Trade Facilitation in Eastern South Asia: Towards Paperless Trade

Transcription

1 Trade Facilitation in Eastern South Asia: Towards Paperless Trade Prabir De RIS, New Delhi 5 December 2013 Bali, Indonesia

2 South Asia yet to witness regional Period trade facilitation Regional trade* (US$ billion, %) ; 3.11 (2.00) Trade liberalization Nil Trade facilitation Nil ; 4.15 (4.00) SAPTA Nil ; 5.96 (8.00) SAFTA Nil ; 5.80 (20.00) SAFTA + SATIS Nil *In terms of exports #Data in parentheses are approximate informal trade volume

3 Import Processes ADB-ESCAP BPA Study 2013: Products analyzed Bhutan Bangladesh Nepal Third country Export Processes Bhutan Bangladesh Nepal Fruit juice (0.0, 1.83) Orange Lentil (1.54, 6.57) (1.03, 42.56) LAA (0.06, 1.56) Carpet* (146.36, 60.61) Third Country CSO** (8.72,82.01) *Import processes excluded from analysis. ** Export processes excluded from analysis. LAA and CSO mean lead acid accumulator and crude soya bean oil, respectively. Data in parentheses are trade volumes in US$ million for the years 2000 and 2010), sourced from COMTRADE

4 Study corridors Corridor Countries Linked Distance, Total Distance, Transit Products Traded Corridor 1 (Nepal corridor) Kakarvitta-Panitanki-Fulbari- Banglabandha Corridor 2 (Bhutan corridor) Phuentsholing-Jaigaon-Hasimara- Changrabandha-Burimari Corridor 3 (Nepal corridor) Kathmandu-Birgunj-Raxaul - Kolkata Nepal India - Bangladesh Bhutan India - Bangladesh Nepal - India 1152 km # 54 km Lentil LAA* 630 km^ 115 km Orange Fruit juice 1287 km $ 1047 km Carpet CSO** *Lead acid accumulator **Crude soya bean oil #Kathmandu to Dhaka. ^Thimpu to Dhaka $Kathmandu to Kolkata

5 Business processes, time, cost Corridor Exporter Importer Products Procedures (No.) Time Cost Corridor 1: Kakarvitta- Panitanki-Fulbari- Banglabandha Corridor 2: Phuentsholing- Jaigaon-Hasimara- Changrabandha - Burimari Corridor 3: Kathmandu-Birgunj- Raxaul-Kolkata Exporter Importer Total (Day) Nepal Bangladesh Lentil Bangladesh Nepal LAA (US$/TEU) Bhutan Bangladesh Orange Bangladesh Bhutan Fruit Juice Nepal Third country** *Excluding export processes Third country* Nepal Carpet CSO **Excluding import processes

6 Parties engaged in export and import processes Corridor Exporter Importer Products Parties (No.) Exporter Importer Total Pub Pri Total Pub Pri Total Corridor 1: Kakarvitta- Panitanki-Fulbari- Banglabandha Corridor 2: Phuentsholing- Jaigaon-Hasimara- Changrabandha- Burimari Corridor 3: Kathmandu-Birgunj- Raxaul-Kolkata Nepal Bangladesh Lentil Banglades h Nepal LAA Bhutan Bangladesh Orange Banglades Bhutan Fruit Juice h Nepal Third country** *Excluding export processes **Excluding import processes Third country* Nepal Carpet CSO

7 Parties dealing procedures by country and corridor Parties Involved in Export of LAA from Bangladesh to Nepal Sr. No. Procedures Public / Private 1 Contacting importers Private 2 Fixing terms of trade with importer via Private Local office 3 Sending draft contract and proforma Private invoice 4 Receiving acceptance letter and Private acknowledge L/C copy 5 Obtaining cargo insurance 2 Private 6 Preparing documents for export 3 Private 7 Load in truck and deliver to port Private 8 Deposit chalan fee, VAT and customs declaration Public and Private 9 Customs inspection and clearance by C& Public F agent 10 Out Pass handing over by C&F Agent to Private importer s representative and unloading of the commodity to importer s carrier 11 Receive payment Private Source: Yunus (2013)

8 Documents and copies required Corridor Exporter Importer Products Documents & Copies (No.) Exporter Importer Total Corridor 1: Kakarvitta- Panitanki-Fulbari- Banglabandha Corridor 2: Phuentsholing- Jaigaon-Hasimara- Changrabandha-Burimari Corridor 3: Kathmandu- Birgunj-Raxaul-Kolkata Nepal Bangladesh Lentil 18 (44) Bangladesh Nepal LAA 15 (50) Bhutan Bangladesh Orange 14 (26) Bangladesh Bhutan Fruit Juice 9 (30) Nepal Third country* Carpet 19 (44) 18 (71) 15 (33) 18 (69) 16 (44) Third country** Nepal CSO 22 (49) 36 (115) 30 (83) 32 (95) 25 (74) 19 (44) 22 (49) *Excluding export processes **Excluding import processes Numbers in parentheses are copies needed for export and import.

9 Submission of documents Submission of documents largely handled manually (over 80% of trade documents on avg.) Automation of trade documentation is relatively a new process in SASEC except India.

10 Export time in Corridor 1 Process Product Exporter Importer Procedure Time (Days) Buy (pre-shipment procedure) 1.00 Export Lentil Nepal Bangladesh Export LAA Bangladesh Nepal Export/Import procedures Documents preparation 8.00 Inland transportation 1.00 Time at Customs 1.00 Time at border 1.00 Time at transit 1.00 Pay (post-shipment procedure) 1.00 Buy (pre-shipment procedure) 4.00 Export/Import procedures Documents preparation Inland transportation 1.00 Time at Customs 0.56 Time at border 0.76 Pay (post-shipment procedure) 5.00

11 Export time in Corridor 2 Process Product Exporter Importer Procedure Time (Day) Buy (pre-shipment procedure) 2.00 Export/Import procedures Documents preparation 9.25 Export Orange Bhutan Bangladesh Inland transportation 0.25 Time at Customs 0.25 Time at border 0.25 Time at transit 0.50 Pay (post-shipment procedure) 7.00 Buy (pre-shipment procedure) Export/Import procedures Export Fruit juice Bangladesh Bhutan Documents preparation 9.00 Inland transportation 0.55 Time at Customs 1.13 Time at border 1.20 Pay (post-shipment procedure) *

12 Export and import time in Corridor 3 Process Product Exporter Importer Procedure Time (Days) Buys (pre-shipment procedure) 5.00 Export Carpet Nepal Export/Import procedures Documents preparation 8.00 Third country Inland transportation 2.00 Time at Customs 2.00 Time at border 2.00 Time at transit 9.00 Pay 1.00 Import CSO Third country Nepal Buys (pre-shipment procedure) 4.00 Export/Import procedures Documents preparation Time at transit Time at Customs 1.00 Time at border 1.00 Inland transportation 1.00 Pays (post-shipment procedure) 1.00

13 At present, trade facilitation measures are narrow in South Asia, but showing huge scopes of improvement 1. Modern and effective customs administration and management Accession to and alignment with RKC; SAFE Framework implementation 2. Streamlined and transparent trade processes and procedures ASYCUDA World; National EDIs and Single Windows 3. Improved services and information for traders Trade portals; Trade facilitation committees

14 Trade facilitation agenda - moving from paperbased to paperless trade e-single Window & paperless trade Process simplification and harmonization National data harmonization Document simplification and alignment Cross-border data harmonization & exchange Business Process Analysis BPA to implement paperless trade BPA II to start from January SASEC countries 3 SASEC corridors 1 transit port July 12 June 13 ADB-ESCAP support

15 Recommendations of ADB-ESCAP BPA Study Reduce lengthy Customs and cargo handling time at Port of Kolkata in Corridor 3 through automation and modernization 2. Faster opening of L/C account in bank with the help of ICT 3. Faster cargo insurance with the help of ICT, process reengineering and competition among service providers 4. Use of ICT to obtain permits and certificates 5. Synchronization of cross-border Customs in SASEC should be the priority objective. 6. Remove the regulatory burden on exports and imports 7. Trade will be much faster with minimum process reengineering. 8. Acceptance to subregional transit 9. Development of border infrastructure at Corridors 1 and 2 is must. 10. National single window is essential for paperless trade in SASEC. 11. Implementation of basic trade facilitation measures should be consistently enforced and re-enforced nation-wide. 12. Comprehensive study such as BPA+

16 WTO TFA* Likely Implications on South Asia *Rev 18, October 23, 2013 draft

17 A 7. Release and clearance of goods 1. Pre-arrival processing 2. Electronic payment 3. Separation of release of goods 4. Risk management 5. Post-clearance audit 6. Publication of release time 7. Measures for authorised operators 8. Expedited shipments 9. Perishable goods Not in place In place but improvement needed In place Technical assistance and capacity building needed AFG BHU BAN IND MAL NPL PAK SL

18 A 9. Border Agency Cooperation Clause 2 (i) Alignment of working days and hours Clause 2(ii) Alignment of procedures and formalities Commitment Possible Possible Current status Not fully done, ex. India Bangladesh Partly done Clause 2(iii) Development and sharing of common facilities Possible Don t exist Clause 2(iv) Joint controls Possible Don t exist Clause 2(v) Establishment of one stop border post control Difficult in short run Don t exist

19 A 10. Formalities Connected with Export 1. Formalities and documentation requirements 2. Acceptance of copies 2.3 Acceptance of e-copy and no requirement of original copy by importer 3. Use of international standards 4. Single Window 5. Pre- and Post- shipment inspection 6. Use of Customs brokers 7. Common border procedures and uniform documentation requirements 8. Rejected goods 9. Temporary admission of goods / Inward and Outward processing and Import and Transit AFG BHU BAN IND MAL NPL PAK SL

20 A 11. Freedom of Transit Overland and sea transit critical in South Asia Good initiative, but requirements: Large scale infrastructure investment. Additional financial burden Not clear about charges It does not talk about explicitly electronic processing of transit documentation

21 A 12. Customs Cooperation Workable, but several issues: Verification and acceptance of documentations Dispute settlement etc.

22 A 13. Institutional Arrangements Some South Asian countries already have trade facilitation committee Making it sole authority of TF difficult for large country like India

23 Conclusions Development of hard and soft infrastructure shall go in parallel Trade facilitation varies across procedures, countries, products and corridors No single TF measure may fit the entire subregion Huge scopes of reengineering of processes Simplification of procedures and processes are crucial for facilitation of trade. Huge scopes for improvement in trade facilitation in Eastern South Asia (SASEC). Development organisations like ADB has a strong facilitating role in development of infrastructure. WTO TFA is a workable draft, promising a future, potential to standards, paperless trade etc., but needs drastic changes to safeguard LDCs and developing countries.

24 Thank you