World Bank Gap Assessment Study

1. Symposium on Practical Experience of Implementing Trade Facilitation Reforms, Including Their Costs and BenefitsNovember 8-9, 2011 World Bank Gap Assessment Study Gerard McLinden Customs and Border Management Practice Group International Trade Department The World Bank

2. Introduction • Assessment based on comparing the systems and procedures currently employed in three member countries against the measures outlined in TN/TF/W/165/Rev.11 • Drew on WB experience in developing Customs and Border Management reform programs (120 projects over last 20 years) • Builds on previous study undertaken by WB, WCO and IMF (November 2006)

3. Purpose The WTO Trade Facilitation Gap Assessment was designed to: • assess the gap between existing systems and procedures in place and the measures likely to be included in a new WTO Trade Facilitation Agreement; • identify any technical assistance and capacity building support needed to close the gap and ensure sustained and effective implementation and long term operation; and • prepare approximate cost estimates and indicative implementation timelines.

4. Assumptions and Qualifications • Focus beyond simple compliance to effective implementation to deliver trade facilitation benefits for governments and traders • Short missions (8 - 10 days in each country) • Covered needs of Customs and other border management agencies • Timetables based on probable rather than possible implementation timelines

5. Assumptions and Qualifications • Running costs not included as evidence supports positive resource offsets from TF measures • Cost calculations based on WB project design and implementation experience • Single Window • Cost estimates based on electronic SW • Connectivity with existing Customs system not total replacement of ICT infrastructure • B2G not B2B

6. Summary of Findings

7. General Observations • No country is starting from scratch – all have reform and modernization plans in place and have made genuine progress • Customs ahead of other government agencies in understanding TF agenda • Much donor support already provided – but mainly to Customs • High level of support for measures at the national level by public and private sector stakeholders …. but …. • All measures in keeping with existing global standards and good practice approaches

8. General Observations • Significant TA and capacity building support required in all countries …. but its not the only critical implementation challenge • Sequencing of reform implementation important • Implementation process needs to be managed holistically as many measures are interdependent • Donor support needs to be carefully coordinated based on an agreed comprehensive implementation plan …. Not piecemeal cherry picking of individual measures

9. One example of the need for careful sequencing due to interdependencies In order to successfully implement Art 10.1 (Review of formalities and documentation requirements) and 10.2 (Reduction and rationalization of these requirements) it is first necessary to identify and collate all requirements. This also needs to be undertaken to achieve Arts 1.1, 1.2 and 1.3 (Publication and Availability of Information) and would greatly assist effective implementation of Arts 2.1, 2.2 and 2.3 (Prior publication and consultation). In order to implement Article 10.4 (Single Window) Arts 10.1 and 10.2 need to be completed first.

10. One example of sequencing, logical task families and interdependencies All require strong and effective inter-agency coordination such as outlined in Art 9 (Border Agency Cooperation). That in turn requires a sound and fully effective coordination and governance mechanism as proposed under Art 14 (National Committee on Trade Facilitation). Logically, establishing the National Committee on Trade Facilitation would be a sensible first step

11. A simplified map of the international trade process Pay Taxes Clear Customs Release Goods DOMESTIC SUPPLY CHAIN Air, Sea, Land International Transport Storage Customs Port • Port Processes • Internal Transport • Storage • Container Handling • Loading • Raw Materials • Packaging • Transport • Storage Ship’s Documents IMPORTER • Quotations • P.O.s • Delivery Notes • Con. Notes • Invoices • Statements • Payments • Remittance • Advice • Invoice • Packing List • Declaration • Delivery Note • Manifest • Bills of Lading • Sea/AW Bill • Container Plans Book/Confirm Transport Pay Taxes Clear Customs Release to Port Shipping Documents Foreign Chambers Commerce Certificates Of Origin Customs MANUFACTURER Port Port Customs • Invoice • Packing List • Declaration • Delivery Note • P.O. • Contract Terms • Delivery Instructions • L.O.C. Receive Goods EXPORTER Overseas Embassies “Legal Invoices” FOREIGN BUYER • Certificates • Of Origin • Form A • EUR.1 Post/ Courier Chamber of Commerce Finance Ministry Pay Bank • Licenses • Certificates • Government • Approvals Bank Government Departments & PIAs • Licenses • Certificates • Government Approvals LOC Approval • L.O.C. • Packing List • Invoice LOC Courier

12. Necessary Preconditions for a National Committee on Trade Facilitation • Clear and unambiguous commitment translated into a concrete mandate • Agreed leadership, participation and governance model • Clearly identified: • Roles and responsibilities • Obligations • Performance measures and accountabilities • Budget/resources • Dispute resolution mechanism • Realistic future strategic vision – owned by alland translated into a comprehensive implementation plan

13. What next ? • WB and partners can undertake additional gap assessments but this exercise makes more sense when undertaken as part of the development of a comprehensive implementation strategy • Not a minor undertaking – WB projects take two years to design and develop • Multiple counterpart nature of proposed measures adds enormously to complexity • A coordinated effort from the development community will be essential to ensure technical assistance and capacity building resources are used most effectively

14. A useful resourcefor negotiatorsgmclinden@worldbank.org