DIGITAL TRADE ASIA-PACIFIC INFORMATION SUPERHIGHWAY ( AP-IS) FIRST STEERING COMMITTEE MEETING 2017 Duangthip Chomprang 2 November I 2017 Dhaka
SDG 2030 CAVEATS RELATING TO TRADE & DEVELOPMENT Universal Goal (Inclusive of both Developed and Developing) International Trade as part of the SDG Goals for the first time Trade Led Development Focus Sustainable Investment Framework
MOTIVATIONS To take advantage of competitive advantage Balance of Trade Market access To attract Foreign Direct Investments National security Liking into the Global Value Chain Economic Cooperation and Integration
LINKING DIGITAL CONNECTIVITY AND TRADE FOR SDG Trade (Direct, Indirect (Intellectual Exchange) Facilitate Investments Global Value Chain Economic Integration
UNDERSTANDING TRADE MECHANISM AND FUNCTIONALITY Trade Corridors: Trade corridors are a network of transportation infrastructure enabling and linking the streams of products/services and information moving through and within communities in a geographic patterns according to a matrix of culture, trade agreements, statutes, legislations and customs that govern and guide trading relationships, institutions and structure. (Michael Van Pelt 2003) Economic Corridors: Mobility of capital, labour, product/services, information, etc. Niche Corridors
UNCTAD B2C E-COMMERCE INDEX 2016 Credit card penetration( %) Secure Server (per 1Mln) Public postal reliability % Internet Shopper per Internet Pop Penetration (% of Pop) 2015 Ranking 2016 Ranking Brunei na na na na na na na Cambodia 9 3 41 25 91 119 na Indonesia 17 2 47 66 88 93 9% Laos PDR 14 3 38 26 105 115 na Malaysia 68 20 69 84 45 44 15% Myanmar 2 25 21 na 133 na Philippines 40 3 52 48 na 89 7% Singapore 82 35 88 98 26 23 57% Thailand 35 6 58 90 70 69 6% Vietnam 48 2 52 70 90 75 26% Source: UNCTAD B2C e-commerce Index 2016
NATIONAL DIGITAL ECONOMY DEVELOPMENT PLAN Almost 99% of developing countries have a national digital economy development plan since 2016. Lack substance and target Not aligned with the UN s SDG 2030 goals e-commerce is a starting point for most countries
ASEAN INTRA-TRADE TRENDS
DATA IS EATING THE WORLD! World s largest taxi company owns no taxis UBER Most popular media creates no content Facebook Largest accommodation provider owns no real estate AirBnB Largest phone companies does not own any telephone infrastructure Skype, WeChat World s most valuable retailer has no inventory Alibaba Fastest growing banks have no actual money Society One World s largest movie house owns no cinemas NetFlix Largest software vendor, does not write their apps Google Most popular emerging research firm, has no researchers HfS Research Source: HfS Research
A REGION WITH ABUNDANCE OF FREE TRADE AGREEMENTS
ASIA-PACIFIC TRADE AGREEMENTS
GLOBAL VALUE CHAIN (GVC) Fragmented network of production within a specific supply chain (product, services, materials, information, technology) primarily, regional in focus and tends to be trading in intermediate goods For example, the Asia-Pacific region is the world s the largest GVC for ICT product and services. As well as, the largest consumers of ICT products and services.
ICT HUB OF THE WORLD
GVC TRADE IMBALANCE EFFECT -REGIONALISM
MAP OF ITA MEMBERS 29 member countries (original) mostly from Asia- Pacific and the US Generally, ITA members with FTA tariff rates avg. 0.6% vs. Non-ITA members of 3.3%
MAP OF GLOBAL TRADE TARIFF AND TAXATION ON ICT
ICT TAX AND TARIFF BY REGIONS
Paperless Trade? Paperless Trade Conduct of trade activities on the basis of electronic rather than paper documents e.g. electronic Customs declaration, electronic cert. of origin (application of e-commerce to international trade domain) Shipper Exporter Forwarder eco Customs Importer Paperless Trade Systems Legal/regulatory and technical frameworks in which paperless trade transactions take place e.g. electronic Single Window facility, e-port management systems, Framework Act on Electronic Transaction (in RoK) Chamber Inspection Source: ESCAP-ITD 32 Paperless Trade and Trade Facilitation Regional Workshop 2017
Towards Cross-border paperless trade (including to enable cross-border e-commerce) Need to facilitate cross-border trade data exchange in the region and beyond Legal and technical barriers in information exchange (across borders) International Supply Chain Integration / Cross- Border e-commerce Increased implementation of (national) Single Windows and paperless trade systems, but Rise of regional and global production networks Rise of cross-border e-commerce Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 33
PAPERLESS TRADE AND NATIONAL SINGLED WINDOW ASEAN Trade in Good Agreement Article 49: Establishment of the ASEAN Single Window Member States shall undertake necessary measures to establish and operate their respective National Single Windows and the ASEAN Single Window in accordance with the provisions of the Agreement to Establish and Implement the ASEAN Single Window and the Protocol to Establish and Implement the ASEAN Single Window. WTO TFA Article 10.4: Single Window 4.1 Members shall endeavour to establish or maintain a single window, enabling traders to submit documentation and/or data requirements for importation, exportation, or transit of goods through a single entry point to the participating authorities or agencies. After the examination by the participating authorities or agencies of the documentation and/or data, the results shall be notified to the applicants through the single window in a timely manner. [..] 4.4 Members shall, to the extent possible and practicable, use information technology to support the single window. ESCAP s Cross-Border Paperless Trade Facility, 2016 The adoption of Single Window and the WTO TFA in Phase approach to facilitate current and future regional trade agreements
Benefits of Paperless Trade Government Effective & Efficient Deployment of Resources Correct Revenue Yield Improved Trader Compliance Enhanced Security Increased Integrity & Transparency Paperless Trade Traders Cutting Costs through Reducing Delays Faster Clearance & Release Predictable Application and Explanation of Rules Effective & Efficient Deployment of Resources Increased Transparency 35 35
It is expected to provide countries of Asia and the Pacific with a new tool and digital complement for better implementation of the WTO Trade Facilitation Agreement (TFA) and the development of cross-border e- commerce. 37
Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific: Key Provisions Article 1: Objective The objective of the present Framework Agreement is to promote cross-border paperless trade by enabling the exchange and mutual recognition of trade-related data and documents in electronic form and facilitating interoperability among national and subregional single windows and/or other paperless trade systems, for the purpose of making international trade transactions more efficient and transparent while improving regulatory compliance. Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 38
Framework Agreement on the Facilitation of Cross-Border Paperless Trade in Asia and the Pacific A new UN Treaty Open to interested (53) ESCAP member states (voluntary) to become parties Opening for signature set to 1 October 2016 at UN Headquarters, New York Objective To facilitate cross-border paperless trade (data exchange) among willing ESCAP member states by providing a dedicated intergovernmental framework to develop legal and technical solutions Complementary to the WTO Trade Facilitation Agreement as well as (sub)regional efforts 4 year step-by-step development process (ESCAP resolutions 68/3,70/6,72/4) Over 30 countries directly involved in finalizing the treaty text in March 2016 Regional Study Expert Review & Member Consultations Negotiation & Finalization Adoption by the Commission Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 2012 2013 2013-2016 19 May 2016 39
New WCO Report on Cross-Border E-commerce* *http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/facilitation/activities-andprogrammes/ecommerce/wco-study-report-on-e_commerce.pdf?la=en Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 40
New WCO Report on Cross-Border E-commerce* *http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/facilitation/activities-andprogrammes/ecommerce/wco-study-report-on-e_commerce.pdf?la=en Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 41
Paperless trade coverage of RTAs Figure shows number of measures (our of 27) that are featured in each RTA Measures mainly found in TF & Customs chapters, and e- commerce chapters Regional findings: TPP most far reaching Rep.of Korea, USA, and Australia/N-Z leading East Asia is leading subregion, followed by South-East Asia RTAs of South and Central Asia are (far) behind; India as a leader TPP China-Rep.of Korea Rep.of Korea-US Rep.of Korea - Australia Rep.of Korea-Viet Nam Japan-Australia Peru-Rep.of Korea Australia-China Rep.of Korea-Singapore New Zealand-Taiwan,PoC Canada-Rep.of Korea EU-Rep.of Korea Hong Kong-New Zealand Singapore-Taiwan,PoC Japan - Switzerland Peru-China Japan-Mongolia Rep.of Korea-New Zealand Hong Kong- Chile Japan - Thailand Nicaragua - Taiwan,PoC Rep. of Korea- Rep.of Korea-India WTO TFA Japan - Peru Japan - Philippines ASEAN-China Chile-China India - Japan New Zealand-China China-Costa Rica EFTA-Hong Kong Iceland - China Switzerland - China Chile-Japan China-Singapore Japan - Mexico Pakistan - China 1 1 1 1 2 2 2 2 3 3 3 3 4 4 5 6 6 6 6 6 7 7 8 8 9 9 9 9 10 15 15 14 14 13 13 12 12 0 3 6 9 12 15 18 21 24 27 21 Figure 2. Paperless trade coverage in RTAs of East Asian Economies since 2005 42
Frequency of paperless trade measures in RTAs 90 of 138 RTAs (65%) contain at least one paperless trade measure 30 RTAs (22%) have a dedicated Paperless Trading or Paperless Trade Administration provision Wide diversity in the type of paperless trade measures included Single window specifically mentioned in very few agreements Use of international standards in paperless trade measures E-certification and e-signatures Laws for electronic transactions E-exchange of TBT related information E-Customs System/Customs Automation E-submission of trade-related data/docs Electronic record-keeping Acceptance of e-copies E-transmission of financial information E-system for inter-organization communication Mutual recognition of digital certificates and electronic signatures Promote e-exchange of data/documents (Mutual) Determination and recogniton of authentication technologies E-System for Risk Management E-system for COO application/processing Proving regulatory compliance of E-transactions E-exchange of SPS related information E-exchange of COO related information Interoperability of digital certificates used by business Meeting standards for E-signature and E-authentication E-submission of Air Cargo Manifests Single Window System E-payment system E-system for SPS certification E-system of Export/Import Permits E-application for customs refunds E-submission of Sea Cargo Manifests 0% 10% 20% 30% 40% 50% 43
Typology of Paperless trade related provisions & measures Based on the review, compiled a list of 27 paperless trade related provisions and measures Measure/Provision 1 Acceptance of e-copies 2 E-submission/processing of trade-related data/documents 3 E-submission of Sea Cargo Manifests 4 E-submission of Air Cargo Manifests 5 E-system of Export/Import Licenses or Permits 6 E-system of SPS certificates 7 E-system of COO 8 E-record keeping 9 E-payment system 10 E-application for customs refunds 11 E-Customs System/ Customs Automation 12 Automated System for Risk Management and targeting 13 Single Window System 14 E-system for inter-organization communication Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 45
Typology of Paperless trade related provisions & measures 15 Laws for electronic transactions 16 Use of electronic certificates and electronic signatures 17 (Mutual) determination of authentication technologies 18 Proving in court legal compliance of E-authentication 19 Meeting standards for E-signature and E-authentication 20 Mutual recognition of digital certificates and E-signature 21 Interoperability of digital certificates used by business 22 Trade-related electronic data exchange 23 E-exchange of COO related information 24 E-exchange of SPS related information 25 E-exchange of TBT related information 26 E-transmission of financial information 27 Use of international standards for paperless trade Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 46
A closer look: Paperless trade in selected RTAs in Asia-Pacific 8 RTAs selected from 2005 to 2016 Articles on Paperless Trading found to typically feature 3 key elements: Endeavour to (1) make electronic versions of their trade administration documents available publicly, Endeavour to (2) accept trade documents submitted electronically as the legal equivalent of their paper version. [Commitment to (3) exchange views and/or cooperate with each other as well as internationally to enhance the acceptance of electronic documents.] Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 47
A closer look: Paperless trade in selected RTAs in Asia-Pacific Looking at the coverage of the 27 paperless trade measures: All feature acceptance of electronic copies Strong commitments on Customs automation and risk management in recent RTAs Promotion of acceptance and mutual recognition of e- authentication and e-signatures Emerging commitments towards cross-border e-exchange of information (including related to SPS and TBT) Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 48
FACILITATING CROSS-BORDER E-COMMERCE e- e- e- e- e- e- e- Source: ESCAP-ITD Paperless Trade and Trade Facilitation Regional Workshop 2017 49
DIGITAL TRADE SDG 2030 Today s cross-border trade in developing countries are dominated by women. Rwanda 74%, Cambodia 86% or China 55%.
THAILAND S BORDER TRADE *Latency effect from Pre-Feasibility Report 7% of all global cross-border B2C commerce are border trade (UNCTAD Oct 2017, Information Econom
WTO GENEVA MINISTERIAL SESSION 1998 Called for a Moratorium to Not Impose Custom Duties on Electronic Transmissions
Versus Tax holidays DE MINIMIS THRESHOLD Currently no international accepted norm or standard of practice
PROMOTING DIGITAL TRADE Frictionless and Digital Trade led development key dependencies Pillar 1 Connectivity (hardware and software) Pillar 2 Traffic and Network Management (cross-border data exchange) Pillar 3 Broadband for All (socio-economic inclusive development, msme) Pillar 4 e-resiliency (security)
QUESTIONS Moving Towards Hardware to Software (Pillar 1, 2, 3 and 4)