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Measuring Trade Facilitation Performance:Rationale, ESCAP Tools & Way Forward
Central Asia Breakout Session, APTFF 2011
Yann Duval, Trade Facilitation Section
Trade and Investment Division,
United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Overview
• Introduction
• ESCAP Trade Facilitation Framework
• ESCAP’s Regional Trade Cost Database– Some findings from data analysis
• ESCAP’s Business Process Analysis Initiatives– Selected findings
• Conclusions & Recommendations
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Introduction
• Measuring progress is crucial– Identifying trade facilitation measures that work – and those that don’t
– Ensuring that the changing needs of stakeholders are understood
– Securing needed financial and/or political support to make further improvements
and implement additional/new measures
• Various tools already exist
– TF (need) assessment frameworks• List of TF measures & information about their implementation status: APEC TFAP;
WCO or WTO TF assessment check list; ESCAP TF Framework
– TF performance monitoring databases or methods• Macro level (global/general): Doing Business, WB LPI, UNCTAD LSCI, others
• Macro level (bilateral/intra/interregional): ESCAP Trade Cost Database
• Micro level (national/bilateral & product/corridor specific): CAREC CPPM; ESCAP/ECE BPA; ESCAP time/cost distance model; WCO TRS; others
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
ESCAP Trade Facilitation Framework (1)
• What is it?– Series of suggested
Trade Facilitation
implementation
steps and sub-steps
– With associated
(yes/no) indicators
(to assess state of
implementation)
– Also include
suggested key
performance
indicators
– http://www.unescap.org/tid/publication/t&ipub2327.asp
• Developed by a regional team of TF experts in 2003/4
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
ESCAP Trade Facilitation Framework (2)
• (known) Applications so far:– Applied in several Central Asian countries on a pilot basis in 2004-5
• Unclear whether the framework was used for monitoring of TF implementation by
individual countries after project ended
– Used as the basis for development of the ASEAN Trade Facilitation
Framework (mandated as part of the ASEAN Trade in Goods Agreement
implementation)
• ASEAN has not made its framework public;
• Simplified and updated version introduced in the ADB-ESCAP
Reference Book on “Designing and Implementing Trade
Facilitation in Asia and the Pacific”, 2009• http://www.unescap.org/tid/projects/tfforum_adbescapbook.pdf
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
ESCAP Bilateral Trade Cost Database
• Macro-level indicator of Trade Facilitation Performance– Measure of all direct and indirect international trade costs between two
countries
• Only database providing bilateral trade cost information– Directly relevant for intra-regional trade performance monitoring
– 50+ countries (http://www.unescap.org/tid/artnet/trade-costs.asp )
• Version 2.0 under dev.– 107 countries
– Enhanced trade cost indicators
– Disaggregated into:• Industry trade costs
• & Agricultural trade costs
– To be available by: Dec. 2011
Trade costs
of selected
countries
with Japan
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
ASEAN-4
East and
North-
East Asia
North and
Central
Asia
SAARC-4 Aus-NZ EU-5 NAFTA
ASEAN-449%
(-1%)
East and North-
East Asia132%
(na)
105%
(na)
North and
Central Asia
259%
(10%)
193%
(-5%)
148%
(12%)
SAARC-4117%
(-4%)
201%
(na)
258%
(-6%)
113%
(-5%)
EU-5105%
(2%)
127%
(na)
161%
(-3%)
124%
(-2%)
122%
(0%)
59%
(-3%)
NAFTA 101%
(3%)
109%
(na)
244%
(10%)
137%
(-7%)
122%(6
%)
104%
(1%)
50%
(15%)
Intra & Inter subregional Trade Costs in Asia(excluding tariff; 2007 in tariff equivalent; changes since 2003 in parenthesis)
���� Intra-Asia trade cost HIGHER than trade cost of Asia
with non-Asian partners
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
ESCAP’s Business Process Analysis Initiatives for Trade Facilitation
• Part of ESCAP’s support to paperless trade – United Nations Network of Experts for Paperless Trade in Asia and the Pacific
(UNNExT)
• www.unescap.org/unnext/
• UNNExT Business Process Analysis Guide for the
Simplification of Trade Procedures (2010).
BPA? Analysis, including mapping,
timing and costing of a process(e.g., moving goods from factory to
deck of ship)
Why? Necessary first step to improving a process
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Output of a UNNExT Business Process Analysis (1)
8
Use Case Diagram
Activ
ity D
iagra
ms
Define scope of analysis,stakeholders involved,Activities to be studied
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Output of a UNNExT Business Process Analysis (2)
The time-procedure chart*
*Frozen shrimp exports; Data collected by Institute for IT Innovation, Kasetsart University (2007)
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Export Time and Cost Estimates from BPA Studies*(Doing Business Report 2011 values shown for reference)
Export from THAILAND CHINA CAMBODIA INDIA
Source: DB11 K.07 ARTNeT DB11 ARTNeT DB11 ESCAP DB11 ARTNeT
Product: ? RiceAuto
PartsSugar ? Garment
Electric
Eq.? Rice Cashew ? Fruits & Veg.
Export to ? IN BL ? JP TH ? EU IN ? UAE
Export Time (days)
Time for Document
Preparation X
8 7.2 2 14 14 4 9 14 10 8 8 11
Time for Inland
Carriage and Handling
X
2 1.6 1.5 2 2 3.9 5.1 3 4 4 4 4
Time for Customs
clearance X
1 0.2 1 1 2 2.3 0.2 3 0.5 0.5 2 2
Time for Terminal
Handling X
3 1 3.25 2 3 1.3 1.2 2 2.5 2.5 3 2
TOTAL TIME for
EXPORTS (WB Def.)
14 9 8 19 21 12 16 22 17 15 17 19
EXPORT Cost (USD)
TOTAL COSTS -
Exports
625 n.a. 509 430 500 366 366 732 1029 839 1,055 550
*Preliminary and adjusted to allow for comparisons. See individual studies at www.artnetontrade.org for details.
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Selected findings from BPA for TF studies
• Document preparation takes most time, followed by transport/handling issues
• Some procedures/regulations driven by industry associations to prevent entry by new/small players
• Procedures between private parties are a big part of the overalltrade process
• Importance of port logistics confirmed
• Large variations in time and cost across products (or product usage), transport routes, destination, firm size,…– Data collected needs to be carefully validated (e.g., through multi-stakeholder
meetings)
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Conclusions and Recommendations (1)
• ESCAP trade cost database provide unique BILATERAL cost information
• �Countries to learn how to measure bilateral trade costs based on their national data
• �Countries to learn how to interpret available (cross-country) indicators and their limitations
• � Regular standardized BPA studies of trade procedures should be considered at the national/regional level– Complementary to WCO Time Release Study method
– Complementary to time/cost-distance model & ADB Corridor performance measurement initiative
– Best approach would be Joint cross-border Trade/Transit Process Analyses
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Conclusions and Recommendations (2)
• Adoption of common TF (need/implementation) Assessment Framework can be useful to foster collaboration and understanding
• � Agree on a common Trade Facilitation Assessment Framework
• Adopt a simple existing framework to limit development and implementation costs
• Build on / Integrate existing data collection and performance monitoring initiatives by ADB under CAREC
• � If Single Window of special interest, agree on a
common implementation assessment framework– ESCAP/ECE and UNNExT are developing such framework
– ASEAN also working on this
13
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Thank You
14
More information on the:
ESCAP Trade Cost Database - [email protected]
United Nations Network of Experts for Paperless
Trade (UNNEXT) – www.unescap.org/unnext
Asia-Pacific Research and Training Network on
Trade (ARTNeT) – www.artnetontrade.org
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
Annex
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
ESCAP’s Intraregional Trade Cost Database- Background
• Much progress has been made in developing trade
facilitation/costs indicators
• However, there are limitations, including:– (1) partial coverage of international trade costs (e.g., only international
shipping costs)
– (2) little or no information on bilateral/regional/south-south trade costs
– (3) very large variations in trade efficiency across products and trade routes
not captured
• ESCAP is therefore:– Developing a database of bilateral and intraregional trade costs
– Building capacity in Trade Process Analysis
Asia-Pacific Trade Facilitation Forum 2011 & Side Events: 3 - 8 October, Seoul
What explains changes in the trade costs across countries?*
50+ %
25%
10%
10%
1%
10-30%
60-90%
Natural trade costs(geographic and cultural distance between countries)
0-10%Tariff costs
Policy-relatedNon-Tariff
trade costs
Business environment
Availability/use of ICT services
Liner Shipping Connectivity (port and maritime services efficiency)
Direct cost of trade procedures
Other factors, including:-Indirect cost of trade procedures
-Currency / exchange rate-Non-tariff Measures (SPS, TBT)
*simplified representation based on Duval (2011)