilitation Committee can steer the implementation process in a better way  Aim at implementation plans with actions, budgets and calendars  Need to help guide respondents (keep focus) without appearing dismissive (not a debate on TFA merits)

1. The Context & Quantum 2.UNCTAD project on implementing TF measures in developing countries 3.Methodology and national implementation Plan 4. Key Findings Lessons Learnt 5.Way Forward Trade Facilitation, Infrastructure & Trade Costs Policies

5. The Way Forward  Strengthen the National Trade Facilitation collaborative forum(s)  Look beyond TFA to broader National TF agenda  Develop or Update National TF Strategy  Develop Action Plan for updated TF Strategy  Design implementation Plans in consultation with the lead implementation Agency

Using experience in other countries  Methodology ( questionnaire, interviews & validation workshops) evolved and well tested  Partner countries’ response regarding process and utility of output further refined it.  Procedural steps (hiring of national consultants, travel plans, selectionn of participants) well practiced  Support from Annex D forthcoming & beneficial  Expertise (available with UNCTAD) combined with funding can help assisting more developing countries

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