South Asia Sub-regional Economic Cooperation (SASEC)

Experiences on Trade Facilitation

Bottlenecks

SnapshotsBangladesh Economy –at a glanceIntroduction of SASECBenefits of Trade FacilitationTrade Facilitation Bottlenecks-ExperiencesTrade Facilitation initiatives in BangladeshWay Forward

Present Status of Bangladesh Economy

GDP at current price US $116 billion, 6.32% growth rate

GDP Composition: Industrial Sector 31.26 percent Agriculture 19.29 percent Service Sector 49.45 percent

Exports US $ 24.28 bn, Imports US$ 35.51 bn Remittance US $ 12.84 bn(increasing gradually) Foreign Exchange Reserve US$ 10.36 bn FDI Inflow US$ 1.13 bn Government Revenue US$16.62 bn Gross Investment is 25.45% of GDP

Present Status of Bangladesh Economy (2011-12)

SASECSouth Asia Sub-Regional Economic Cooperation

(SASEC) was set up in 2001 as an initiative of Bangladesh, Bhutan, India, and Nepal.

Aims to promote domestic and regional prosperity through stronger transport links and increased trade and cooperation across sectors ranging from energy, tourism, the private sector and the environment

Trade Facilitation and SASECTrade Facilitation can help to achieve higher growth

and economic development in SASEC countries

Trade Facilitation, can create possibility to go for more industrialization by expediting the movement, release & clearance of goods including goods including transit.

It is of course true that Trade alone can not create employment if it is not supported by the Domestic Policies.

Benefits of Trade FacilitationTF not only help in having monetary gains,

but increasing transparency, reducing cost of doing business & increasing business opportunity

It amplified customer value & improved security and increased revenue

SMEs in relation to larger companies are benefitted and can grow more efficiently

Trade Facilitation Bottlenecks

Key elements of Trade Facilitation

It is imperative that four key elements are present for a successful trade facilitation process:A strong political will;A clear strategic plan;A close co-operation with the business community;A well-funded and long-term technical assistance

program based on a partnership between donor and recipient.

Trade Discouraging NTBs faced by Business

Processing or clearance delays at borders or portsLack of transit and transport agreementCompliance with sanitary and phyto-sanitary (SPS)

standards Technical barriers to trade (TBT)Weak logistics systemsPoor infrastructure High administrative fees, storage and handling costs Limited IT usageLack of accreditation facilitiesExcessive documentationLack of cooperation and coordination among trade

supporting organizations

Possible NTBs in Trade in Services Thresholds on the total value of service transaction

Restrictions on the number of service operations

Limits on the number of natural persons to be employed in case of supply for a particular service

Measures which force a service supplier to supply a service  through a particular set of legal means

Limits on the percentage share of foreign investment which  may  be  accounted for by foreign shareholders 

Trade Facilitation Bottlenecks..Limited information about overseas markets and

marketing consumers goodsAdditional market entry barriersLack of attention behind and between bordersAbsence of comprehensive Aid for Trade AgendaBarriers to the international markets of goods and

procedures at and around the bordersSkilled human resources and technologyCost of trading remains high-prevents potential

exporters competing in the global and regional markets

Trade Facilitation BottlenecksCompliant with the TF Measures is almost impossible

for an LDC country like BangladeshAmong the 39 Measures some of the provisions have

partially been addressed but some provisions are very difficult to implement, such as; Detention, Test Procedures, Pre arrival processing, Establish and publication of average release time, Border agency cooperation, Use of international standards , Single window, Customs cooperation etc etc which will need more time.

Issues of Advance Ruling, Risk management issues also are similarly important and will require time

TF Bottlenecks contd…As an LDC Bangladesh has already identified

their Trade Facilitation Needs and Priorities and is trying to address these issues while the cost implications of these proposed measures is huge

Bangladesh needs to identify what type of Technical Assistance and support for Capacity Building is required to be compliant with these measures

LDCs are already suffering for infrastructural bottlenecks, Bangladesh is not an exception

Trade Facilitation Initiatives

Trade Facilitation Initiatives

Bangladesh has already pursuing liberalized trading regime

Customs procedures have been simplified & modernized substantially.

Infrastructure & facilities at different customs points, different sea & land ports have been improved.

Ministries have their own websitesASYCUDA ++ is also in place, ASYCUDA

World in in processChittagong Port is under several reforms.

Cont...Full Automation of Chittagong Customs House

& Automation of Dhaka Customs House PSI has reduced physical inspection of

consignments, from 100% in 1999 to around 10% now.

Number of pre-clearance signatures has gone down to 5 from 25, & export clearance time for 95% of consignments has been reduced from 72 hours in 1999 to 3 hours now

Appointed Tax Ombudsman to facilitate good governance in Tax & Tariff measures.

Cont...New-mooring Container Terminal (NCT) at

Chittagong Port is under construction. It will ease the current vessel and

container congestion a lotGovernment and Private sector is working

very closely

The way forward

The Way ForwardHarmonization of trade documents Adoption of the HS nomenclature and use of

internationally agreed standard data elementsOnline publication of relevant trade regulations and

procedures, including fees and charges, in the local language and in English

Establishment of a national trade facilitation committee,

Establishment of enquiry points and single national focal points for trade regulations and other trade facilitation issues, and

An effective appeal procedure for Customs and other agencies rulings.

Thank You