Transcript Slide 1

Regional Consultation on
Trade Facilitation Needs Assessment in South Asia
Kolkata; 17 June 2006
presentation on
Trade Facilitation Needs Assessment in Bangladesh:
Perspective of the Civil Society
presented by
Syed Saifuddin Hossain
Senior Research Associate, CPD
CENTRE FOR POLICY DIALOGUE (CPD)
B A N G L A D E S H
a civil society think – tank
Outline of the Presentation
I.
Introduction
II.
Trade Facilitation in the WTO
III. Trade Facilitation Needs
Assessment in Bangladesh
IV. Recommendations for Future
Negotiations on Trade Facilitation
V.
Concluding Remarks
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I. Introduction
Trade Facilitation: A Coherent Approach
Trade Facilitation
Simplification
Harmonisation
Standardisation
Elimination of
unnecessary
elements and
duplications in
formalities,
processes and
procedures
Alignment of
national
procedures,
operations and
documents with
international
conventions,
standards and
practices
Developing
internationally
agreed formats
and practices
and procedures,
documents and
information
Source: Hossain (2005)
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I. Introduction…Cont’d
Perceived benefits from Trade Facilitation
For the trading community
- Imports: reduction in overall delivered cost
- Exports: increased competitiveness through reduced
transaction costs
For service providers
- new options for improved door-to-door logistics
For public sector
- increased customs revenue and greater control
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II. Trade Facilitation in the WTO
Existing Legal Texts
GATT 94
 Article V: Freedom of transit
 Article VIII: Fees/formalities connected to
import/export
 Article X: Publication and administration of
trade regulations
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II. Trade Facilitation in the WTO…Cont’d
Major Milestones
 Singapore Ministerial (1996): Inclusion in the WTO
agenda
 Doha Ministerial (2001): Negotiations to take place after
the 5th Ministerial
 Cancun Ministerial (2003): Developing countries once
again out-maneuvered; Trade Facilitation side-lined.
 July Framework (2004): Specific negotiating modalities
adopted
 GC Meeting (July 2005): Commitment continues for
further negotiations
 Hong Kong Ministerial (December 2006): New bottle,
same old wine
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II. Trade Facilitation in the WTO…Cont’d
July Package (August 2004)
Least-developed country Members will only be required to undertake
commitments to the extent consistent with their individual
development, financial and trade needs or their administrative and
institutional capabilities.
Livingstone Declaration (June 2005)
Operationalising the flexibilities agreed in the Modalities for
Negotiations on Trade Facilitation.
Full and faithful implementation of the Modalities for Negotiations on
Trade Facilitation that ensure adequate financial and technical
assistance and capacity building including support for infrastructure
development of LDCs, through coordinated and sustained flow of
funding that also address cost implications of proposed measures
affecting LDCs.
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II. Trade Facilitation in the WTO…Cont’d
July 2005 GC Meeting: Report of the TNC Chair
For Trade Facilitation, S&DT and support for capacity building will
need to be a particular focus in the upcoming negotiations.
Hong Kong Declaration (December 2006)
Agreement on the issue that implementation by LDCs of their
obligations or commitments will require further technical and
financial support directly related to the nature and scope of such
obligations or commitments, and direct the WTO to coordinate its
efforts with donors and relevant agencies to significantly increase
aid for trade-related technical assistance and capacity building.
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III. Trade Facilitation Needs Assessment in Bangladesh
Decomposition of Bangladesh’s External Sector Performance
25
20
15
10
5
0
FY90
FY95
Export
FY00
Import
FY05
Total Trade
Source: CPD Database
FY05 vis-à-vis FY90: Total trade grew by 4 times
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III. Trade Facilitation Needs Assessment in Bangladesh
…Cont’d
The process of trade liberalisation in Bangladesh



First Phase
Second Phase
Third Phase
: FY1982-FY1986
: FY1987-FY1991
: FY1992 onwards
Degree of Openness in Bangladesh
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
FY80
FY85
FY90
FY95
FY00
FY05
Source: CPD Database
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III. Trade Facilitation Needs Assessment in Bangladesh
…Cont’d
Recent achievements in Trade Facilitation
 Introduction
of
PSI:
Physical
inspection
of
consignments reduced from 100% in 1999 to 10% in
2002.
 Reduction in number of signatures: 25 in 1999 to 5 at
present.
 Export clearance time for 95% of consignments has
been reduced from 72 hours in 1999 to 3 hours in 2002.
 Introduction of Direct Trader Input (DTI) facility in
September 2003
 Establishment of Trial Centre has simplified
documentation processing.
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III. Trade Facilitation Needs Assessment in Bangladesh
…Cont’d
Most Problematic Factors in Conducting Trade
Customs valuation
Inspection and release of goods
Tariff classification
Submission of documents for clearance
Obtaining an import license
Payment of fees and penalties
Technical or sanitary requirements
Identification of origin of the goods
0
5
10
15
20
25
Weighted Average
Source: Bhattacharya and Hossain (2006)
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III. Trade Facilitation Needs Assessment in Bangladesh
…Cont’d
Identifying Trade Facilitation Needs and Priorities in Bangladesh
Issues
Relevant WTO Proposals
(TN/TF/…)
Reduction and simplification of documentation requirements
W/17, W/18, W/24, W/30, W/31,
W/36, W/45, W/46, W/62, W/67,
W/70
Elimination of bribery and other corrupt practices of customs personnel
W/8, W/60
Establishment of a single window for one-time submission
W/17, W/ 18, W/30, W/45, W/46,
W/70
Harmonisation and standardisation of documentation requirements
based on international standards
W/17, W/18, W/30, W/36, W/45,
W/46, W/62, W/67, W/70
Independent appeal mechanism for traders
W/6, W/8
Improvement in customs inspection and control procedures
W/39
Computerisation and automation of trade procedures
W/30, W/45
Timely and comprehensive publication and dissemination of trade rules
and regulations
W/6, W/7, W/8, W/13, W/26,
W/30, W/32, W/40, W/45, W/70
Completing clearance of goods before they have arrived physically in
the Customs territory
W/10, W/17, W/18, W/46, W/53,
W/70
Establishment of enquiry points and/or call centres
W/6, W/7, W/10, W/26, W/30,
W/45, W/70
Source: Bhattacharya and Hossain (2006)
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III. Trade Facilitation Needs Assessment in Bangladesh
…Cont’d
Qualitative Assessment of the Cost of Implementing Selected TF Measures
4.5
4
3.5
2.5
2
Years
Cost/Savings
3
1.5
1
0.5
Setup cost
Long-term savings
pp
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Operating cost
T ime for implementation in LDC (in years)
Source: Bhattacharya and Hossain (2006)
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III. Trade Facilitation Needs Assessment in Bangladesh
…Cont’d
Major concerns in view of the on-going negotiations in the WTO
 For most LDCs and developing countries, implementation of trade
facilitation obligations negotiated in the WTO may involve broad
and detailed domestic customs and trade administration reforms.
As a result, LDCs will require substantial technical and financial
assistance from developed countries and international
organisations in order to fulfil their obligations.
 In addition, there is increased concern among LDCs that dispute
settlement procedures could be used against them simply
because they lack the technical and financial capacity to
implement their obligations on trade facilitation.
It is, thus, of crucial importance for Bangladesh and other LDCs that any
negotiation on trade facilitation in the WTO is carried out with due
recognition of the constraints and limitations of the LDCs.
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IV. Recommendations for Future Negotiations on Trade
Facilitation
 Any modality for identification of trade facilitation needs and cost must
be finalised in consultation with the LDC Members.
 With a view to realise full and faithful operationalisation of flexibilities
(S&DT) agreed in the Modalities for Negotiations on Trade Facilitation,
LDC Members will only be required to undertake commitments to the
extent consistent with their individual development, financial and trade
needs or their administrative and institutional capabilities.
 Adequate financial and technical assistance and capacity building
support for infrastructure development are the primary requirements for
the LDCs to meaningfully integrate themselves into the global trade
regime. Besides, sustained flow of funding is a crucial issue. Hence,
members of the apex trade body must come up with needs-based
assistance programme to take the current negotiations to any further
milestone.
 Flexibility, especially in terms of transitional periods, in implementing
specific commitments in a progressive manner must be provided to the
LDCs as part of the commitment of S&DT.
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IV. Recommendations for Future Negotiations on Trade
Facilitation …Cont’d
 Necessary technical assistance for harmonising and standardising
documentation procedures will be an integral part of any agreement on
trade facilitation. Successful implementation of international standards
can significantly decrease and simplify import and export
documentation requirements.
 Detailed quantitative assessment in terms of cost implications in
establishing enquiry points, and risk management and post clearance
audit systems must be carried out prior to embarking upon any
agreement.
 Submissions by the developed Members as regards enforcement of
legal obligations such as “binding advance rulings” is a major concern
for the LDCs. Any agreement on such issues would mean that an act of
non-compliance may expose LDCs like Bangladesh to WTO dispute
settlement system.
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V. Concluding Remarks
 Reactions by developing countries on GATT Articles
have been generally very constructive. However, it
needs to be seen how acceptable the proposals might
eventually turn out to be.
 Unity of the LDC front is a must to gain the most from
the current round of negotiations.
 LDC voice must be raised and demands pressed at
every single forum.
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Thank You
for
Your Attention
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