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Trade Facilitation and the Public-Private Partnerships

Trade Facilitation and the Public-Private Partnerships. Maria Misovicova, Trade Logistics Branch Division on Technology and Logistics. International Trade Transaction. Customs. Banks. Insurance companies. Company A. Company B. Other Gov’t Agencies. Transport Operators. Freight

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Trade Facilitation and the Public-Private Partnerships

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  1. Trade Facilitation and the Public-Private Partnerships Maria Misovicova, Trade Logistics Branch Division on Technology and Logistics

  2. International Trade Transaction Customs Banks Insurance companies Company A Company B Other Gov’t Agencies Transport Operators Freight Forwarders Product Supplier Manufacturer Wholesalers Retailers Customer DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  3. International Trade Transaction Process Source: UN/CEFACT SHIP PAY BUY Prepare For Export Prepare For Import Export Transport Import INVOLVES • Commercial • Procedures • Establish Contract • Order Goods • Advise on Delivery • Request Payment • Transport • Procedures • Establish Transport Contract • Collect,Transport and Deliver Goods • Provide Waybills, Goods Receipts Status reports • Regulatory • Procudures • 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 DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  4. Administrative bottlenecks vs. trade transaction costs • Administrative hurdles from cumbersome procedural and documentary requirements can account for up to 75% delay of shipments. Each additional day of delay may reduce trade volume by at least 1% or approximately 7% if the products are agricultural commodity (World Bank); • The costs of paperwork account for 3.5 – 7% of the value of the goods. (OECD) It can be as high as 10 – 15% if there are typing and other error (UNCTAD). 4 DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  5. Costs to export & import per region Source: WB, Doing Business 2010 DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  6. What is trade facilitation? WTO: the simplificationand harmonization of international trade procedures, where trade procedures are the activities, practices, and formalities involved in collecting, presenting, communicating, and processing data and other information required for the movement of goods in international trade. UN/CEFACT: the simplification, standardization, and harmonization of proceduresand associated information flows required to move goods from seller to buyer and to make payments 6 DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  7. Trade facilitation… … is a tool to reduce complexity and the costs of international trade, while maximizing its efficiency and effectiveness; … helps to create a consistent, transparent, and predictable environment for conducting international trade; … should be a part of the country’s comprehensive trade development strategy, and not a stand alone issue. DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  8. Scope of trade facilitation Narrow - At-the-border: preparation of trade and customs documents, customs clearance procedures, border control, and release of goods. Broad - Behind-the-border: transport and logistics services, product standards and conformity assessment measures, e-commerce, business facilitation, and trade finance. 8 DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  9. Examples of trade facilitation measures • Simplified and standardized trade documents; • Automated customs procedures; • Single window for international trade; • Pre-arrival clearance; • Post-clearance audit; • Risk management & Authorized economic operator concept; • Online portals containing all trade-related laws, regulations, procedures, forms ad documents. DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  10. Trade facilitation & the public-private partnerships • Government creates a national trade policy framework, regulates, enforces and controls… • …while the private sector undertakes most of the trading and faces the day-to-day bottlenecks in trade; • Public-private working relations are vital for trade facilitation reforms to succeed. DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  11. Different stakeholders, different interests DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  12. Forms of collaboration between public & private sector in trade facilitation Trade facilitation platforms Public-private partnerships Voluntary & collaborative relationships Sharing risk and investment • Construction & modernization of border posts • Provision of automation software • Development & operation of electronic Single Window and Paperless Trade systems • National Trade and Transport Facilitation Bodies • Pro Committees • Collaborative trade facilitation platforms to support TF negotiations at the WTO • Customs-business partnerships (e.g. AEO schemes) DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  13. Collaborative trade facilitation platforms DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  14. Collaborative trade facilitation platforms and UNCTAD’s support • Originating in needs self-assessment under the WTO trade facilitation negotiations; • No one-size-fits-all formula => different types such as: • Institutionalized - national trade and transport facilitation committees (e.g. in Pakistan, Mongolia, the UK, Nordic countries, South Europe); • Ad hoc advisory bodies – national TF task forces (e.g. in West Africa and the Caribbean); • UNCTAD’s support to establishing the national and subregional collaborative task forces in UEMOA and OECS countries; • Joint UNCTAD/UNECE Online Repository of Trade Facilitation Task Forces (http://r0.unctad.org/ttl/repository/TFWGintro.htm); • Technical Note No. 18 – used by St Lucia for its communication under the WTO TF negotiations (JOB(09)/11 of 2 March 2009). DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  15. Collaborative trade facilitation platforms and UNCTAD’s support (cont’d) • Examples of suggested activities for national TF task forces: • Support the negotiation and subsequent implementation of obligations arising out of the agreement; • Act as a liaison between national trade facilitation authorities and the WTO Trade Facilitation Committee; • Monitor the implementation of obligations arising out of other bilateral agreements; • Assist national authorities in determining priorities for donor support; • Disseminate information on policy developments in trade facilitation; • Provide policy guidance to relevant authorities including the Cabinet of Ministers; • Support public awareness of matters related to trade facilitation; • Integrate the concerns of the private sector into the formulation of policy on trade facilitation. 15 DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  16. Steps to establish effective national trade facilitation task force Based on UNCTAD, Technical Note No.18 16 DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  17. Traditional PPPs in trade facilitation: Example of a Single Window for international trade DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  18. Single Window concept in international trade • Single Window is: a one-stop facility to exchange information between traders and government, thereby reducing the complexity, time and costs involved in international trade. A more precise definition can be found in the UNECE-UN/CEFACT Recommendation No. 33 on Establishing a Single Window for international trade DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  19. Single Window concept in international trade(cont’d) OGAs OGAs CUSTOMS CARRIER CUSTOMS CARRIER WHARFINGER HAULIER WHARFINGER HAULIER 1 0 0 Single Window CUSTOMS PORT CUSTOMS PORT BROKER AUTHORITY BROKER AUTHORITY LINE CONSIGNEE LINE AGENT CONSIGNEE AGENT CONSIGNOR CONSIGNOR TO FROM 19 DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  20. PPP-based business models for Single Window • As the implementation of a SW is rather complex, requiring substantial investment, specific technologies, knowledge and skills, governments often seek partnerships with the private sector. • PPP offers the potential for the public sector to tap into the private financial resources, management knowledge, technology and skills for the most efficient provision of essential infrastructure for trade. DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  21. PPP-based business models for Single Window (cont’d) • The most common public-private partnership business model for a single window is a commercial entity that serves as a ‘special purpose vehicle’ (SPV). • SPV: • Functions on an investment- and risk-sharing basis as a joint venture between one or several government sector agencies. • Usually builds, operates and maintains/ upgrades the single window. • Provides specific services, incl. value added network services (VAN), as well as training programmes and operates call centres, which are available to its users 24/7. DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  22. Key summary points • Int’l trade is a complex process, involving a large number of actors, regulations, procedures, and documents; • With falling tariffs and quotas under the GATT/WTO and RTAs, improving the efficiency of trade has become essential to enhance trade competitiveness of developing countries; • Trade facilitation is a tool to reduce complexities and costs of trade, thus enhancing countries international trade competitiveness (particular importance for landlocked and least-developed countries); DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  23. Key summary points (cont’d) 23 • Government sets policy frameworks, regulates and enforces, while business conduct trade on the ground => need for both to work closely together; • Various forms of public-private working relations to implement TF exist, ranging from collaborative TF platforms to traditional PPPs; • No one-size-fits-all solution, however a well of knowledge and best practice examples available from the int’l community, including UNCTAD. DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  24. Thank you! Maria Misovicova UNCTAD/ DTL Trade Logistics Branch Trade Facilitation Section Palais des Nations maria.misovicova@unctad.org www.unctad.org/ttl www.asycuda.org DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

  25. Questions DIVISION ON TECHNOLOGY AND LOGISTICS, TRADE LOGISTICS BRANCH, TRADE FACILITATION SECTION

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