Economic reform critical for trade facilitation
Coordinated border management and obtaining evidence of the impact of trade facilitation reform can help determine the extent in which the World Trade Organization’s trade facilitation agreement has been effectively implemented. The World Bank Group’s Senior Economist, William Gain, said this at TPO World Network Conference 2014 in Dubai, United Arab Emirates, on 5 November.
In his remarks on the second day of the biennial conference, Mr. Gain told delegates at a session on trade facilitation and the implications on trade promotion organisations that trade facilitation involves the simplification, standardisation and harmonisation of procedures and processes, and associated information flows to move goods through the supply chain in a transparent and predictable manner. It also relates to the identification of bottlenecks caused by weaknesses in trade-related logistics and regulatory regimes which prevent the timely and cost-effective movement of goods.
Mr. Gain pointed out that countries which reduce supply chain barriers only half the way to global best practice standard, global GDP could increase by 4.7% translating into USD 2.6 trillion, with world trade increasing by 14.5% or US$ 1.6 trillion. This, he said, far outweighs the benefits from the elimination of all import tariffs, according to the World Economic Forum.
Mr. Gain said studies have shown that improving the quality of physical infrastructure increases exports by more than 10% while a 1% increase in aid-for-trade facilitation potentially results in USD 290 million of additional exports. He stated that adopting electronic documentation for the air cargo industry could yield USD 12 billion in annual savings while reducing 70-80% of paperwork-related delays.
The Assistant Under-Secretary of the Ministry of Economy of the United Arab Emirates, Juma Al Kait, said trade promotion organisations can seize opportunities in trade facilitation to build a better trading environment by promoting trade and attracting investment.
Shaista Asif, Chief Executive, UTrade said stressed the importance of trade information to facilitate trade, including production and transportation costs. Problems with customs officials who need to be enlightened.
Won Sok Yun, Director-General of the Department of Planning and Coordination, Korea Trade Investment Promotion Agency (KOTRA), said the government of South Korea has introduced a customs single window to facilitate trade.
Summing up, the International Trade Centre’s Chief of Trade Facilitation and Policy for Business, Rajesh Aggarwal, who moderated the session, said trade facilitation should address transaction costs and information asymmetry. Trade promotion organisations, he added, can capitalize on the advantages that accrue from trade policy reforms to promote enterprise development.