UNECE Integrated Approach to Trade Facilitation Tom Butterly Deputy Chief Global Trade Solutions Branch UNECE Capacity-Building Workshop on the WTO Trade Facilitation Negotiations 12-13 June 2006, Chisinau, Republic of Moldova

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UNECE Integrated Approach to Trade
FacilitationTom Butterly Deputy ChiefGlobal
Trade Solutions BranchUNECE Capacity-Building
Workshop on the WTO Trade Facilitation
Negotiations 12-13 June 2006, Chisinau, Republic
of Moldova
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Agenda

• UNECE Integrated Model of Trade Facilitation
• UN/CEFACT Standards, Recommendations and Tools
• International Trade Single Window
• Capacity Building

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UN Economic Commission for Europe (UNECE)
UN Centre for Trade Facilitation and Electronic
Business (UN/CEFACT)
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UNECE Integrated Model of Trade Facilitation
UNECEs objective in international trade to
facilitate and strengthen the integration of
member States, and especially countries in
transition, into the European and global
economy.UNECE region - two thirds of world
trade
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Trade Facilitation in the UNECE Context
Trade Facilitation is a key tool of UNECE to
achieve this objective This work in trade
facilitation supports the UN Millennium
Development Goal 8 to develop further an open
trading and financial system that is rule-based,
predictable and non-discriminatory.
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Trade Facilitation

• The simplification, standardization and
  harmonization of procedures and associated
  information flows required to move goods from
  seller to buyer and to make payment
• Facilitate - to make easy or easier

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INTERNATIONAL TRADE TRANSACTION PROCESS
SHIP
PAY
BUY
Prepare For Export
Prepare For Import
Export
Transport
Import
INVOLVES

• Commercial
• Procedures
• Establish Contract
• Order Goods
• Advise On Delivery
• Request Payment

• Transport
• Procedures
• Establish Transport Contract
• Collect,Transport and Deliver Goods
• Provide Waybills, Goods Receipts Status reports

• Regulatory
• Procudures
• Obtain Import/Export Licences etc
• Provide Customs Declarations
• Provide Cargo Declaration
• Apply Trade Security Procedures
• Clear Goods for Export/Import

• Financial Procedures
• Provide Credit Rating
• Provide Insurance
• Provide Credit
• Execute Payment
• Issue Statements

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The UN/CEFACT Vision
Total Trade Transaction Integrated supply-chain
Competitiveness trade efficiency
Trade facilitation
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Economic efficiency
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The Work of Trade Facilitation

• It encompasses the systematic rationalization of
  processes, procedures, infrastructures,
  documentation and information exchange for
  international trade.
• Involves Customs, other regulatory agencies,
  transport, ports, customs brokers, freight
  forwarders, finance, insurance, legal issues, etc
• It requires strong dialogue and partnership
  between government and the business community

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Strategic Approach to Realising the Benefits of
Trade Facilitation

• Undertake detailed needs analysis and set
  priorities at both the national and regional
  level
• Total trade transaction approach
• Involve the business community from the outset
• Cultivate the necessary political will

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Strategic Approach to Realising the Benefits of
Trade Facilitation

• Develop national and regional implementation
  strategies, with trade facilitation as a key
  trade and economic development instrument
• Manage the technical assistance and capacity
  building process
• Use existing trade facilitation standards, tools
  and instruments

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Why has Trade Facilitation become more popular

• Economic Benefits - shift in focus from technical
  to trade/economic policy perspective
• Greater demands from business for predictability
  and speed
• Information requirements
• International Supply Chains
• Investment Link
• Trade Facilitation at the WTO

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Economic Benefits

• Estimates vary from 1-15 of total trade
  transaction costs
• Even if only 1, OECD estimates total gains to
  world economy of US40, billion
• APEC estimates gains of US46 billion from trade
  facilitation measures - adopted TF as key policy
  target.

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Economic Benefits

• Benefits higher for developing countries and for
  SMEs
• Greater than the potential value of increased
  tariff reductions under future multilateral trade
  negotiations.
• Inefficient or unnecessary process and controls
  add no value whatsoever

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Recent UNECE Study on TF

• TF plays a crucial role in deriving benefits from
  overall trade liberalisation policy
• Even in non-liberalised economies significant
  benefits cold be gained
• The introduction of trade liberalisation measures
  without parallel trade facilitation initiative
  might fail to realise their full economic
  potential.

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Agenda

• UNECE Integrated Model of Trade Facilitation
• Best Practice - UN/CEFACT Standards,
  Recommendations and Tools
• International Trade Single Window
• Capacity Building

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UN/CEFACT

• UN/CEFACT United Nations Centre for Trade
  Facilitation and Electronic Business
• Open to all UN Member States and Organisations
  Recognised by ECOSOC
• Global Mandate
• Driven by member States Plenary and Forum
• Over 400 international experts meets worldwide
• Vision Simple, Transparent and Effective
  Processes for Global Commerce

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UN/CEFACT Standards and Recommendations

• Over 30 Recommendation, many of which are ISO
  Standards
• Recommendation 1 - UN Layout Key for Trade
  Documents (ISO 6422)
• Recommendation 25 - UN/EDIFACT (ISO 9735)
• Recommendation 33 - Single Window
• UNeDocs - IDS
• UNTDED (ISO 7372) CCTS - WCO Customs data model
• Recommendation 4 on TF Structures

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Trade Document Simplification and Standardisation
The United Nations Layout Key for Trade
Documents
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Economic efficiency
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Codes for Trade Information
Rec 19 Mode of Transport
Rec 16 UN/Locode
Rec 17 Payment Terms
Rec 3 ISO Country Code
Rec 9 Currency Code
Commodity Code
Rec 28 Means of Transport
Rec 21 Package Codes
Rec 20 Units of Measurement
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United Nations Standards for Trade Documents SAD
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UN Trade Facilitator Toolkit

• Practical tools that help trade facilitators to
  align trade documents
• Guidelines for Trade Facilitators
• UNLK Grid in Adobe Acrobat
• Background material (UNLK, UNTDED..)
• Beta version available from our website at
  http//unece.unog.ch/etrade/

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• Standardisation and harmonisation of trade
  documents is a prerequisite for paperless trade

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Office PC
Back-end Server
Provides specialised services Cost Recovery basis
Standard user software, Internet Browser
XML
UNeDocs
Exporter
Digital Document Web Services
PAPER

• Electronic Signature
• Document Validation
• Electronic Post Mark
• Language switching
• National Requirements
• Time Stamping.

UNeDocs Trade Transport Documents
Importer
Internet
EDIFACT
Importers Bank
HTML/PDF
F Forwarder
Security, efficiency, speed, best business
practice, ICT integration
Adds
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Agenda

• UNECE Integrated Model of Trade Facilitation
• UN/CEFACT Standards, Recommendations and Tools
• International Trade Single Window
• Capacity Building

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International Trade Single Window

• UN/CEFACT Recommendation 33 defines a Single
  Window as a facility that allows parties involved
  in trade and transport to lodge standardized
  information and documents with a single entry
  point to fulfil all import, export, and
  transit-related regulatory requirements.
• If information is electronic, then individual
  data elements should only be submitted once.

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Current situation for exchanging trade
information with government

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The Single Window approach

• A simple, one-stop solution offering official
  control with trade
• facilitation.

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UN/CEFACT Single Window Recommendation 33 Calls
on Governments to establish a Single Window with
the following features

• Allow traders to lodge standardized information
  and documents with a single entry point to fulfil
  all import, export, and transit-related
  regulatory requirements
• If information is electronic then it need only be
  submitted once
• Allow for the sharing of information amongst
  government agencies in respect of international
  trade transactions

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Recommendation 33 calls on Governments to
Establish a Single Window with the following
features (continued)

• Provide coordinated controls and inspections of
  the various governmental authorities.
• Allow payment of duties and other charges
• Be a source of trade related government
  information

Recommendation includes a set of Guidelines for
the establishment of a Single Window
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UN/CEFACT Single Window Case Study Repository

• Malaysia
• Senegal
• Singapore
• Sweden
• United States
• Korea.

• Finland
• Germany
• Guatemala
• Hong Kong SAR (China)
• Mauritius
• Japan

Each case is described in a standardized template
More case studies (Ghana, Australia )
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Diversity of SW models adopting to specific
national/regional conditions and requirements

• Financing
• By the State (Finland, Sweden, United States),
• By the private sector (e.g. Guatemala, Germany)
• private-public partnership (e.g. China, Malaysia,
  Mauritius, Senegal, Singapore)
• The use of Single Window
• compulsory (Finland, Guatemala, Mauritius,
  Senegal)
• voluntary (China, Germany, Malaysia, Sweden,
  United States)
• Services
• Free on charge (Finland, Sweden, United States)
• Paid based on various payment schemes (Guatemala,
  Germany, China, Malaysia, Mauritius, Senegal,
  Singapore)

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Benefits and Costs of a Single Window

• Benefits for government and trade
• Faster processes, clearance and release
• Reduced costs of compliance
• Reduced corruption
• Reduction in bureaucratic processes
• Better collection of government revenues
• Improved trader compliance
• risk management techniques for control and
  enforcement purposes
• Predictable application and explanation of rules

• Implementation costs
• From less than one million US dollars (Guatemala)
  to
• Between 1and 4 million dollars (Finland, Senegal,
  Malaysia)
• In the US, the cost was significantly higher but
  the system is quite extensive and covers many
  additional areas.

Benefits outweigh costs
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Key factors for success

• Strong leadership, which can come from the
  private (Guatemala) or the public sector
  (Malaysia, Senegal, United States, Singapore,
  Korea, Australia)
• Cooperation and commitment of all stakeholders,
  private and public (Finland, Mauritius, Malaysia,
  Senegal, United States, Singapore)
• User-friendly system, which do not create
  complications for usual business procedures
  (China, Malaysia, Sweden, Senegal, United States)
• Investments in modern technologies (Guatemala,
  Malaysia)
• Phased, flexible approach (Germany, Mauritius,
  Singapore)

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Next Steps for UNECE

• Develop Recommendation 34 on Data Harmonisation
• Develop Recommendation 35 on Legal Framework for
  Data Exchange
• Establish a Single Window Stakeholder Group
• Develop a Cross Border Reference Data Model
• UNeDocs pilot implementations
• Expand SW Repository on the Web
• Welcome to participate in work

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Agenda

• UNECE Integrated Model of Trade Facilitation
• UN/CEFACT Standards, Recommendations and Tools
• International Trade Single Window
• Capacity Building

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Capacity Building Approach

• Capacity building workshops to help countries
  understand available recommendations and
  standards and see where they can fit their needs
• One Size does not fit all but standards
  essential
• National regional strategies
• Partnership approach
• National Experience

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UN/CEFACT Comprehensive Guide to Trade
Facilitation Implementation

• The Guide will help countries to
• identify trade facilitation needs and priorities
• assess and understand available tools, techniques
  and standards
• assess costs for implementation
• review implementation and funding options
• develop an effective national and/or regional
  trade facilitation implementation strategy.

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The Guide

• Guide
• Training material
• Website
• CD
• 6 Regional Training Workshops
• Target Date for Completion of Guide end 2006

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Relationship between the work of UNECE
(UN/CEFACT) and other international organisations
in Trade Facilitation
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UNECE - UN/CEFACT
UNECE in partnership with other organizations
UNCTAD,WB,UNIDO, etc
   

Technical Assistance (Donors decide what is to be
done) - UNECE does not provide long term TA
Recommendations/ Standards Development and
Maintenance
Capacity Building (Helping governments elaborate
a national TF strategy)

WTO
 
UNECEs role is to create the standards through
participation of UN member States and the
business community in UN/CEFACT Working Groups.
We engage in an active Capacity Building
programme to help countries understand how best
to implement these standards, given their unique
needs, priorities and resources while other
organizations assist in long term technical
assistance (UNCTAD, WB etc). The WTO sets the
rules
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.. now we have to make trade facilitation happen!
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THANK YOU ! tom.butterly_at_unece.org
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Follow-up

• All UN/CEFACT Recommendations, codes, standards
  and publications are available for free on our
  website at
• www.unece.org/cefact/
• www.unece.org/trade
• www.unece.org/etrades/unedocs/
• tom.butterly_at_unece.org