digital trade in the asia-pacific · • a multi-layered institutional arrangement as an operating...

2 May 2016

Digital Trade in the Asia -Pacific

Adam HealTrade, Investment and Innovation Division

United Nations ESCAP

Overview

1. ESCAP’s work on ICT and Trade2. Potential for Digital Trade in the Asia -

Pacific3. Barriers to digital trade4. The evolving trade policy environment

for digital trade

What is ESCAP?

• Regional arm of the United Nations

• Intergovernmental Forum

• Largest of the 5 Regional Commissions

• Covering 60% of world’s population

• 53 Members and 9 Associate Members

Economic and Social Commission for Asia and the Pacific (ESCAP)

Headquarters in Bangkok

ESCAP’s Work

Areas of Work

Macroeconomic Policy

Environment & Development

Social DevelopmentTransport

Trade, Investment and Innovation

Statistics

Information & Communications Technology

Disaster Risk Reduction

Sustainable Development

SocialEconomicEnvironmental

ESCAP’s Work

Work relevant to ICT for development

The Economic and Social Survey of Asia the Pacific is the longest

running report in the United Nations System

First issued in 1947

Asia-Pacific Information Superhighway

ESCAP /ITU initiative provides interactive maps showing APIS

links

Theme Study on Science, Technology and Innovation

(May 2016) will contribute to and informs the dialogue of

ESCAP Member States during the annual Commission session

ESCAP’s Work

Work on Trade Policy

Research and

Publications

Capacity Building

and Technical

Assistance

Intergovernmental

Cooperation and

Regional Knowledge

Networks

ESCAP’s Work

Regional Agreement on Cross -Border Paperless Trade

A new UN treaty, framework agreement. Agreed in April 2016.

The regional arrangement has the following key features:

• A set of key principles to promote connectivity and trade facilitation, including

functional equivalence, promotion of interoperability, improved trade facilitation

and regulatory compliance, and cooperation between public and private sectors

• A multi-layered institutional arrangement as an operating platform: a Council at

ministerial level as a decision-making body; a Standing Committee at senior

official level as an operative body; and Working Groups, at expert level, as

substantive supportive bodies.

• A comprehensive action plan: to address legal and technical issues in cross-

border paperless trade on a consensus basis. This action plan will be developed

by the Standing Committee and Working Groups.

Overview



for digital trade

The promise of digital trade

Digital trade

A. Digitally-delivered

goods and services

C. Digitally-enhanced

physical flows

B. Digitally-enabled

purchases


The promise of digital trade in developing Asia-Pacific economiesRapid spread of internet access

Growing culture of e-Commerce

1bnSmart phones

spreading rapidly and bringing people online

1/3rdAsia-Pacific accounts for one third of global

B2C transactions

High proportion of SMEs

97% SMEs account for the

vast majority of businesses


Retail digital trade in the Asia-Pacific

0

5

10

15

20

25

30

35

40

2014 2015 2016 2017 2018 2019

Per

cent

age

China

South Korea

India

Indonesia

Asia-Pacific

Worldwide

Forecast

Retail Ecommerce Sales as a Percent of Total Retail Sales in Select Countries in Asia-Pacific and Worldwide, 201 4 - 2019

Source: emarketeer, 2016

What is ESCAP?

Success stories: Janet’s

•Janet’s, a crafts exporter in Samoa with a dozen employees. •The company started in 1989 and exported that same year. •The company has had an online presence through its website since 1999, and opened their online store in 2012. •Today, the company also uses an online store and advertises via Facebook, where they get likes especially from Fiji, and where the most likes turned to sales come from Australia and New Zealand. •To reach teens and people in their 20s, Janet’s is also using Instagram and Twitter, and now expanding to Pinterest.

What is ESCAP?

Success stories: Rags II Riches

• A fashion & design house in the Phlippinnes empowering community artisans.

• Partner swith local artisans across the Philippines to create eco-ethical fashion and home accessories out of upcycled, overstock cloth & indigenous fabrics.

• Sells both domestically and overseas

Overview



for digital trade

Barriers to digital trade

ICT access Cross-Border payments

Customs and Logistics

Barriers to Digital Trade

ICT Access

Source: ESCAP Statistical Database, 2016


ICT Access: Trade Policy Responses

Trade in Goods Trade in Services

0 5 10 15

Computers

Laptops

Mobile Phones

Effectively applied tarfif

Myanmar Pakistan Nepal Lao PDR Cambodia

Tariff barriers remain in some countries

0.00 0.10 0.20 0.30 0.40 0.50 0.60

United States

Japan

Australia

Turkey

New Zealand

Korea

China

India

Russia

Indonesia

STRI value (0= completely open, 1= completely

closed)

Telecoms services sectors remain closed

Sources: World Bank; OECD


Customs and Logistics

• Logistics underpinning e-Commerce transactions are different to the logitics for traditional trade

•Logistics is more complicated in a world of B2C and C2C transaction

•Millions of small, individual parcels each with a customized path for delivery

•Warehousing is more demanding – needs to handle order fulfilment, sorting, distribution and parcel returns


Postal reliability


0

10

20

30

40

50

60

70

80

90

100

UPU postal reliability score (2013-14)

Sources: UNCTAD; UPU

De Minimis

“a valuation ceiling for goods, including documents and trade samples, below which no duty or tax is charged and clearance procedures, including data requirements, are minimal”


De Minimis thresholds in the Asia -Pacific

ICC suggested

global baseline

ICC aspirational

threshold

Source: Global Express Association, 2016



International Payments

Access to banking and credit cards

Hurdles in cross-border financial

transactions

<30%In the Philippines, Viet Nam and Indonesia only a minority have access to formal banking

99%Share of transactions

using cash in India

67% shoppers in the Philippines were not comfortable giving

credit card info online

Trust and Security

Innovation in International Payments


Overview



for digital trade

Global Developments

Policies for Digital Trade

• WTO Trade Facilitation Agreement

• Information Technology Agreement 2

• Trade in Services Agreement

Trans -Pacific Partnership


Source: Duane Morris, 2014

e-Commerce in the TPP


Allows Cross-Border Electronic

Data Transfers

No Customs Duties on Electronic

Transmissions

No Forced Localization of

Computing Facilities

Non-Discriminatory Treatment of

Digital Products

Prohibits Conditions on Transfers of Source Code

Access to and Use of the Internet for

Electronic Commerce

e-Residency: access to an enabling environment for entrepreneurs


Providing confidence for

consumers and business

• Digital consumer protection

• Dispute settlement

mechanisms

• Upgrading logistics networks

• Access to international

payments mechanisms

• Tools for online security

Ensuring safe access

and transfer of online

information

• Security and regulatory

oversight to protect privacy

• Minimization of data

localization laws

• Avoiding digital protectionism

by limiting foreign providers

Cooperation to address

regulatory externalities

• Incentivise regulatory

cooperation to idenitfy

spillovers

• Identify and manage the

impacts of digital trade on

domestic regulatory goals

Source: Adapted from Meltzer, 2016

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Thank you

unescap.org

digital trade in the asia-pacific · • a multi-layered institutional arrangement as an operating...

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