APTFF 2015 Capacity Building Workshop on Implementing Trade Facilitation Measures of the WTO TFA: Authorized Economic Operator (AEO) and National Trade Facilitation Committee (NTFC) 22 October 2015, Wuhan, China Trade Facilitation Secretariat: Lao PDR By: Phoutsawanh KHOUNCHANTHA Department of Import and Export Ministry of Industry and Commerce Lao PDR 1
Presentation Outline 1. Background 2. Key functions 3. Coordination mechanism and organizational structure 4. Key achievements 5. Key success factors, obstacles, lessons learned 6. Future work plan and its linkages with WTO TFA 2
Background The Government of Lao PDR (GoL) has formulated trade policies at different levels, but most of them have been implemented separately. At the national level, the GoL endorsed several trade legislations: - Amendment of customs law in line with the regulations and WTO principles. - Notification to reduce government agencies working at the international border checkpoints from 15 to 3. At the regional level, the GoL has a strong desire to integrate the national economy into that of GMS and ASEAN: - Joined the cross border transport agreement of GMS in 1999. - Promised to establish Lao National Single Window by 2015 which will later be integrated into ASEAN Single Window. At the international level, the GoL will join the WTO Trade Facilitation Agreement. 3
Background (cont.) The different levels of trade policies require a good coordination between public and private sectors to facilitate trade trade procedures require permits from many ministries. The main obstacles related to trade facilitation in Laos include: - Lack of coordination among concerned government agencies leading to poor harmonization of laws and regulations relating to trade and customs; - Many document inspection checkpoints and overlapping fees collections; - Time consuming procedures in transit countries Thailand, Vietnam, and China; - Lack of trade and customs information center through electronic system; - Lack of IT system and modern equipment for document declaration, collecting customs duties and tax, and reporting of customs revenue. 4
Background (cont.) To address these obstacles, the TFS, among others, was established in 2010, two years after the establishment of the National Steering Committee for Economic Integration: - Deputy Prime Minister s Decision on Organization and Role of the Trade Facilitation Secretariat, No. 023/NSCEI, dated 20 October 2010. - Prime Minister s Degree on Organization and Role of the National Steering Committee for Economic Integration, No. 118/PM, dated 11 July 2008. The TFS, responsible by the Department of Import and Export (MOIC) serves as a focal point for coordinating policies and following up with implementation progress of trade facilitation in Laos. 5
Key functions - Objectives: foster trade facilitation by simplifying, standardizing or harmonizing trade procedures. - Scope of action: review and advise government on matters of trade facilitation implement measures of WTO trade facilitation agreement collect and disseminate information on trade facilitation coordinate with government authorities, private sectors, and international organizations in the areas of trade facilitation 6
Coordination mechanism and organizational structure The coordination mechanism of TFS is shown in Figure 1. The TFS creates a channel for addressing trade facilitation issues faced by the private sector at the central and local levels. 7
Figure 1: Coordination Mechanism of TFS in Lao PDR National Steering Committee for Economic Integration President: Deputy Prime Minister Governmental Level Trade & Private Sector WG WTO Accession Secretariat Trade Integration Secretariat Trade Facilitation Secretariat Lao Business Forum Ministry of Finance Ministry of Industry and Commerce Ministerial Level Ministry of Agriculture and Forestry Ministry of Public Works and Transport Ministry of Health Lao National Chamber of Commerce and Industry Provincial Level Concerned Government Divisions Provincial Chamber of Commerce and Industry Private Sector Coordination mechanism of TFS Core coordination mechanism of government authorities Non core coordination mechanism of government authorities 8
Organizational Structure of TFS Minister of MOIC (Chair) Vice Chair Department of Import and Export, MOIC Director General Lao Customs Department, MOF Director General Transport Department, MPWT Director General Agriculture Department, MAF Member Department of Livestock and Fishery, MAF Food and Drug Department, MOH Foreign Trade Policy Department, MOIC Investment Promotion Department, MPI Treaties and Law Department, MFA Immigration Department, MPS International Relation Department, BOL Department of Industrial Property, Standardization and Metrology, MST Institute of Posts and Telecommunications, MPT Secretariat, Lao National Chamber of Commerce and Industry MOIC: Ministry of Industry and Commerce MOF: Ministry of Finance MPWT: Ministry of Public Works and Transport MAF: Ministry of Agriculture and Forestry MOH: Ministry of Health MFA: Ministry of Foreign Affairs MPS: Ministry of Public Security BOL: Bank of Lao PDR MST: Ministry of Science and Technology MPT: Ministry of Posts and Telecommunications 9
Key achievements Assessment of needs and priorities for WTO trade facilitation - Central level: November 2013 and July 2015 - Provincial level: Southern provinces (April 2015), Northern provinces (June 2015) Assessment Result for Category A: 13 Assessment Result for Category B: 7 Assessment Result for Category C: 16 1.1 Publication 1.2 Information available through internet 1.3 Enquiry points 1.4 Notification 4 Procedures for appeal or review 5.1 Notifications for enhanced controls or inspections 5.2 Detention 6.2 Specific disciplines on fees and charges for customs processing imposed on or in connection with importation and exportation 7.1 Pre arrival processing 9 Movement of goods intended for import under customs control 10.5 Pre shipment inspection 10.6 Use of customs brokers 10.9 Temporary admission of goods and inward and outward processing 2.1 Opportunity to comment and information before entry into force 2.2 Consultations 6.1 General disciplines on fees and charges imposed on or in connection with importation and exportation 6.3 Penalty disciplines 7.2 Electronic payment 7.3 Separation of release from final determination of customs duties, taxes, fees and charges 7.9 Perishable goods 3 Advance rulings 5.3 Test procedures 7.4 Risk management 7.5 Post clearance audit 7.6 Establishment and publication of average release times 7.7 Trade facilitation measures for authorized operators 7.8 Expedited shipments 8 Border agency cooperation 10. Formalities and documentation requirements 1 10. 2 Acceptance of copies 10. 3 Use of international standards 10. 4 Single window 10. Common border procedures and uniform 7 documentation requirements 10. Rejected goods 8 11 Freedom of transit 10 12 Customs cooperation
Key achievements (cont.) Formation of Trade Facilitation Strategy of Lao P.D.R (2011 2015) in July 2011 Legal documents - Prime Minister s Decree on Import and Export of Goods, No. 114/GoL, dated 6 April 2011. - Decision of Minister of Industry and Commerce on Re export, Temporary Export, and Transit of Controlled Goods (forthcoming). - Instruction of Minister of Industry and Commerce on Export of Wooden Furniture at Trade Fair, No. 1027/MOIC, dated 25 May 2015. Lao PDR Trade Portal (July 2012): - LTP serves as a single stop point for all information relating to import and export into and from Laos. - It contains more than 200 legal documents related to trade. - It has 1,190 members as of May 2015. (more information: http://www.laotradeportal.gov.la/) 11
Key achievements (cont.) Table 1: Impacts of trade facilitation on trade cost in Lao PDR Trade Cost 2013 2015 % Change from 2013 to 2015 Export Import Export Import Export Import Documents (number) 10 10 10 10 0 0 Time (days) 25 26 23 26 8.00 0 Cost (deflated US$ 2,397 2,125 1,950 1,910 18.63 10.12 per container) Source: http://www.doingbusiness.org/. Accessed 22 September 2015. 12
Key achievements (cont.) Lao PDR notified Cat A (13 measures) on 15 September 2015 Lao PDR ratified to WTO TFA on 29 September 2015 13
Key success factors, obstacles, lessons learned Key success factors - Involvement of the private sector (i.e., Lao National Chamber of Commerce and Industry, Lao Transport Association, Lao Furniture Association) - Inter agency coordination (public and private sectors) - Integration of trade facilitation strategy into the work plan of trade related ministries - Strong political commitment (i.e., strong legal backing is essential for addressing crosssectoral trade facilitation issues such as shortening the import procedures of medicines) - Financial resources 14
Key success factors, obstacles, lessons learned Main obstacles - Lack of knowledge of trade facilitation matters - Resistance to change by some governmental agencies - Frequent replacement of members and focal points in concerned ministries Main lessons learned - Platforms for fruitful dialogue among public stakeholders and between the public and private sectors. - Efficient instrument to establish and maintain a communication channel between the public and private sectors and to maintain coordination among all public agencies. 15
Future work plan and its linkage with WTO TFA WP #1: Formulating an action plan for Cat. B and C of the WTO TFA. Contribution to WTO TFA: Article 16: Notification of definitive dates for implementation of Cat. B and C. Article 18: Implementation of Cat. B and C. Article 21: Provision of assistance and support for capacity building WP #2: Improving border agency s coordination between Laos and other GMS countries based on the GMS cross border transport agreement. Contribution to WTO TFA: Article 11: Freedom of transit WP #3: Promoting the role of TFS for disseminating trade related information and serving public private dialogues. Contribution to WTO TFA: Article 1: Publication and availability of information Article 2: Opportunity to comment, information before entry into force, and consultations 16
Thank you! 17