Session 3: Trade Facilitation in Regional Programs: Lessons from CAREC and GMS Initiatives

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1 Session 3: Trade Facilitation in Regional Programs: Lessons from CAREC and GMS Initiatives Ying Qian, Principal Economist, East Asia Department, ADB Asia-Pacific Trade Facilitation Forum 2009, Nov 09

2 Presentation Outline Greater Mekong Sub-regional Cooperation GMS Trade Facilitation Initiatives GMS Transport and Economic Corridors GMS Overall and Trade Facilitation Related Institutions Central Asia Regional Economic Cooperation CAREC Sub-regional Trade Facilitation Initiatives CAREC Transport and Trade Facilitation Corridors CAREC Overall and Trade Facilitation Related Institutions Lessons from CAREC and GMS Trade Facilitation programs

3 Greater Mekong Sub-regional Cooperation Started in Cs Connectivity Competitiveness Community GMS sectors & themes Infrastructure Agriculture & environment Trade facilitation and investment HRD and tourism In 2008 GMS GDP (excluding MYA, PRC) was $366 billion and merchandise trade was 140% of GDP

4 Greater Mekong Sub-regional Trade Facilitation Initiatives Trade Facilitation Working Group started in 1999 Agreement for Facilitation of Cross-Border Transport of People and Goods (CBTA) in 2003 to support Transport and Economic Corridors Strategic Framework for Action on Trade Facilitation and Investment in the GMS (SFA-TFI) endorsed in 2005 Broader range of trade facilitation issues Single Stop Customs Inspection developing of cross border trade and information database Development of SFA-TFI customs and borders formalities exchange of commercial traffic rights transit regimes infrastructure standards, and vehicle requirements for cross-border traffic Customs Procedures Inspection and Quarantine Measures (in particular development of GMS Sanitary and Phytosanitary Action Plan) Trade Logistics Mobility of Business People

5 GMS Transport and Economic Corridors Cross-border transport operations and efficient border formalities (by 2011) Broader trade facilitation (behind-the-border) and developed cross-border logistics services (by 2014) Improved economic infrastructure and enhanced capacities of corridor towns for publicprivate partnerships (by 2016) Increased private investment, welldeveloped production chains (by 2018)

6 GMS Overall and Trade Facilitation Related Institutions Summit Ministerial Meeting Other sectors Senior Officials Meeting CBTA Joint Committee (Heads of NTFCs) Heads of Customs Meeting National Transport Facilitation Committee (NTFC) Reporting to Represented in

7 Started in in Gs Good Neighbors, Good Partners, and Good Prospects CAREC sectors Transport Trade Facilitation Trade Policy Energy In 2008, CAREC GDP (excluding AFG and PRC) was $221 billion and merchandise trade (excluding AFG) was 60% of GDP Central Asia Regional Economic Cooperation

8 CAREC Sub-regional Trade Facilitation Initiatives Customs Cooperation Committee (CCC) established in 2002 Integrated Trade Facilitation program added in 2007 to Support joint Transport and Trade Facilitation Strategy Simplified and harmonized procedures Risk management and post-entry audit Regional Transit Development Joint Customs Control ICT for customs modernization and data exchange National Joint Transport and Trade Facilitation Committees (NJCs) and the Regional Joint Transport and Trade Facilitation Committee (RJC) Single Window Development Trade Logistics Development CAREC Federation of Carrier and Forwarder Associations (CFCFA) Joint transport and trade facilitation Training Assessments and capacity building programs

9 CAREC Transport and Trade Facilitation Corridors Establish competitive corridors across the region Facilitate efficient movement of people and goods Develop sustainable, safe, userfriendly transport and trade networks

10 CAREC Overall and Trade Facilitation Related Institutions Ministerial Conference Senior Officials Meeting Energy Coordination Committee Trade Policy Coordination Committee Regional Joint Transport and Trade Facilitation Committee (RJC) Customs Cooperation Committee Transport Coordination Committee National Joint Transport and Trade Facilitation Committees (NJCs) CAREC Federation of Carrier and Forwarder Associations (CFCFA) Reporting to Represented in

11 Lessons from CAREC and GMS Trade Facilitation programs Trade facilitation attract most interests in sub-regional cooperation programs Stakeholders own interests International best practices Regional public goods Peer pressure Border crossing point (BCP) is the major bottleneck More then three quarters of waiting time and two thirds of costs occur at the BCPs Modernizing BCPs and streamlining procedures at BCPs will have the most efficiency gains Beyond border measures are also important

12 Lessons from CAREC and GMS Trade Facilitation programs Trade facilitation attract most interests in sub-regional cooperation programs Stakeholders own interests International best practices Regional public goods Peer pressure Border crossing point (BCP) is the major bottleneck More then three quarters of waiting time and two thirds of costs occur at the BCPs While modernizing BCPs and streamlining procedures at BCPs will have the most efficiency gains, there are limits on what can be achieved at BCP and how they are addressed need to look at coordinated border management in the broader sense Beyond border measures are also important

13 Lessons from CAREC and GMS Trade Facilitation programs Cont. Transport and Economic Corridors Development of corridors become Raison d'être for institutional building and prioritization of work programs Transport facilitation and trade facilitation issues need be addressed together to maximize synergies CBTA formally codifies transport facilitation and trade facilitation arrangements Non-CBTA works are also important Top-down and bottom-up approaches will end up at the same place formal arrangements such as customs unions, cross-border transport agreements, and regional transit schemes need a flexible set of trade facilitation measures to implement; informal arrangements that are project focused, tangible, and pragmatic, need to be formally institutionalized

14 Lessons from CAREC and GMS Trade Facilitation programs Cont. Effective institutions and institutional structure are necessary conditions for success Need to bring in all stakeholders, particularly the private sector Need to be mindful of specific interests, incentives, territories, and capabilities of different groups Need to be patient and yet engaging Effective donor coordination Result oriented Results measurements are important to decide reliability and replicability of specific trade facilitation initiatives Cumulative results measures from the trade facilitation programs tend to be used to solicit more political support for sub-regional cooperation programs

15 Lessons from CAREC and GMS Trade Facilitation programs Cont. Key successful factors Ownership of stakeholders Over the implementation of strategies and action plans at the regional level, and over the formulation of national master plans Coordination Among various functional agencies at the national level, among regional groupings of trade facilitation, transport, trade policy, customs, and other regional cooperation mechanisms, and donors and development partners Implementation Of concrete and deliverable projects to build trust among stakeholders involved and deliver results to win confidence of policy makers

16 Thank you Ying Qian Principal Economist Financial Sector, Public Management and Regional Cooperation Division East Asia Department Tel: Fax: yqian@adb.org