WTO TRADE FACILITATION SUPPORT PROGRAM Gerard McLinden International Trade Department The World Bank Needs and Priorities/Implementation Costs and Challenges Study 26 July 2006

Outline Overview Progress to date Key Issues identified Conclusions Next Steps

Overview Annex D – Clear role for the World Bank (during and after negotiations) Six country studies designed to identify probable costs and implementation difficulties associated with a new Trade Facilitation Agreement Support provided by EC, DFID (UK) and Sweden Methodology Partnership with the WCO and IMF Country assessment visits – Experienced TF specialists Development of a practical assessment tool (Based on TN/TF/W43 – Compilation of Proposals) Individual reports prepared for each country Consolidated report for NGTF members Self assessment tool

Overview Scope Regulatory/Legal Framework Needs Administrative Policy and Procedure Needs Human Resource Needs Training Needs Equipment/Infrastructure Needs Organizational Needs Change Management Needs Focused on WTO NGTF Agenda – Not wider capacity building needs and priorities Customs and other border management agencies

Progress to Date Detailed assessments conducted in: Rwanda Sri Lanka Paraguay Senegal Egypt Philippines late July

Key Issues Identified Specific needs and priorities differ but many common concerns and challenges Majority of proposals considered positive and practical by government officials and the business community A new agreement seen by many as a catalyst for building political will and momentum Little new – most proposals already part of the suite of good practice promoted by WCO, UNECE, WB, IMF and donors No country is starting from scratch – much donor support already provided and more in the pipeline

Key Issues Identified All countries studied have made good progress already. All currently: Maintain websites containing most required information in a WTO language Have formal appeal mechanisms in place Utilize some form of risk management and selectivity Accept security to release goods prior to final resolution of import transactions Provide advice on tariff classification in advance of importation Have IT systems for processing import/export transactions Possess adequate technical know how in key TF areas Have established post clearance audit units

Key Issues Identified Many of the implementation challenges and barriers identified do not lend themselves to resolution by TA (regardless of its quality or quantity) Competition between government agencies Poor quality of public/private relationship Revenue maximization focus at expense of all other priorities Low levels of voluntary compliance Under developed private sector (Banking, ICT, Customs brokers) Lack of sustained political will and commitment

Key Issues Identified Customs typically far ahead of other agencies: Customs in all countries have IT systems in place Customs already use some form of risk management and selectivity Customs typically have some form of active cooperation and information sharing with neighboring countries Customs have received bulk of donor support to date Customs attempt to measure performance Customs understand the TF agenda Customs have agreed international instruments and blueprints to work from

Conclusions WTO TF agenda typically welcome and in line with existing modernization plans and strategies (with some exceptions) Little new TA needed for mere compliance with likely provisions of a new agreement High costs associated with IT (single window) and border station refurbishment TA needed for effective implementation – particularly in areas such as: Drafting of legislative amendments Developing new administrative systems and procedures IT system migration/upgrade Risk management – ‘control mindset’ Activity based costing methods

Conclusions But, WTO TF agenda can’t be seen in isolation from wider reform and modernization needs Many needs similar across countries – potential for economies of scale in design and provision of TA – potential for regional solutions and programs S&DT must take into account individual circumstances of members: Level of sophistication of private sector ICT infrastructure Revenue mobilization implications (rationalization of charges, consularization fees, etc) Geography

Next Steps … Finalize reports for six case study countries (August) Prepare consolidated report and cost tables for distribution to NGTF members and donors (after recess) Convert current country study tool into a practical self assessment tool Currently exploring possibility of providing training to national officials to assist them to undertake detailed needs and priorities assessments using the self assessment tool and methodology

WB/WCO PROPOSAL ANALYSIS GRID High Low Implementation Difficulty/Cost Reject Proposal ? Don’t Care ? Support Proposal But … Consider S & DT and TA/Capacity Building ? Benefits for Government and Traders Low High