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SESSION 1 – TRADE FACILITATION AT THE WTO AND IN OTHER
TRADE AGREEMENTS
Wenguo CaiDirector, International Programs
Conference Board of Canada
Alexandre Larouche-Maltais Senior Trade & Investment Expert
Conference Board of Canada
Jakarta, April 24-25 2018
Outline: Trade Facilitation at the WTO and in Other Trade Agreements
• What is trade facilitation?
• WTO/WCO, and United Nations
• APEC and ASEAN
Defining Trade Facilitation
• Why facilitating trade?
• How can the TFA help?
• TFA structure and categorization of measures
Facilitating Trade at the Multilateral Level
• Indonesia’s bilateral FTAs
• ASEAN trade facilitation commitments
Regional Initiatives
Part 1
Part 2
Part 3
PART 1DEFINING TRADE
FACILITATIONWhat is trade facilitation?
WTO/WCO, and United NationsAPEC and ASEAN
WTO/WCO Definition
“The simplification and harmonization of activities, practices, and formalities
involved in collecting, presenting, communications and processing data required for the movements of goods in
international trade ” (1998)
Covers Goods Only:
•GATT Article V (Freedom of Transit)
•GATT Article VIII (Fees and Charges)
•GATT Article X (Publications –Transparency)
United Nations Definition
“the simplification, standardization and
harmonization of procedures and associated information
flows required to move goods from seller to buyer and to
make payment”
Much broader, covers:
•customs procedures
• information flows
• financial payment
APEC Definition
“the use of technologies and techniques which will help
members to build up expertise, reduce costs and lead to better
movement of goods and services.” (1999)
“Refers to the simplification, harmonization, use of new
technologies, and other measures to address procedural and
administrative impediments to trade.” (2002)
Even broader, covers:
• Goods
• Services
• Transport, etc.
ASEAN Definition
“Plumbing of International Trade”
ASEAN Trade Facilitation: WTO FTA + standards, customs
procedure, transport facilitation, and regional initiatives such as ASEAN single window, ACTS, ATR/NTR, ASSIST and other
trade matters
Broadest definition of trade facilitation
AEC 2025 Trade Facilitation Strategic Action Plan – very
ambitious
PART 2FACILITATING TRADE
AT THE MULTILATERAL LEVEL
Why facilitating trade?
How can the TFA help?
TFA structure and categorization of measures
WHY FACILITATING TRADE?
BECAUSE inefficient border procedures impact on countries' economic attractiveness!
10
Companies need to import and export efficiently and at minimal cost to be
able to integrate successfully in global value chain
Every day saved in the shipment process translate into 0.8% ad-
valorem cost reduction
Doing Business figures are a key decision criteria for MNC investments
abroad
The cost and efficiency of crossing borders impact on enterprises
BECAUSE border inefficiencies translate into direct and indirect costs impacting business competitiveness…
11
Direct
costs
Time and resources invested in managing export administrative activities
Collect, produce, transmit and process required information and documents
Indirect
costs
Increased operational costs
Delays translate into extra transport, insurance or warehouse costs
Increased working capital requirements
Inventories immobilized are carried out by the exporter (except for EXW sales)
Product deterioration
Delays can lead to the degradation of products and render them unfit for sale
Lost business opportunities
Direct: joining a punctual regional trade
Indirect: immobilized stock could have been sold to a local client
1
2
3
4
What about East Asia and the Pacific?
31
42
57
61
94
97
99
112
102
0 20 40 60 80 100 120
Hong Kong
Singapore
Thailand
Malaysia
Vietnam
China
Philippines
Indonesia
Regional Average
GLOBAL RANKING
Global ranking of national
economies (out of 190) in the
East Asia and the Pacific
region for ease of trading
across borders
World Bank Doing Business
2018
BECAUSE regional competitors are performing better than Indonesia
Trading across Borders
3
12
55
57
62
105
114
114
124
0 20 40 60 80 100 120 140
Hong Kong
Singapore
Malaysia
China
Thailand
Vietnam
Philippines
Indonesia
Regional Average
TIME TO EXPORT (HOURS)
What it takes to trade across
borders in economies in East
Asia and the Pacific (EAP)
World Bank Doing Business
2018
Trading across Borders
57
320
339
366
372
391
499
509
568
0 100 200 300 400 500 600
Hong Kong
Thailand
Vietnam
Malaysia
Singapore
Indonesia
Regional Average
Philippines
China
COST TO EXPORT (USD)
What it takes to trade across
borders in economies in East
Asia and the Pacific (EAP)
World Bank Doing Business
2018
HOW CAN THE TFA HELP?
TFA can reduce international transaction costs
Overall potential trade cost
reduction by income group
Source: OECD
•TF measures at the border
have a high potential for cost
reduction
•From 13% to 15% depending
on countries’ income levels
14%
15%
13%
LIC LMIC UMIC
What businesses want to improve their exports competitiveness
What do traders want ? What does the TFA provide ?
Art. 1 – Easily accessible trade related informationArt. 3 – Issuance of advanced rulings
Transparent, accessible an predictable rules and procedures
A single access point for all public services et agencies
Standardized formsArt. 10.3 – International standards to promote uniform documentation and data requirements
Art. 8 – Border agency coordinationArt. 10.2 – Acceptance of copiesArt. 10.4 – Establishment of a “single window”
What do traders want ? What does the TFA provide ?
Art. 10.7 – Common border procedure and documentationArt. 10.1 – Periodic review of formalitiesArt. 7.4 – Risk management
Simple, efficient and uniform formalities
Be part of the policy making process
Just and rewarding systemArt. 4 – Procedures for appeal or reviewArt. 7.7 – Authorized operators
Art. 2 – Opportunity to comment regulations before entry into force and public-private consultationArt. 23 – Set-up of NTFC
What businesses want to improve their exports competitiveness
TFA STRUCTURE AND CATEGORIZATION OF
MEASURES
TFA Structure
PreambleSection I –Substantive Provisions
Section II –Special and Differential Treatment
Section III –Institutional
arrangements and final
provisions
Agreement on Trade Facilitation
TFA Structure
PreambleSection I –Substantive Provisions
Section II –Special and Differential Treatment
Section III –Institutional
arrangements and final
provisions
Agreement on Trade Facilitation
TFA Objectives
Clarify and improve GATT Art. V, VIII and X
Recognize LDCs' particular needs
Recognize the need for cooperation on trade facilitation and customs compliance
TFA Structure
PreambleSection I –Substantive Provisions
Section II –Special and Differential Treatment
Section III –Institutional
arrangements and final
provisions
Agreement on Trade Facilitation
Art. Scope
Art. 1-5 Transparency
Art. 6-10 Fees and Formalities
Art. 11 Transit
Art. 12 Customs Cooperation
TFA Structure
PreambleSection I –Substantive Provisions
Section II –Special and Differential Treatment
Section III –Institutional
arrangements and final
provisions
Agreement on Trade Facilitation
Cat. Implementation
A Implementation upon entry into force
B Transition period
CTransition period + financial and/or
technical assistance
TFA Structure
PreambleSection I –Substantive Provisions
Section II –Special and Differential Treatment
Section III –Institutional
arrangements and final
provisions
Agreement on Trade Facilitation
Institutions
MultilateralArt. 23.1 WTO Trade
Facilitation Committee
NationalArt. 23.2 National Trade Facilitation Committee
PART 3REGIONAL INITIATIVES
Indonesia’s bilateral FTAs
ASEAN trade facilitation commitments
Indonesia’s bilateral FTAs
Preamble
“Believing that such bilateral relationship will be enhanced by forging mutually beneficial economic partnership through, inter alia, cooperation, trade and investment facilitation, and trade liberalization;”
Article 1 – Objectives
The objectives of this Agreement are to: (a) facilitate, promote and liberalize trade in goods and services between the Parties;
Indonesia-Japan EPA(2007)
Indonesia’s bilateral FTAs
Article 56 – Sub-Committee on Customs Procedures
For the purposes of the effective implementation and operation of this Chapter, the functions of the Sub-Committee on Customs Procedures (…) shall be:
identifying areas, relating to this Chapter, to be improved for facilitating trade between the Parties
Indonesia-Japan EPA(2007)
ASEAN TRADE FACILITATION COMMITMENTS
Indonesia’s TF commitments
Bilateral and regional FTAs
Indonesia-Japan EPA (2007)
ASEAN Trade in Goods Agreement (2009)
ASEAN-Japan CEPA (2008)
ASEAN-India CECA (2010)
ASEAN-Australia & NZ FTA (2010)
2009 ATIGA
CHAPTER 5: TRADE FACILITATION
Art. 45 – Work Programme on Trade Facilitation and its Objectives
Art. 46 – Scope of the ASEAN Trade Facilitation Work Programme
Art. 47 – Principles on Trade Facilitation
Art. 48 – Progress Monitoring of Trade Facilitation
Art. 49 – Establishment of the ASEAN Single Window
Art. 50 – Implementation Arrangement
CHAPTER 6: CUSTOMS
Similar to WTO TFA measures
Indonesia’s TF commitments
Bilateral and regional FTAs
Indonesia-Japan EPA (2007)
ASEAN Trade in Goods Agreement (2009)
ASEAN-Japan CEPA (2008)
ASEAN-India CECA (2010)
ASEAN-Australia & NZ FTA (2010)
2016 ASEAN Trade Facilitation Framework (ATFF)
ATFF aims at consolidating (ASEAN & WTO instruments) and it provides a basis upon which Member States can further engage and foster greater trade facilitation regionally.
Scope of ATFF:
a) Customs and transport facilitation
b) Transparency of trade regulation and procedures
c) Standards and conformance; and
d) Private sector engagement and business facilitation.
Indonesia’s TF commitments
Bilateral and regional FTAs
Indonesia-Japan EPA (2007)
ASEAN Trade in Goods Agreement (2009)
ASEAN-Japan CEPA (2008)
ASEAN-India CECA (2010)
ASEAN-Australia & NZ FTA (2010)
2016 ASEAN Trade Facilitation Framework (ATFF)
Objectives:
a) Efficient movement of goods
b) Minimize impact of NTMs, and achieve elimination of NTBs
c) Promote private sector engagement
d) Address development gars amongst members
e) Enhance ASEAN institutional coordination
f) Improve monitoring of TF measures
g) Encourage WTO & WCO instruments implementation
FTAs between ASEAN and third countries
ARTICLE 2 – Measures For Comprehensive Economic Co-operation
The Parties agree to negotiate expeditiously in order to establish an ASEAN-China FTA within 10 years, and to strengthen and enhance economic co-operation through the following:f. establishment of effective trade and investment facilitation measures, including, but not limited to, simplification of customs procedures and development of mutual recognition arrangements;
ASEAN-China Framework Agreement on Comprehensive Economic Co-Operation (2002)
FTAs between ASEAN and third countries
Article 22 – Customs Procedures
Each Party, recognising the significant role of customs authorities and the importance of customs procedures in promoting trade facilitation, shall endeavor to:
(a) simplify its customs procedures; and(b) harmonise its customs procedures, to the extent possible, with relevant international standards and recommended practices such as those made under the auspices of the Customs Co-operation Council. ASEAN-Japan CEPA
(2008)
FTAs between ASEAN and third countries
ARTICLE 14 – Customs Procedures
1. Each Party shall endeavour to apply its customs procedures in a predictable, consistent and transparent manner.
ASEAN-India Comprehensive Economic Cooperation Agreement (2010)
FTAs between ASEAN and third countries
ARTICLE 14 – Customs Procedures
2. Recognising the importance of improving transparency in the area of customs procedures, each Party, at the request of an interested person, shall endeavour to provide, as expeditiously and accurately as possible, information relating to its customs procedures to the interested person concerned. ASEAN-India Comprehensive Economic
Cooperation Agreement (2010)
FTAs between ASEAN and third countries
ARTICLE 14 – Customs Procedures3. Each Party, recognising the significant role of customs authorities and the importance of customs procedures in promoting trade facilitation, shall endeavourto:(a) simplify its customs
procedures; and(b) harmonise its customs
procedures, to the extent possible, with relevant international standards and recommended practices such as those made under the auspices of the World Customs Organization.
ASEAN-India Comprehensive Economic Cooperation Agreement (2010)
FTAs between ASEAN and third countries
Chapter 4. Customs Procedures
Art. 4 Customs Procedures and FacilitationArt. 5 Customs Co-OperationArt. 6 Use of Automated SystemsArt. 7 ValuationArt. 8 Advance RulingsArt. 9 Risk ManagementArt. 10 Confidentiality Art. 11 Enquiry PointsArt. 12 ConsultationsArt. 13 Review and Appeal ASEAN-Australia and New Zealand
Free Trade Agreement (2010)
Many thanks for your attention !
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