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DIGITAL TRADEASIA-PACIFIC INFORMATION SUPERHIGHWAY ( AP- IS )

F IRST STEERING COMMITTEE MEET ING 2017

Duangthip Chomprang

2 November I 2017

Dhaka

SDG 2030 CAVEATS RELATING TO TRADE & DEVELOPMENT

Universal Goal (Inclusive of both Developed and Developing)

International Trade as part of the SDG Goals for the first time

Trade Led Development Focus

Sustainable Investment Framework

MOTIVATIONS

To take advantage of competitive advantage

Balance of Trade

Market access

To attract Foreign Direct Investments

National security

Liking into the Global Value Chain

Economic Cooperation and Integration

LINKING DIGITAL CONNECTIVITY AND TRADE FOR SDG

Trade (Direct, Indirect (Intellectual Exchange)

Facilitate Investments

Global Value Chain

Economic Integration

UNDERSTANDING TRADE MECHANISM AND FUNCTIONALITY

Trade Corridors: Trade corridors are a network of transportation infrastructure enabling and linking the streams of products/services and information moving through and within communities in a geographic patterns according to a matrix of culture, trade agreements, statutes, legislations and customs that govern and guide trading relationships, institutions and structure. (Michael Van Pelt 2003)

Economic Corridors: Mobility of capital, labour, product/services, information, etc.

Niche Corridors

UNCTAD B2C E-COMMERCE INDEX 2016

Source: UNCTAD B2C e-Commerce Index 2016

Penetration (% of Pop)

Credit card penetration(

%)

Secure Server (per

1Mln)

Public postal

reliability 2015

Ranking2016

Ranking

% Internet Shopper per Internet Pop

Brunei na na na na na na naCambodia 9 3 41 25 91 119 naIndonesia 17 2 47 66 88 93 9%Laos PDR 14 3 38 26 105 115 naMalaysia 68 20 69 84 45 44 15%Myanmar 2 25 21 na 133 naPhilippines 40 3 52 48 na 89 7%Singapore 82 35 88 98 26 23 57%Thailand 35 6 58 90 70 69 6%Vietnam 48 2 52 70 90 75 26%

NATIONAL DIGITAL ECONOMY DEVELOPMENT PLAN

Almost 99% of developing countries have a national digital economy development plan since 2016.

Lack substance and target

Not aligned with the UN’s SDG 2030 goals

e-Commerce is a starting point for most countries

ASEAN INTRA-TRADE TRENDS

DATA IS EATING THE WORLD!World’s largest taxi company owns no taxis UBER

Most popular media creates no content Facebook

Largest accommodation provider owns no real estate AirBnB

Largest phone companies does not own any telephone infrastructure Skype, WeChat

World’s most valuable retailer has no inventory Alibaba

Fastest growing banks have no actual money Society One

World’s largest movie house owns no cinemas NetFlix

Largest software vendor, does not write their apps Google

Most popular emerging research firm, has no researchers HfS Research

Source: HfS Research

A REGION WITH ABUNDANCE OF FREE TRADE AGREEMENTS

ASIA-PACIFIC TRADE AGREEMENTS

GLOBAL VALUE CHAIN (GVC)

Fragmented network of production within a specific supply chain (product, services, materials, information, technology) primarily, regional in focus and tends to be trading in intermediate goods

For example, the Asia-Pacific region is the world’s the largest GVC for ICT product and services. As well as, the largest consumers of ICT products and services.

ICT HUB OF THE WORLD

GVC TRADE IMBALANCE EFFECT -REGIONALISM

MAP OF ITA MEMBERS

Generally, ITA members with FTA tariff rates avg. 0.6% vs. Non-ITA members of 3.3%

29 member countries (original) mostly from Asia-

Pacific and the US

MAP OF GLOBAL TRADE TARIFF AND TAXATION ON ICT

ICT TAX AND TARIFF BY REGIONS

32

Paperless Trade?

Paperless Trade

Conduct of trade activities on the basis

of electronic rather than paper

documents e.g. electronic Customs

declaration, electronic cert. of origin(application of e-commerce to international trade domain)

Paperless Trade Systems

Legal/regulatory and technical

frameworks in which paperless trade

transactions take place e.g. electronic

Single Window facility, e-port

management systems, Framework Act

on Electronic Transaction (in RoK)

Chamber

ImporterExporter

ShipperForwarder

Customs

Inspection

eCO

Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017

33

Towards Cross-border paperless trade (including to enable cross-border e-commerce)

International

Supply Chain

Integration / Cross-

Border e-Commerce

Rise of cross-border e-commerce

…Legal and technical

barriers in information

exchange (across borders)

Increased implementation of

(national) Single Windows and

paperless trade systems, but…

Need to facilitate cross-border trade data

exchange in the region and beyond

Rise of regional and global production networks


PAPERLESS TRADE AND NATIONAL SINGLED WINDOW

ASEAN Trade in Good Agreement Article 49: Establishment of the ASEAN Single Window

Member States shall undertake necessary measures to establish and operate their respective National Single

Windows and the ASEAN Single Window in accordance with the provisions of the Agreement to Establish and

Implement the ASEAN Single Window and the Protocol to Establish and Implement the ASEAN Single Window.

WTO TFA Article 10.4: Single Window 4.1 Members shall endeavour to establish or maintain a

single window, enabling traders to submit documentation and/or data requirements for importation, exportation,

or transit of goods through a single entry point to the participating authorities or agencies. After the examination

by the participating authorities or agencies of the documentation and/or data, the results shall be notified to the

applicants through the single window in a timely manner. [..] 4.4 Members shall, to the extent possible and

practicable, use information technology to support the single window.

ESCAP’s Cross-Border Paperless Trade Facility, 2016 – The adoption of Single Window and

the WTO TFA in Phase approach to facilitate current and future regional trade agreements

35 35

Benefits of Paperless Trade

Effective & EfficientDeployment of

Resources

CorrectRevenue

Yield

ImprovedTrader

Compliance

EnhancedSecurity

IncreasedIntegrity &

Transparency

FasterClearance &

Release

PredictableApplication and

Explanation of Rules

Cutting Coststhrough

Reducing Delays

Effective & EfficientDeployment of

Resources

IncreasedTransparency

Paperless

Trade

TradersGovernment

37

“It is expected to provide countries of Asia and the Pacific with a new tool and “digital” complement for better

implementation of the WTO Trade Facilitation Agreement (TFA) and the development of cross-border e-

commerce.”

38

Framework Agreement on Facilitation of Cross-border

Paperless Trade in Asia and the Pacific: Key Provisions

Article 1: Objective

The objective of the present Framework Agreement is to promote cross-border paperless

trade by enabling the exchange and mutual recognition of trade-related data and documents

in electronic form and facilitating interoperability among national and subregional single

windows and/or other paperless trade systems, for the purpose of making international

trade transactions more efficient and transparent while improving regulatory compliance.


39

A new UN Treaty

Open to interested (53) ESCAP member states (voluntary) to become parties

Opening for signature set to 1 October 2016 at UN Headquarters, New York

Objective

To facilitate cross-border paperless trade (data exchange) among willing ESCAP member states by providing a dedicated intergovernmental framework to develop legal and technical solutions

Complementary to the WTO Trade Facilitation Agreement as well as (sub)regional efforts

4 year step-by-step development process (ESCAP resolutions 68/3,70/6,72/4)

Over 30 countries directly involved in finalizing the treaty text in March 2016

Regional

Study

Negotiation &

Finalization

Expert Review &

Member

Consultations

Adoption

by the

Commission

2012 2013 2013 - 2016 19 May 2016

Framework Agreement on the Facilitation of Cross-Border Paperless Trade in Asia and the Pacific


40

New WCO Report on

Cross-Border E-commerce*

*http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/facilitation/activities-and-

programmes/ecommerce/wco-study-report-on-e_commerce.pdf?la=enSource: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017

http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/facilitation/activities-and-programmes/ecommerce/wco-study-report-on-e_commerce.pdf?la=en

41

New WCO Report on

Cross-Border E-commerce*

*http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/facilitation/activities-and-

programmes/ecommerce/wco-study-report-on-e_commerce.pdf?la=enSource: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017

http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/facilitation/activities-and-programmes/ecommerce/wco-study-report-on-e_commerce.pdf?la=en

42

Paperless trade

coverage of RTAs

1

1

1

1

2

2

2

2

3

3

3

3

4

4

5

6

6

6

6

6

7

7

8

8

9

9

9

9

10

12

12

13

13

14

14

15

15

21

0 3 6 9 12 15 18 21 24 27

Pakistan - China

Japan - Mexico

China-Singapore

Chile-Japan

Switzerland - China

Iceland - China

EFTA-Hong Kong

China-Costa Rica

New Zealand-China

India - Japan

Chile-China

ASEAN-China

Japan - Philippines

Japan - Peru

WTO TFA

Rep.of Korea-India

Rep. of Korea-…

Nicaragua - Taiwan,PoC

Japan - Thailand

Hong Kong- Chile

Rep.of Korea-New Zealand

Japan-Mongolia

Peru-China

Japan - Switzerland

Singapore-Taiwan,PoC

Hong Kong-New Zealand

EU-Rep.of Korea

Canada-Rep.of Korea

New Zealand-Taiwan,PoC

Rep.of Korea-Singapore

Australia-China

Peru-Rep.of Korea

Japan-Australia

Rep.of Korea-Viet Nam

Rep.of Korea - Australia

Rep.of Korea-US

China-Rep.of Korea

TPP

Figure 2. Paperless trade

coverage in RTAs of East Asian

Economies since 2005

Figure shows number of

measures (our of 27) that are

featured in each RTA

Measures mainly found in TF &

Customs chapters, and e-

commerce chapters

Regional findings:

TPP most far reaching

Rep.of Korea, USA, and

Australia/N-Z leading

East Asia is leading

subregion, followed by

South-East Asia

RTAs of South and Central

Asia are (far) behind; India

as a leader

0% 10% 20% 30% 40% 50%

E-submission of Sea Cargo Manifests

E-application for customs refunds

E-system of Export/Import Permits

E-system for SPS certification

E-payment system

Single Window System

E-submission of Air Cargo Manifests

Meeting standards for E-signature and E-authentication

Interoperability of digital certificates used by business

E-exchange of COO related information

E-exchange of SPS related information

Proving regulatory compliance of E-transactions

E-system for COO application/processing

E-System for Risk Management

(Mutual) Determination and recogniton of authentication technologies

Promote e-exchange of data/documents

Mutual recognition of digital certificates and electronic signatures

E-system for inter-organization communication

E-transmission of financial information

Acceptance of e-copies

Electronic record-keeping

E-submission of trade-related data/docs

E-Customs System/Customs Automation

E-exchange of TBT related information

Laws for electronic transactions

E-certification and e-signatures

Use of international standards in paperless trade measures

43

Frequency of

paperless trade

measures in RTAs

90 of 138 RTAs (65%) contain

at least one paperless trade

measure

30 RTAs (22%) have a

dedicated “Paperless Trading”

or “Paperless Trade

Administration” provision

Wide diversity in the type of

paperless trade measures

included “Single window” specifically

mentioned in very few agreements

45

Measure/Provision

1 Acceptance of e-copies

2 E-submission/processing of trade-related data/documents

3 E-submission of Sea Cargo Manifests

4 E-submission of Air Cargo Manifests

5 E-system of Export/Import Licenses or Permits

6 E-system of SPS certificates

7 E-system of COO

8 E-record keeping

9 E-payment system

10 E-application for customs refunds

11 E-Customs System/ Customs Automation

12 Automated System for Risk Management and targeting

13 Single Window System

14 E-system for inter-organization communication

Typology of Paperless trade related provisions & measures

Based on the review, compiled a list of 27 paperless trade related provisions

and measures


46

15 Laws for electronic transactions

16 Use of electronic certificates and electronic signatures

17 (Mutual) determination of authentication technologies

18 Proving in court legal compliance of E-authentication

19 Meeting standards for E-signature and E-authentication

20 Mutual recognition of digital certificates and E-signature

21 Interoperability of digital certificates used by business

22 Trade-related electronic data exchange

23 E-exchange of COO related information

24 E-exchange of SPS related information

25 E-exchange of TBT related information

26 E-transmission of financial information

27 Use of international standards for paperless trade

Typology of Paperless trade related provisions & measures


47

A closer look:

Paperless trade in selected RTAs in Asia-Pacific

8 RTAs selected from 2005 to 2016

Articles on “Paperless Trading” found to

typically feature 3 key elements:

Endeavour to (1) make electronic

versions of their trade administration

documents available publicly,

Endeavour to (2) accept trade

documents submitted electronically

as the legal equivalent of their paper

version.

[Commitment to (3) exchange views

and/or cooperate with each other as

well as internationally to enhance the

acceptance of electronic documents.]


48

A closer look:

Paperless trade in selected RTAs in Asia-Pacific

Looking at the coverage of the 27

paperless trade measures:

All feature acceptance of

electronic copies

Strong commitments on

Customs automation and risk

management in recent RTAs

Promotion of acceptance and

mutual recognition of e-

authentication and e-signatures

Emerging commitments towards

cross-border e-exchange of

information (including related to

SPS and TBT)


49

FACILITATING CROSS-BORDER E-COMMERCE…

e-

e-e-e-

e- e- e-


DIGITAL TRADE –SDG 2030

Today’s cross-border trade in developing countries are dominated by women. Rwanda 74%, Cambodia 86% or China 55%.

THAILAND’S BORDER TRADE

7% of all global cross-border B2C commerce are border trade (UNCTAD Oct 2017, Information Economy Report

*Latency effect from Pre-Feasibility Report

WTO GENEVA MINISTERIAL SESSION 1998

Called for a Moratorium to Not Impose Custom Duties on Electronic Transmissions

DE MINIMIS THRESHOLD

Currently no international accepted norm or standard of practice

Versus Tax holidays

PROMOTING DIGITAL TRADE

Frictionless and Digital Trade led development key dependencies

Pillar 1 Connectivity (hardware and software)

Pillar 2 Traffic and Network Management (cross-border data exchange)

Pillar 3 Broadband for All (socio-economic inclusive development, mSME)

Pillar 4 e-Resiliency (security)

QUESTIONS

Moving Towards Hardware to Software (Pillar 1, 2, 3 and 4)

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