Capacity Building Workshop on Trade Facilitation Implementation for Asia and the Pacific Region

1. Capacity Building Workshop on Trade Facilitation Implementation for Asia and the Pacific Region Integrated Model on Trade Facilitation and e-Business2005-03-17/18, KL, Malaysia Jean E. Kubler jean.kubler@unece.org UNITED NATIONS ECONOMIC COMMISSION FOR EUROPE

2. UN/CEFACT Mission Simple, Transparent and Effective Processes for Global Business. • Develop and maintain international standards and instruments; • Integrating UN/CEFACT’s instruments into the new policy frameworks; • Strategic capacity building and promotion to support gretaer implementation of existing instruments UNECE regional level and cooperation with other UN Regional Commissions and organizations

3. Time and Cost implications £ Added value Omagh to Algeria. 1 Order – 360 net tonnes, 21 weeks Payment by customer and cost Retail sale Payment of Unload and store transport and FOB charges Delivery to customers warehouse Inwards clearance Main vessel off-loading Proof of export Sea Crossing Refund payment and administration Main vessel loading Exit clearance from community Delivery to port Unload, re- pack Dehire GKN pallets Delivery to customs warehouse Documentation Refund claim Invoice and order administration Load and despatch Customs formalities (Inland) Pre-shipment Inspection Manufacture Short Lead Components Documentation Export Licence Request Health Certificates, Licences Artwork Order receipt and administration Long Lead items Credit Arrangements Enquiry Validation 12 13 15 16 19 21 Weeks (approx)

4. Competitiveness of a nation Current Logistics Cost/GDP Thailand ~ 25-30% ~ 11% Japan ~ 10% USA EU ~ 7% • Logistics – Efficiency flow of Goods • Logistics Cost in Thailand is quite high. • Cost reduction opportunity in Logistics • For example 5%of GDP ~ 7.5 Million USD

5. Drivers of Supply Chain Performance Competitive Strategy Supply Chain Strategy Efficiency Responsiveness Supply Chain Structure Inventory Transportation Facilities Information Drivers Source: Chopra & Meindl 2001

6. Ministry of Trade Ministry of Transport Ministry of Finances Door-to-door Logistics Trade facilitation measures Customs reform & modernization Private Sector Actor : Institutions Reduce transaction costs Monitor external trade flows

7. Actor: Enterprises Source : Complex Networked Supply Chain [Harwick, 1999

8. The UN/CEFACT Vision Total Trade Transaction – Integrated supply-chain Competitiveness – trade efficiency Trade facilitation

9. Enterprise Services & Applications Internet Kiosk Citizens Portal Framework Government Systems Adaptor Telephony C H A N N E L S Single Window, UN/CEFACT Rec 33 Rec 4 Private Sector Enterprise ServiceDelivery Face to Face Governments Wireless e-Mail Letters Fax Brochures Private Sector Systems Adaptor Enterprise Intelligence Employees High Speed Backbone Server & Storage IP Integrated Network IP Convergence Service Continuous Business Operation SMC Processes Security ExternalSystems Enterprise System Mgmt Forms Infrastructure Integration and conectivity

10. The International Trade Transaction Process Intermediary BUY SHIP PAY Seller Buyer Authority

11. The International Trade Transaction Process BUY Establish Business Agreement Request Quotation Negotiate Agree Contract Order INVOLVES • Commercial Procedures • Establish Contract • Order Goods • Advise On Delivery • Request Payment

12. The International Trade Transaction Process SHIP V: Transit - VIII: Proportionality- X: Publication Prepare for Export Export Transport Prepare for Import Import INVOLVES • Regulatory Procedures • Obtain Import/Export Licences etc • Provide Customs Declarations • Provide Cargo Declaration • Apply Trade Security Procedures • Clear Goods for Export/Import • Transport Procedures • Establish Transport Contract • Collect,Transport and Deliver Goods • Provide Waybills, Goods Receipts Status reports etc.

13. Article V

14. The International Trade Transaction Process PAY Prepare for Payment Request Payment Initiate Payment Execute Payment Advise Payment INVOLVES • Financial Procedures • Provide Credit Rating • Provide Insurance • Provide Credit • Execute Payment • Issue Statements

15. TODAY (A methodology) W H Y Business Requirements Example Validation rules BUSINESS MODEL Information flow Usage guidelines Format specs Usage rules W H A T Logical Design Field specs Scope TRANSACTIONS & DOCMENTSS H O W Technical Implementation INTERNET Codification and transfer of knowledge Unified Modelling Methodology (UMM) June 2005 – 4 BRS UN/CEFACT Standards YESTERDAY (informal description)

16. Combined Approach UNeDocs XML or UN/EDIFACT <?xml version="1.0" encoding="UTF-8"?> <n:Invoice xmlns:n="urn:oasis:names:tc:ubl:Invoice:1.0:0.70" xsi:schemaLocation="urn:oasis:names:tc:ubl:Invoice:1.0:0.70 UBL_Library_0p70_Invoice.xsd"> <cat:ID>token</cat:ID> <cat:IssueDate>2003-02-14</cat:IssueDate> <n:TaxPointDate>2003-02-14</n:TaxPointDate> <cat:BuyerParty> <cat:PartyName> <cat:Name>Bills Microdevices</cat:Name> </cat:PartyName> </cat:BuyerParty> <cat:SellerParty> <cat:ID/> <cat:PartyName> <cat:Name>Joes Office Supply</cat:Name> </cat:SellerParty> <cat:InvoiceLine> <cat:ID>1</cat:ID> <cat:InvoicedQuantity unitCode="token">5</cat:InvoicedQuantity> <cat:Item> <cat:Description>Pencils, box #2 red</cat:Description> </cat:Item> </cat:InvoiceLine> </n:Invoice> Electronic Edit Form Paper Document aligned to UN Layout Key

17. Objectives must be clear Facilitation Efficiency • Production • Private • National • trade • Exchange of goods and services • Government • Regional • Security Colombus Ministerial Declaration on Trade Efficiency, UNCTAD 1994 Balance revenue enhancing, economic efficiency, security, external trade policy for market access

18. Definition Export formalities raise the transaction cost Trade facilitation is to analyze, rationalize and inter-relate the fundamental requirements of the national/international trade transaction. This requires taking into account the essential, underlying reasons for these activities - including the purposes of a range of official controls and the functional background to change of ownership and responsibilities, the assessment and imposition of duties and taxes and various modes of payment for goods or related serviceselements of international processes, procedures and transactions and working for the elimination of constraints (J. Raven, 1994) Trade Facilitation increase efficiency and support export transaction

19. International Standards add value and are scalable • All UNECE Recommendations, codes, standards and publications are available for free on our website at: • www.unece.org/trade • www.uncefact • www.unece.org/etrades/unedocs/ • www.unemed.net

20. Key steps on the road to paperless trade • The Win Win Situation • Better Information, structured Information, Advance Information, Automation • Governments: • Risk assessment, Security, Compliance, market access, Information Society • Trade: • Transaction and SC risk, costs, services

21. Win win is not enough to make it happen • Clear understanding of benefits/costs • Enabling Framework • Strong leadership and commitments • International Cooperation and Pathfinder Projects • Roadmap for Paperless trade in International Supply Chains

22. Paperless Trade in International Supply Chain • Enhancing Efficiency and Security • SC Information: Current trends and future orientation • Benefits: Governments and Trade • Experience: Single Window Implementations • What do we need to make it happen? •  Roadmap for paperless trade

23. On the road to.. An internationally agreed meaningful roadmap, including existing and current developments, to achieve efficiency and security in the supply chain .... • APEC Symposium 04-07-21/23 • UN/CEFACT Forum, 04-09-13/17, US WAS • Capacity Building Workshop on Trade Facilitation,2004, GVA, CH • 6th. UN/CEFACT Forum, March 2005, Malaysia • Capacity Building Workshop on Trade Facilitation,2005, Malaysia • 3rd. International Forum on Trade facilitation, 05-06-20/21, CH, VA • 11th. UN/CEFACT Plenary, 05-06-22/24, CH GVA

24. UN/CEFACT SIMPLE, TRANSPARENT AND EFFECTIVE PROCESSES FOR GLOBAL BUSINESS. www.uncefact.org