SESSION 1 TRADE FACILITATION AT THE WTO AND IN OTHER … … · Facilitation and its Objectives...

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SESSION 1 – TRADE FACILITATION AT THE WTO AND IN OTHER

TRADE AGREEMENTS

Wenguo CaiDirector, International Programs

Conference Board of Canada

Alexandre Larouche-Maltais Senior Trade & Investment Expert

Conference Board of Canada

Jakarta, April 24-25 2018

Outline: Trade Facilitation at the WTO and in Other Trade Agreements

• What is trade facilitation?

• WTO/WCO, and United Nations

• APEC and ASEAN

Defining Trade Facilitation

• Why facilitating trade?

• How can the TFA help?

• TFA structure and categorization of measures

Facilitating Trade at the Multilateral Level

• Indonesia’s bilateral FTAs

• ASEAN trade facilitation commitments

Regional Initiatives

Part 1

Part 2

Part 3

PART 1DEFINING TRADE

FACILITATIONWhat is trade facilitation?

WTO/WCO, and United NationsAPEC and ASEAN

WTO/WCO Definition

“The simplification and harmonization of activities, practices, and formalities

involved in collecting, presenting, communications and processing data required for the movements of goods in

international trade ” (1998)

Covers Goods Only:

•GATT Article V (Freedom of Transit)

•GATT Article VIII (Fees and Charges)

•GATT Article X (Publications –Transparency)

United Nations Definition

“the simplification, standardization and

harmonization of procedures and associated information

flows required to move goods from seller to buyer and to

make payment”

Much broader, covers:

•customs procedures

• information flows

• financial payment

APEC Definition

“the use of technologies and techniques which will help

members to build up expertise, reduce costs and lead to better

movement of goods and services.” (1999)

“Refers to the simplification, harmonization, use of new

technologies, and other measures to address procedural and

administrative impediments to trade.” (2002)

Even broader, covers:

• Goods

• Services

• Transport, etc.

ASEAN Definition

“Plumbing of International Trade”

ASEAN Trade Facilitation: WTO FTA + standards, customs

procedure, transport facilitation, and regional initiatives such as ASEAN single window, ACTS, ATR/NTR, ASSIST and other

trade matters

Broadest definition of trade facilitation

AEC 2025 Trade Facilitation Strategic Action Plan – very

ambitious

PART 2FACILITATING TRADE

AT THE MULTILATERAL LEVEL

Why facilitating trade?

How can the TFA help?

TFA structure and categorization of measures

WHY FACILITATING TRADE?

BECAUSE inefficient border procedures impact on countries' economic attractiveness!

10

Companies need to import and export efficiently and at minimal cost to be

able to integrate successfully in global value chain

Every day saved in the shipment process translate into 0.8% ad-

valorem cost reduction

Doing Business figures are a key decision criteria for MNC investments

abroad

The cost and efficiency of crossing borders impact on enterprises

BECAUSE border inefficiencies translate into direct and indirect costs impacting business competitiveness…

11

Direct

costs

Time and resources invested in managing export administrative activities

Collect, produce, transmit and process required information and documents

Indirect

costs

Increased operational costs

Delays translate into extra transport, insurance or warehouse costs

Increased working capital requirements

Inventories immobilized are carried out by the exporter (except for EXW sales)

Product deterioration

Delays can lead to the degradation of products and render them unfit for sale

Lost business opportunities

Direct: joining a punctual regional trade

Indirect: immobilized stock could have been sold to a local client

1

2

3

4

What about East Asia and the Pacific?

31

42

57

61

94

97

99

112

102

0 20 40 60 80 100 120

Hong Kong

Singapore

Thailand

Malaysia

Vietnam

China

Philippines

Indonesia

Regional Average

GLOBAL RANKING

Global ranking of national

economies (out of 190) in the

East Asia and the Pacific

region for ease of trading

across borders

World Bank Doing Business

2018

BECAUSE regional competitors are performing better than Indonesia

Trading across Borders

3

12

55

57

62

105

114

114

124

0 20 40 60 80 100 120 140

Hong Kong

Singapore

Malaysia

China

Thailand

Vietnam

Philippines

Indonesia

Regional Average

TIME TO EXPORT (HOURS)

What it takes to trade across

borders in economies in East

Asia and the Pacific (EAP)


2018

Trading across Borders

57

320

339

366

372

391

499

509

568

0 100 200 300 400 500 600

Hong Kong

Thailand

Vietnam

Malaysia

Singapore

Indonesia

Regional Average

Philippines

China

COST TO EXPORT (USD)

What it takes to trade across

borders in economies in East

Asia and the Pacific (EAP)


2018

HOW CAN THE TFA HELP?

TFA can reduce international transaction costs

Overall potential trade cost

reduction by income group

Source: OECD

•TF measures at the border

have a high potential for cost

reduction

•From 13% to 15% depending

on countries’ income levels

14%

15%

13%

LIC LMIC UMIC

What businesses want to improve their exports competitiveness

What do traders want ? What does the TFA provide ?

Art. 1 – Easily accessible trade related informationArt. 3 – Issuance of advanced rulings

Transparent, accessible an predictable rules and procedures

A single access point for all public services et agencies

Standardized formsArt. 10.3 – International standards to promote uniform documentation and data requirements

Art. 8 – Border agency coordinationArt. 10.2 – Acceptance of copiesArt. 10.4 – Establishment of a “single window”

What do traders want ? What does the TFA provide ?

Art. 10.7 – Common border procedure and documentationArt. 10.1 – Periodic review of formalitiesArt. 7.4 – Risk management

Simple, efficient and uniform formalities

Be part of the policy making process

Just and rewarding systemArt. 4 – Procedures for appeal or reviewArt. 7.7 – Authorized operators

Art. 2 – Opportunity to comment regulations before entry into force and public-private consultationArt. 23 – Set-up of NTFC

What businesses want to improve their exports competitiveness

TFA STRUCTURE AND CATEGORIZATION OF

MEASURES

TFA Structure

PreambleSection I –Substantive Provisions

Section II –Special and Differential Treatment

Section III –Institutional

arrangements and final

provisions

Agreement on Trade Facilitation

TFA Structure





provisions


TFA Objectives

Clarify and improve GATT Art. V, VIII and X

Recognize LDCs' particular needs

Recognize the need for cooperation on trade facilitation and customs compliance

TFA Structure





provisions


Art. Scope

Art. 1-5 Transparency

Art. 6-10 Fees and Formalities

Art. 11 Transit

Art. 12 Customs Cooperation

TFA Structure





provisions


Cat. Implementation

A Implementation upon entry into force

B Transition period

CTransition period + financial and/or

technical assistance

TFA Structure





provisions


Institutions

MultilateralArt. 23.1 WTO Trade

Facilitation Committee

NationalArt. 23.2 National Trade Facilitation Committee

PART 3REGIONAL INITIATIVES

Indonesia’s bilateral FTAs

ASEAN trade facilitation commitments


Preamble

“Believing that such bilateral relationship will be enhanced by forging mutually beneficial economic partnership through, inter alia, cooperation, trade and investment facilitation, and trade liberalization;”

Article 1 – Objectives

The objectives of this Agreement are to: (a) facilitate, promote and liberalize trade in goods and services between the Parties;

Indonesia-Japan EPA(2007)


Article 56 – Sub-Committee on Customs Procedures

For the purposes of the effective implementation and operation of this Chapter, the functions of the Sub-Committee on Customs Procedures (…) shall be:

identifying areas, relating to this Chapter, to be improved for facilitating trade between the Parties

Indonesia-Japan EPA(2007)

ASEAN TRADE FACILITATION COMMITMENTS

Indonesia’s TF commitments

Bilateral and regional FTAs

Indonesia-Japan EPA (2007)

ASEAN Trade in Goods Agreement (2009)

ASEAN-Japan CEPA (2008)

ASEAN-India CECA (2010)

ASEAN-Australia & NZ FTA (2010)

2009 ATIGA

CHAPTER 5: TRADE FACILITATION

Art. 45 – Work Programme on Trade Facilitation and its Objectives

Art. 46 – Scope of the ASEAN Trade Facilitation Work Programme

Art. 47 – Principles on Trade Facilitation

Art. 48 – Progress Monitoring of Trade Facilitation

Art. 49 – Establishment of the ASEAN Single Window

Art. 50 – Implementation Arrangement

CHAPTER 6: CUSTOMS

Similar to WTO TFA measures








2016 ASEAN Trade Facilitation Framework (ATFF)

ATFF aims at consolidating (ASEAN & WTO instruments) and it provides a basis upon which Member States can further engage and foster greater trade facilitation regionally.

Scope of ATFF:

a) Customs and transport facilitation

b) Transparency of trade regulation and procedures

c) Standards and conformance; and

d) Private sector engagement and business facilitation.








2016 ASEAN Trade Facilitation Framework (ATFF)

Objectives:

a) Efficient movement of goods

b) Minimize impact of NTMs, and achieve elimination of NTBs

c) Promote private sector engagement

d) Address development gars amongst members

e) Enhance ASEAN institutional coordination

f) Improve monitoring of TF measures

g) Encourage WTO & WCO instruments implementation

FTAs between ASEAN and third countries

ARTICLE 2 – Measures For Comprehensive Economic Co-operation

The Parties agree to negotiate expeditiously in order to establish an ASEAN-China FTA within 10 years, and to strengthen and enhance economic co-operation through the following:f. establishment of effective trade and investment facilitation measures, including, but not limited to, simplification of customs procedures and development of mutual recognition arrangements;

ASEAN-China Framework Agreement on Comprehensive Economic Co-Operation (2002)


Article 22 – Customs Procedures

Each Party, recognising the significant role of customs authorities and the importance of customs procedures in promoting trade facilitation, shall endeavor to:

(a) simplify its customs procedures; and(b) harmonise its customs procedures, to the extent possible, with relevant international standards and recommended practices such as those made under the auspices of the Customs Co-operation Council. ASEAN-Japan CEPA

(2008)


ARTICLE 14 – Customs Procedures

1. Each Party shall endeavour to apply its customs procedures in a predictable, consistent and transparent manner.

ASEAN-India Comprehensive Economic Cooperation Agreement (2010)


ARTICLE 14 – Customs Procedures

2. Recognising the importance of improving transparency in the area of customs procedures, each Party, at the request of an interested person, shall endeavour to provide, as expeditiously and accurately as possible, information relating to its customs procedures to the interested person concerned. ASEAN-India Comprehensive Economic

Cooperation Agreement (2010)


ARTICLE 14 – Customs Procedures3. Each Party, recognising the significant role of customs authorities and the importance of customs procedures in promoting trade facilitation, shall endeavourto:(a) simplify its customs

procedures; and(b) harmonise its customs

procedures, to the extent possible, with relevant international standards and recommended practices such as those made under the auspices of the World Customs Organization.

ASEAN-India Comprehensive Economic Cooperation Agreement (2010)


Chapter 4. Customs Procedures

Art. 4 Customs Procedures and FacilitationArt. 5 Customs Co-OperationArt. 6 Use of Automated SystemsArt. 7 ValuationArt. 8 Advance RulingsArt. 9 Risk ManagementArt. 10 Confidentiality Art. 11 Enquiry PointsArt. 12 ConsultationsArt. 13 Review and Appeal ASEAN-Australia and New Zealand

Free Trade Agreement (2010)

Many thanks for your attention !

SESSION 1 TRADE FACILITATION AT THE WTO AND IN OTHER … … · Facilitation and its Objectives...

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