jan.hoffmann@unctad.org geneva, may 2009 trade facilitation: links to logistics and development

Jan.Hoffmann@UNCTAD.org

Geneva, May 2009

Trade Facilitation: Trade Facilitation: Links to Logistics and DevelopmentLinks to Logistics and Development

10 global trends

Trade facilitation measures

Implications for development

Trade Facilitation – Links to Logistics and Development

10 global trends

Trade facilitation measures

Implications for development

Trade Facilitation – Links to Logistics and Development

Loooong term

1.1.Exports of manufactured goodsExports of manufactured goods• Today 80% of developing

countries’ exports are manufactured goods, up from only 20% two decades ago

2.2.Globalized productionGlobalized production• About 1/3 of global trade is

intra-company trade• Around 30% of trade is

trade in components and unfinished goods

3.3.Increased security concernsIncreased security concerns• Security measures along

the entire supply chain

4.4.New Geography of TradeNew Geography of Trade• Especially the share of South-South

trade has doubled since 1990

5.5. Regional integration Regional integration

• Increased regional and transit trade

6.6.Within Logistics expenditureWithin Logistics expenditure…inventory

holding decreases, and Transport expenditure increases

Data for USA, via DOT

7.7.TechnologiesTechnologies• Containerization, shipping networks• Use of computers and Internet

8.8.Privatizations / concessionsPrivatizations / concessionsPorts, Shipping lines, Railways, Airlines,

Airports

9.9.Tariff reductionsTariff reductions• For most developing countries’

exports, international transport costs are 2 to 3 times higher than Customs tariffs on imports in developed countries. Aver age

Ar gentina

Ur uguay

Par aguay

Br azil

Chile

Bolivia

Per u

Ecuador

Sur iname

Venezuela

Colombia

Tr inidad and Tobago

Bar bados

Gr enada

St Vincent and the Gr enadines

St Lucia

Dominica

Antigua and Bar buda

St Kitts and Nevis

Dominican Republic

Haiti

JamaicaBahamas

Panama

Costa Rica

Nicar aguaHondur as

El Salvador

Belize

Guatemala

Mexico

0%

2%

4%

6%

8%

10%

12%

14%

0% 2% 4% 6% 8% 10% 12% 14%

TARIFF/CUST

International freight

Import Customs duties USA

Source: Miccio/ Perez 2002

10.10.Negotiations on trade facilitation Negotiations on trade facilitation at the World Trade Organizationat the World Trade Organization

1. Manufactured goods 2. Globalized

production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

10 global trends

Trade facilitation measures

Implications for development

Trade Facilitation – Links to Logistics and Development

1. Manufactured goods 2. Globalized

production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

advance ruling

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

authorized traders

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

Risk analysis

3. Security concerns

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

Internet publication

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

5. Regional

integration

“Regional approaches”

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

Separate release from clearance

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

7. Technologies

Automated payments,Electronic documents

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

Customs to accept commercial information, information platforms

1. Manufactured goods 2. Globalized production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

Transport costs and trade facilitation more important than tariffs !

1. Manufactured goods 2. Globalized

production 3. Security concerns 4. Trade geography 5. Regional integration 6. Logistics 7. Technologies 8. Privatizations 9. Tariff reductions10. WTO negotiations

… a response to trends in international trade, transport, logistics and technologies !

10 global trends

Trade facilitation measures

Implications for development

Trade Facilitation – Links to Logistics and Development

““Aid for Trade” Aid for Trade”

Trade and Transport Facilitation is not Trade and Transport Facilitation is not only good for trade but also has other only good for trade but also has other

positive side effectspositive side effects

The introduction of ICTs by Customs may encourage smaller companies to also connect to the internet.

Trade and Transport Facilitation is not Trade and Transport Facilitation is not only good for trade but also has other only good for trade but also has other

positive side effects (cont.)positive side effects (cont.)

Capacity building raises the country’s overall human capital.

Trade and Transport Facilitation is not Trade and Transport Facilitation is not only good for trade but also has other only good for trade but also has other

positive side effects (cont.)positive side effects (cont.)

A framework for bank guarantees for transit trade may also generally improve the financial system.

Trade and Transport Facilitation is not Trade and Transport Facilitation is not only good for trade but also has other only good for trade but also has other

positive side effects (cont.)positive side effects (cont.)

A single window experience for trade may help to introduce single windows elsewhere.

Trade and Transport Facilitation is not Trade and Transport Facilitation is not only good for trade but also has other only good for trade but also has other

positive side effects (cont.)positive side effects (cont.)

Reforms of legal regimes

that facilitate the use of

electronic documents may

also modernize other

business practices.

Trade and Transport Facilitation is not Trade and Transport Facilitation is not only good for trade but also has other only good for trade but also has other

positive side effects (cont.)positive side effects (cont.)

Mechanisms to consult

with stake holders may

be beneficial for other

policy decisions as well.

Trade and Transport Facilitation is not Trade and Transport Facilitation is not only good for trade but also has other only good for trade but also has other

positive side effects (cont.)positive side effects (cont.)

Increased transparency is good for good governance in general.

Trade and Transport Facilitation is not Trade and Transport Facilitation is not only good for trade but also has other only good for trade but also has other

positive side effects (cont.)positive side effects (cont.)

Are poor countries poor because of red tape?

OR

Is red tape the result of a lack of development?

ANSWER: It is both

More income to finance trade facilitation

-> Better trade facilitation-> More Trade-> More income to finance

trade facilitation

The “tipping point”: Start with The “tipping point”: Start with Trade and transport facilitationTrade and transport facilitation

Trade and transport facilitation is good

for trade and for development

Development is good for trade and for trade and transport

facilitation

10 global trends

Trade facilitation measures

Implications for development

Trade Facilitation – Links to Logistics and Development

Questions?

Questions?