Single Windows and Arab Regional Integration

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1 Single Windows and Arab Regional Integration Adel Alghaberi Régional Intégration Section Economic Development & Integration Division UN ESCWA SWC2016

2 Introduction The Arab region needs all kinds of at the border and beyond the border trade facilitation measures to increase its competitiveness, boost regional trade and increase its share of international trade.

3 UNCATD Share of the Arab region in Global Trade % Global trade Arab trade

4 Trade growth of the Arab region The change of oil prices is a major driver for change in the region. Major transformation strategies should be adopted to enhance non oil exports. Trade development strategies including trade facilitation are needed now more than ever.

5 Low Intra- Arab trade ASEAN EU MERCSOUR NAFTA ARAB COUNTRIES GCC AMU

6 Additionally: Manufacture exports are only half of their potential (WB). Regional exports face barriers equivalent to 29% customs duties for industrial and 32% for Agriculture products. Trade costs are inappropriately high in the region. Concentration of exports and markets.

7 LPI Arab region with developing countries ,5 3 2,5 2 1,5 Arab Region Developing countries ASEAN 1 0,5 0 Customs Infrastructure Int'l Shipments Logistics quality Tracking & Tracing Timeliness Overall LPI

8 LPI score of the Arab region ,1 3 2,9 2,8 2,7 2,6 2,5 2,4 2,3 2,2 Customs Infrastructures International shipments Logistics competence Tracking & tracing Timeliness

9 Days to import & Export in the Arab region & OECD Algeria Bahrain Egypt Emirates Iraq Jordan Kuwait Lebanon Libya Morocco Oman Palestine Qatar Saudi Arabia Import Export Arab World Import Arab World Export OECD Import OECD Export Sudan Syria Tunisia Yemen Doing Business Report

10 Trucks spend around 47% of the trip time waiting at the borders in the region compared to 17% ECO. ( IRU)

11 Intra- trade cost Shepherd (2011) finds that bilateral trade costs between Arab countries are around twice as high as bilateral trade costs between the EU and Arab countries. Maghreb countries in particular have substantially higher bilateral trade costs among themselves and with the rest of the Arab region than with France, Italy and Spain.

12 Need for trade reform ESCWA ( 2015b) estimates of the cost of non-tariff measures on goods in ad-valorem terms range from 22 per cent in Egypt to 33 per cent in Lebanon, 40 per cent in Morocco and 45 per cent in Tunisia. These non-tariff measures often take the form of excessively lengthy clearance and inspection processes, high and variable number of documentary requirements, and standards-related issues.

13 Benefits of trade facilitation for the region Studies by WB in 2010 estimated that improving the implementation of trade facilitation in the Mashreq region could result in: Cost saving of around $600 million per year on trade transactions. This translates into additional exports of about U$6 billion per year by 2020, equivalent to about 2%of GDP. Increased intra-trade from 17% to 24 % with an increase of trade with Asia and decreased trade with EU (thus more diversification of market and further regional integration). non-oil exports of the Mashreq countries from its current average share of about 21% of GDP to a level closer to 35% of GDP for countries with a comparable per capita income.

14 Who is responsible for the delay? Research shows that Customs are responsible for only 30% of the delay. OGAs, PIAs, transport operators, private sector, etc are responsible for the rest. So to what extend single window can help?

15 To what extent Single Window can enhance regional trade? Streamline of process will lead to reduction of trade cost leading to more exports especially by SMEs. Increase bilateral trade of perishable goods. Enhance intra-trade, flourishing Regional Value Chains and GVCs thus regional integration at large.

16 The measures that contribute the most to lowering trade costs in the region ( OECD) The measures that contribute the most to lowering trade costs in the region are: Automation (with an estimated potential reduction of 2.6% in trade costs), involvement of the trade community (1.8% estimated potential reduction) and streamlining of procedures (1.3% estimated potential reduction).

17 Where are we? ESCWA s assessment of progress made in the Arab region toward single window was done in 2011 Countries that made most progress toward SW are: UAE, KSA and Lebanon. Countries that made Some progress: Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar; Countries that made very little progress : Iraq, Palestine, the Sudan, Syrian Arab Republic, Yemen. ESCWA is planning a new mapping of SW implementation next year.

18 .

19 Regional single window Regional singles windows have emerged in EU, ECOWAS and ASEAN, among others. Sub regional single windows in the AMU, GCC and Agahdir can serve multipurpose in the Arab region and lead to a regional single window. With the Arab Customs Union in mind, RSW can bring solutions to various issues including the revenue collection and distribution, end destination of goods, standards and other issues facing the union.

20 Readiness of the Arab region for single window implementation Technological readiness. Human capital readiness. Legal framework. Coordination among concerned agencies.

21 Efficiency and Transparency of Border Administration Index 6 5 5,4 4, Algeria Bahrain Egypt Emirates Jordan Kuwait Lebanon Libya Morocco Oman Qatar Saudi Arabia Sudan Sudan Syria Score 2010 Score 2014 Average Countries 2014 OECD 2014 Doing Business Report

22 Availability and use of ICT ,5 4 4, Algeria Bahrain Egypt Emirates Jordan Kuwait Lebanon Libya Morocco Oman Qatar Saudi Arabia Syria Tunisia Yemen Score 2010 Score 2014 Average Countries 2014 OECD 2014 Doing Business Report

23 Implementation of paperless trade in the Arab region ( ESCWA) Electronic/automated Customs System 100% Electronic Application for Customs Refunds Internet connection available to Customs and other trade control agencies at border-crossings 50% E-Payment of Customs Duties and Fees Electronic Single Window System 0% Electronic Application and Issuance of Preferential Certificate of Origin Electronic submission of Customs declarations Electronic Submission of Air Cargo Manifests Electronic Application and Issuance of Trade Licenses Regional Average

24 Implementation of paperless trade across borders (ESCWA) Laws and regulations for electronic transactions 100% Banks and insurers retrieving letters of credit electronically without lodging paper-based documents 50% Recognised certification authority 0% Electronic exchange of Sanitary & Phyto-Sanitary Certificate Engagement in trade-related cross-border electronic data exchange Electronic exchange of Certificate of Origin Regional Average

25 Conclusion Implementing SW at national levels is crucial for Arab countries to enhance competitiveness and reduce trade cost. Sub-regional and regional level SW can bring tremendous benefits to the region in terms of increased intra-trade, regional integration and industrialization through RVCs. Some important investments needs to be made in technological and institutional capabilities but return will be high.

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