unnext workshops on trade facilitation - un escap
TRANSCRIPT
UNNExT Workshops on Trade Facilitation
Almaty, Kazakhstan 4-6 May 2015
UNNExT Workshop on Paperless Trade Facilitation for Small and Medium-Sized Entreprises
Paperless trade facilitation for SMEs
Mark GOHPrepared for UNNExT workshop on paperless trade facilitation for SMEs4-6 May 2015, Almaty, Kazakhstan
Paperless trade facilitation2
Agenda
• Overview
– Key issues in TF in Asia
– SMEs and their challenges
• Priority bottlenecks
• ICT as the response
• ICT applications
– Pros
– Cons
3Paperless trade facilitation
Issues in TF
• What would the world be like without TF?– Cost, time, cross/ mutual recognition of products,
services, cash-to-cash cycle times
• How should policy look at these issues– Deal with them directly
– Let the business community deal with it (MNCs)
– Adopt PPP approach
• Are they important to warrant attention– Economic development, GDP, …
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Duval’s presentation (2012) …
Duval’s presentation (2012) …
18.75
4.75/23.5= 20% preparing for physical transport; 80% - preparing for trade - cf Pareto’s Law
Duval’s presentation (2012) …
18.75
4.75/23.5= 20% physical transport; 80% - preparing for trade - cf Pareto’s Law
1. Time non value added,
2. time is cost and loss in cash conversion,
3. cost translates to lost competitiveness
Trade Facilitation (TF) in Asia and the Pacific
• On average, it still takes 30 days to move goods from factory to deck-of-ship at the nearest seaport
– South Asia: 30 days, 6 days
– South-East Asia: 20 days, 4 days
– Developed economies: 10 days, 2 days?
à Improvements in TF could bring $250 billion in additional trade for Asia and the Pacific
So where is the paper? – look at key International Paper Forms
• Key International paper forms– Negotiable Bill of Lading– Insurance Certificate– Consular Invoice– Import/Export Licences– Letter of Credit– Cargo Declarations– Certificates of Origin, Phytosanitary
UNeDOCs recommends a single data modelling approach for:• Paper documents (>70% paper)• Electronic documents which are simply equivalent to paper
documents• Structured electronic documents UN/EDIFACT, Cargoimp, VDA,
XML etc.• Process driven mini messages, e.g. Web/Service Orientated
eTransactions
UNeDocs: Holistic Information Framework for Single Window
GOODS
PAYMENT
WTO’s perspective of Trade Transaction
S BINFORMATION
Is it really that simple???
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GOODS
PAYMENT
S BINFORMATION
GOODS
PAYMENT
S BINFORMATION
GOODS
PAYMENT
S BINFORMATION
GOODS
PAYMENT
S BINFORMATION
GOODS
PAYMENT
S BINFORMATION
Ctry A Ctry B
Ctry C
Ctry D
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GOODS
PAYMENT
S BINFORMATION
GOODS
PAYMENT
S BINFORMATION
GOODS
PAYMENT
S BINFORMATION
GOODS
PAYMENT
S BINFORMATION
GOODS
PAYMENT
S BINFORMATION
Ctry A Ctry B
Ctry C
Ctry D
High degree of convolution, challenge in recognition – harmonized system, Customs open hand in interpretation, longer than desired delays at borders, opportunities for informal facilitation, affects cashflow
Arrival Notice
Letter of InstructionInvoice, PO
Importer’s Bank
Ocean Carrier
Customs House Broker
Line of CreditProforma Invoice
Shipping & funding detail
Cargo Status
Vessel Booking Request
CargoStatus
Shipping & Funding Detail
Exporter’s Bank
Importer Exporter
Vessel Booking Confirmation
Bill of Lading
Rated Bill of Lading
Dock Receipt
Freight Forwarder / NVOCC
Purchase Order
LCConfirmation
AES
Dock receipt
Pick-up & Delivery Order
Vessel Manifest
Dock receipt
Release/Approval
Demurrageguarantee &payment
Inland Carrier
Manifest
Pick-up &Delivery Order
Importer Notice
Converted VesselManifest
Customs (Export)Port
Customs ( Import )
Original B/L,Invoice, PO,
Packing List
Inland Carrier
Marine Insurance Company
Fund Transfer
Confirmed Line of Credit
Release/HoldNotice
Purchase Exportation Importation
ImportTerminalOperator
Proforma Invoice
Export Declaration
Export Declaration
Bill of lading, Documentation
Import Docs
Export Terminal Operator
• 20 actors;• > 200 data elements;• Manual procedures;• Multiple data
systems;• > 30 documents or
messages.
Data exchangein International Trade
Qn: Where should policy intervene?
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Who are the stakeholders in TF?• Many different ministries and executive agencies
–Ministry of Transport, Ministry of Finance, Ministry of Trade, Ministry of Health, –Customs, Bureau of Standards, Veterinary services, Laboratories
• Private sector–Commercial banks–Freight forwarders, Importers-exporters–Customs Brokers– Shippers (MNCs & SMEs)
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INTERNATIONAL TRADE TRANSACTION PROCESS
CommercialProcedures
• Establish Contract
• Order Goods• Advise On
Delivery• Request Payment
TransportProcedures
• Establish Transport Contract
• Collect,Transport and Deliver Goods
• Provide Waybills, Goods Receipts Status reports
RegulatoryProcudures
• Obtain Import/Export Licences etc
• Provide Customs Declarations
• Provide Cargo Declaration
• Apply Trade Security Procedures
• Clear Goods for Export/Import
Financial Procedures
• Provide Credit Rating
• Provide Insurance
• Provide Credit• Execute Payment• Issue Statements
INVOLVES
Prepare For
ExportExport Transport Import
SHIPBUY PAY
Prepare For
Import
Qn: steps in each block, cost involved, expertise needed, transaction security especially $Paperless trade facilitation 16
• We want to address the what, where, how, and why, when(?) of TF for SMEs
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What should be objective of TF from policy makers’ perspective
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What should be objective of TF from policy makers’ perspective
• Nurture trade environment, regional or global that is
– predictable (in terms cost and time at the borders),
– secure (no concerns for shippers on transport and claims)
– cost efficient (open book, completely transparent and visible to users)
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How to achieve trade facilitation
• Simplification, Standardisation & Systemisation (Harmonization) of trade documents, procedures, practices
• Improving cross border logistics services
• Improving infrastructure (transport: intermodal & connectivity)
• Qn: how does each one speak to the SME??
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TRADE FACILITATION
Steps to remove all unnecessary elements and duplications in formalities, processes and procedures
Simplification Systemisation
Align national procedures, operations & documentation with international practices, conventions & standards.
Standardisation
Process to develop internationally agreed formats for practices & procedures, documents & information.
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TRADE FACILITATION
Steps to remove all unnecessary elements and duplications in formalities, processes and procedures
Simplification Systemisation
Align national procedures, operations & documentation with international practices, conventions & standards.
Standardisation
Process to develop internationally agreed formats for practices & procedures, documents & information.
Too many steps in process, not enough manpower, time consuming, lacking language and technical knowledge
Not well informed of national procedures, lacks access to platform to update and operate seamlessly
No knowledge of good provider to provide cost effective solution, lack of capability & capacity building (expertise & tech) –5M’s
SME
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Rec:19Mode of
Transport
Rec:16UN/Locode ISO Country
Code
Rec: 17Payment
Terms
Rec:9Currency Code
Rec:20 Units of Measurement
Rec: 28Means of Transport
Commodity Code
Rec: 21Package CodesPaperless trade facilitation 23
Look at framework for implementation
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Focus of Trade Facilitation Provisions based on TAs
(Bin and Misovicova, 2008)
Process Analysis and Simplification
National Data Harmonization
Cross Border Data Exchange
Single WindowSingle Window
Business/Political Process - Collaboration Between Trader and Government (UN/CEFACT Rec. 4, Rec. 18), UN/CEFACT International Supply Chain Reference model, Unified Modeling Methodology (UMM), Global Facilitation Partnership for Trade andTransport (GFP) Audit Methodology
UN Layout Key, Master Document,
UNTDED, TF Toolkit and Forms Repository
UNTDED, Core Component Library, UN LOCODE and code lists, UNeDocs, Rec 34
UNeDocs + WCO DM = CBRDM
Rec 33, 34,35
Document Simplification and Standardization
Step by Step ImplementationStep by Step ImplementationBased on International StandardsBased on International Standards
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Where do we begin
• Advanced stages (E-docs, Automated processing, Pre-arrival processing)
• IATA e-freight case
• Take a phased approach
• Clearly identify issues with SMEs that are predominantly involved in export market
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Concerns of SMEs
• Understanding technical regulations & standards
• Fees and protocol for using platform
• Assurance of security in trade (payment) and transit (T&L)
• Assurance of predictability - SMEs want predictability as it reduces need for inventory
• Transparency in release and clearance of goods, of laws and regulations
• Assurance in ICT and eCommerce
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Bottlenecks
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Priority bottlenecks
Bottleneck Priority to SME Good practice
1 Processing/ clearance delays at BCPs *** Bangladesh 72 hrs (1999) -> 3 hrs (2009)
2 Lack of transit and transport agreement *** Green lane
3 Compliance with SPS * Philippines
4 Technical barriers to trade ** Thailand
5 Weak logistics systems ** Thailand
6 Poor infrastructure ** Laos
7 High admin fees, storage & handling costs *** Singapore
8 Limited IT usage *** Korea
9 Lack of accreditation facilities * Singapore
10 Excessive documentation *** IATA (efreight)
11 Lack of cooperation and coordination among trade supporting organisations
*** Virtual 1-stop shop
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Other SME TF Bottlenecks...
• Limited information about overseas markets and marketing consumers goods
• Additional market entry barriers
• Lack of attention behind and between borders
• Absence of comprehensive Aid for Trade Agenda
• Barriers to the international markets of goods and procedures at and around the borders
• Skilled human resources and technology
• Cost of trading remains high-prevents potential exporters competing in the global and regional markets
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Trade Facilitation Bottlenecks
• Among the 39 Measures some of the provisions have partially been addressed but some provisions are very difficult to implement eg Detention, Test Procedures, Pre arrival processing, Establish and publication of average release time, Border agency cooperation, Use of international standards, Single window, Customs cooperation - these need more time.
• Issues of Advance Ruling, Risk management are similarly important but require time
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Summary
Imperatives for successful TF framework:
Østrong political will;
Øclear strategic plan;
Øclose co-operation with business community;
Øwell-funded and long-term technical assistance program based on partnership & trust
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