1. Trade and Transport Facilitation Jean Francois Arvis International Trade Department The World Bank Teheran April 27 2004

2. Trade and Transport Facilitation (TTF) 1.TTF: definitions, area of focus and importance for growth. 2.TTF policies: the case of transit 3.World Bank Programs: the trade and transport facilitation audit. 04/27/2004

3. Scope of TTF Rationalisation, optimization and harmonization of procedures and services for international trade looking for reduction in costs and delays. Areas of focus thus include: Transportation networks (road, rail, maritime and air) Customs and import procedures Transit procedures and infrastructure Communication and information management

4. Scope of TTF (2) Efficiency of logistics services (handling, storage) Regulations and governance. Security Market structure and business practices

5. Issues The TTF should be put in the context of international competitiveness and growth Today, potential gains from trade facilitation >= gains from tariffs The TTF can be undertaken at the country level by the government and stakeholders Multilateral framework can help (only topic of consensus at WTO 2003 Meetings in Cancun)

6. Cost and Gains from TTF Logistics= 1/3 cost of cargo Excess inventory resulting from poor logistics can increase the cost of final product by 20% Time factor: –1 day = 0.5 point tariff equivalent –1 week delay for Imports = 0.5% GDP (in Iran)

7. Cost and Gains from TTF (2) Role of IT: 10% reduction in cost of telecommunication = 1% impact on total trade WB study shows that improving trade and transport services like ports and customs increases trade volume by around 400 billion USD. (Mostly South-South trade)

8. Facilitation and growth 2 % growth differential

9. The Potential Measures in TTF Policy reforms (e.g., removal of price interventions/controls, adoption of ‘economic’ pricing etc.) Regulatory and public sector reforms Enterprise reform in the area of services Reengineering of procedures and documentation( “single document”)

10. The Potential Measures in TTF (2) Introduction of modern information and communication technologies related to transport and trade (EDI) Key investments in infrastructure that could remove bottlenecks to trade Financial system: risk mitigation measures, transit guarantees (e.g.TIR system, bonds)

11. Transit facilitation Transit is an internationally recognized right Transit objectives: Safeguard the interests (notably customs revenue) of the country of transit. Allow smooth and speedy movement of the goods to the country of destination. This means: –No duties or inspection on good in transit –Adequate transit customs procedures (bonds)

12. Transit facilitation(2) Transit = most difficult issues in facilitation: –Extended in space and time and vulnerable to inadequate procedures and practices –Requires International cooperation Transit may be an opportunity for growth in the country of transit.

13. Transit lessons from experience 1.A working guarantee system (preferably carnet) 2.Engage the private sector 3.Customs modernization: automation, enforcement 4.International cooperation: corridor agreements, regional technical agreements

14. Flow of Documents

15. Trade Facilitation Network (Single Window) 1

17. Resources from the World Bank Available for Assistance in TTF GFP and Web based resources Increasing knowledge base : indicators, best practice, reform examples Diagnostics and audits: trade and transport facilitation audit Projects: technical assistance or hardware.

18. Examples of recent projects Tunisia 1.Development of SMEs (ex. training) 2.Pre-export finance (ECA) 3.EDI and “single document” Phase 2 in preparation Peru 1.Export promotion institutions 2.Export credit 3.Logistics: import/export procedures EDI Key infrastructure

19. A Global Resource: “Global Facilitation Partnership” Global forum for trade facilitation WTO, WCO, WB Regulators (e.g.. Ministry of transport) Operators Information exchange Distance learning for professional in logistics sector (e.g. GFPDLI) www.gfptt.org

20. Trade and Transport Facilitation Audits (of TTFAs) oPractical approach to problems encountered by exporters and importers. oUsers’ perspective: based on interviews of participants to trade activities oDiagnostic + remedial actions. oPotentially provide the groundwork for cross-cutting projects

21. The Focus Effectiveness of procedures and cost of services available to international trade including: –Inland, sea, and air transport costs –Procedural and documentary requirements needed to move goods through borders –Quality and range of logistic services and infrastructure –Information exchange and coordination between private and public participants

22. The Interviewees oForwarder/Agent/Broker oMultimodal Transport Operator or 3 rd party logistics provider oExporter oImporter oShipping Line and Ships’ Agents oRoad Carrier oAirline/Airport oExpress Operator oRailway Company oPort Authority oKey Border Crossing Point oCustoms (central) Commercial Bank oExchange Control/Central Bank oPSI Agency oChambers of Commerce

23. The Toolkit John Raven: “Trade and Transport Facilitation – An Audit Methodology”, World Bank, April 2000. Based on experience of practical application in a variety of Bank lending and project assessments.

24. FY04 TTFA program. Trade diagnostic: Benin, Chad, Laos, Malawi, Mozambique, Tajikistan, Zambia Export competitiveness: Dominican Republic, Bangladesh Self standing: Morocco