Transcript GMS Cross Border Transport Agreement (CBTA) and Logistic

GMS BIZ Network Forum
6-10 September 2010
Mekong Institute Khon kaen Thailand
Mr. Oudet Souvannavong
Vice-President Lao National Chamber of Commerce and Industry,
Secretary General of the GMS Business Forum
Scope
GMS Infrastructure Connectivity
 Cross- Border Transport Agreement
(CBTA)
 Status of CBTA implementation
 Assessment of GMS Economic Corridors
 SME Business Networking in the GMS

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GMS
Corridors
3
GMS
Corridors
Road
Connectivity
4
GMS
Connectivity
Road Transport
Network
1992
2006
2015
(committed)
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The GMS Cross-Border Transport
Agreement (CBTA)

What is the CBTA?
 Multilateral agreement ratified by all six GMS
countries
 Purpose is to eliminate non-physical barriers
to cross-border transport in the GMS
 Includes references to existing international
conventions (such as the KYOTO)
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The GMS Cross-Border Transport
Agreement (CBTA) (cont.)

Covers in one document all the relevant aspects of
cross-border transport facilitation, which includes:
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Facilitation of cross border movement of goods
Single-stop/single-window inspection
Harmonization/integration of systems
Exchange of traffic rights
Provision for transit traffic
Cross-border movement of persons
Has 20 implementing annexes and protocols that
applies to selected and mutually agreed routes and
points of entry and exit in the six countries.
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Objectives of CBTA
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Facilitation of border crossing formalities (single
window and single stop customs inspection,
coordinating of hours of operation; and
exchange of advance information and clearance)
Facilitate cross-border movement of people
(multi-entry visa, recognition of driver license)
Facilitate cross-border movement of goods
(regional transit regime, phyto-sanitary and
veterinary inspection)
Exchange of traffic rights
Requirements for admittance of road vehicles
Institutional Arrangements
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PLAN: BY 2010
FULL IMPLEMENTATION
Geographic Coverage
of CBTA
Mukdahan – Savannakhet
Lao-Bao – Dansavanh
Aranyaprathet – Poipet
Bavet – Moc Bai
Hekou – Lao Cai
Myawaddy – Mae Sot
Mae Sai – Tachilek
Chongmek – Wang Tao
Houayxay – Chiang Khong
Nam Phao – Cau Treo
Nongkhai – Thanaleng
Mohan – Boten
Hat Lek – Cham Yeam
Veune Kham – Dong Kralor
Ruili – Muse
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Status of CBTA Implementation
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All GMS countries signed 20 Annexes and
Protocols of CBTA.
PRC, Cambodia, Lao PDR and Vietnam signed
and ratified all 20 Annexes and Protocols of
CBTA.
Thailand Ratified 11 Annexes and protocols,
while Myanmar will ratify all of the Annexes and
Protocols when it is ready to implement CBTA.
CBTA implementation very slow:- GMS Leaders
in 2008 asked to expedite CBTA implementation
to facilitate cross-border trade, investment and
tourism in the GMS.
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Status of CBTA Implementation
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Single-Window Inspection(SWI) being implemented
at Savannakhet (Lao PDR) and Mukdahan
(Thailand) border checkpoints, and at Hekou (PRC)Laokai (Vietnam) border checkpoints.
Single-Stop Inspection (SSI) being implemented at
Dansavanh (Lao PDR) and Lao Bao (Vietnam)
border checkpoints.
Tripartite Exchange of traffic rights along the EastWest Economic Corridor to commence on 11 June
2009.
GMS Customs Transit System (CTS) and GMS
temporary transport permit in place along the EastWest Corridor but not widely used by operators,
especially in Thailand due high cost/high guarantee
deposit required by Board of Trade of Thailand
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Key Implementation Issues of CBTA
Ratification of the annexes and protocols
Capacity building at national and border levels
 Establishment of required border infrastructure
 Development of ICT/MIS for efficient border management
 Passage of new legislation to establish various transport
facilitation regimes
 Continue to strengthen goodwill and trust among GMS
countries
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Assessment of GMS Economic Corridors - NSEC
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Recent expansion of Southern China industrial production
supply chains has increased the traffic on the corridors
 Especially between the Pearl River Delta – Nanning - Ping Xiang –
Lang son – Hanoi and further down to Hochiminh and Bangkok.
Assessment of GMS Economic Corridors - NSEC
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Traffics on the routes between Kumning-Mohan-BotenHueisai-Chian Khong and Kunming-Hekou-Lao Cai Hanoi have increased but with a slower path.
 Road infrastructure in the Lao part that have narrow turns and peak
slopes that are not favorable for the transport of 40 foots containers.
 Mekong River crossing is opening only five days a week and during few
hours. Using the ferry Chinese operators have to on load and upload
twice losing one day each time.
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In all border crossing point CTS systems are not up to
date yet despite e-documentation being applied in
certain Chinese and Vietnam border point.
Operators are mostly concerned about the coordination
of CTS working hours between China and Vietnam/Laos
as there is time difference, and about the timeliness of
CTS working hours that in practice is less than 5 hours a
day.
Assessment of GMS Economic Corridors-EWEC
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The EWEC has weak link to market, industrial and
population demand areas. In fact EWEC is going from
nowhere to nowhere.
Assessment of GMS Economic Corridors-EWEC
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Under the CBTA, EWEC is a specific route which
forbids going outside the corridor.
Transport registration and insurance/guarantee fees
further impacted on cost of transportation along the
corridor.
The CTS single window inspection at DansavanhLaobao and the inspection at the Mekong
Friendship Bridge have improved the transportation
time between Danang to Mukdaharn.
Nevertheless, the traffic along the EWEC is still low
and could be increased if the corridors has
extended link to industrial zones and markets.
Assessment
of GMS
Economic
Corridors-SEC
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The SEC has potential links between Thailand and
seaports in Cambodia and South Vietnam.
Assessment of GMS Economic Corridors-SEC
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In Cambodia, road infrastructures are poor and
the CTS system is not developed.
 It is since recently possible to do a transit in bond all
the way across Cambodia, from Poipet to Bavet,
although a special and rather expensive license is
required and truck manifest declaration for purpose of
bonding forward to ISD is not permitted.
 There are requirements to have original copies of
documents for transit at all in country checkpoints and
for bonded transfer to ICD.
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Despite those constraints, the traffic between
Thailand to Phnom Penh and Sihanouk Ville
through the Aranyanprathet – Poipet border
check point is increasing.
Assessment of GMS Economic Corridors
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Very little public information is
provided on GMS CTS system.
Local operators do not know
about the CBTA protocols and
other CTS regulations.
Local operators lack expertise and
technical skills and corporate
management for operating in the
economic corridors.
Local operators need to upgrade
themselves to standard
requirements to be able to
operate in the economic corridors.
Characteristic Problems of SME in the GMS–
relative to their size
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SME can play a key role in triggering and sustaining
economic growth and equitable development in developing
countries
SMEs are often unable to capture market opportunities
which require:
 Large production quantities
 Homogeneous standards; and
 Regular supply.
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SMEs experience difficulties in achieving economies of
scale in the purchase of inputs such as:
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Equipments
Raw materials
Access to Finance
Consulting services, etc
Characteristic Problems of SME in the GMS –
relative to their size
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Small size also constitute a significant hindrance to the
internal management functions, which are the core of the
enterprise dynamism such as:
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Training
Market intelligence
Logistics; and
Technology Innovation.
Small scale prevent the achievement of specialized and
effective internal division of labor, which fosters cumulative
improvements in productive capacity and innovation.
Because of the continuous fierce struggle to preserve their
small profit margin,
 SME are often locked in routines and are unable to innovate their
products; and
 process beyond the boundaries of their enterprises to capture
new market opportunities.
The Enabling Business Environment
Impact on SME Business - Factors
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Enterprise registration
Legal and Regulatory Framework
Accounting and Finance
Tax Systems
Availability of Credit for SME
Labor Laws and regulation
Non Tariff Barriers and Measures
Monopolies and cartels
Macro-economic stability (inflation, commodity
price increase, etc.)
SME Business Networking in the GMS
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GMS SMEs can address the problems related to
their size and improve competitive position though
Business Networking.
Business Networking refers to a group of SMEs that
cooperate on a joint development project by
complementing each other and specializing in order
to overcome common problems, achieve collective
efficiency and conquer new markets beyond their
individual reach.
There are “Clusters” that indicates a sector and
geographical concentration of enterprises i.e.
specialized suppliers of raw materials; or a pool of
specialized skills.
Vertical and horizontal cooperation is made along a
Value Chain or a Supply Chain.
SME Business Networking in the GMS

Networking is made through HORIZONTAL COOPERATION
between SMEs occupying the same position in the value chain.
 SME can collectively achieve optimal scale in the use of machinery and
 SME can pool together their production capacities to satisfy large-scale
order.
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Business Networking can also be made through VERTICAL
COOPERATION with other SMEs as well as Large-scale
enterprises along the transport and logistic supply chain.
 SMEs can specialize on their core business and give way to an external
division of labor.
 Inter-enterprise cooperation gives rise to a collective learning space
(invisible college),
○ where ideas are exchanged and developed , and
○ knowledge shared in a collective attempt to improve product quality and occupy
more profitable market segments.
Clustering and Networking of GMS Transport and
Logistics Operators
• Clustering of SME’s transport and
logistic operators in the GMS is
promoted for operating in the
GMS corridors.
• There are 4 clusters
 Northern Cluster 1 (YunnanMyanmar-Thailand-Laos)
 Northern Cluster 2 (Yunnan,
Quangxi, Vietnam)
 East West Cluster (Vietnam,
Laos, Thailand)
 South Cluster (Vietnam,
Cambodia, Laos, Thailand)
Clustering and Networking of GMS Transport
and Logistics Operators
 B2B
Network transport and logistics operators is
established in each clusters though horizontal or
vertical cooperation
 Set a “Charter of Standards” covering safety,
community responsibility, driving hours,
environment, etc.
 Training of operators (SME managers) and drivers
on the charter standards and CBTA
 SME Banks Credit to Network Members for
improving standards and increasing fleets
 Support from Government and Development
Partners provided on capacity building development
to B2B Network