Asia Pacific Model E-Port Network Vision and Background

Transcription

1 2014/SOM3/CTI/SEM1/013 Session 4 Asia Pacific Model E-Port Network Vision and Background Submitted by: Shanghai WTO Affairs Consultation Center Seminar on APEC Model E-Ports Beijing, China 12 August 2014

2 2014 Asia Pacific Model E Port Network, APEC SOM 3 VISION AND BACKGROUND WEIQUN YAO, SHANGHAI WTO AFFAIRS CONSULTATION CENTER, CHINA

3 APEC s achievement on Supply Chain Connectivity and Trade Facilitation APEC: A regional economic community and an interdependent production network APEC was formed in response to the increasing interdependency of economies in the Asia Pacific region, on the basis of common interest, inclusiveness and openness, to promote free trade and economic cooperation amongst its member economies. It has then adopted the Bogor Goal as its primary framework to drive APEC region for achieve free trade and investment with consideration of each economy s different socio economic development levels. APEC s achievement 25 years since its formation, working through the 3 pillars of APEC s works: 1. Trade and Investment Liberalization 2. Business Facilitation 3. Economic and Technical Cooperation APEC has achieved significant progress in promoting economic cooperation, trade facilitation and supply chain connectivity, developed collaborative and open infrastructural platform to form Production Network in Asia Pacific through the study of Global Value Chain. Each member of the APEC community have developed interdependency with other economies, thus creating more impetus for inclusive growth and holistic approach on common goal of the region s economic and social developments. Today, APEC member economies together account for: around 40 percent of world population; 44 percent of global trade and 53 percent of world real GDP. The Asia Pacific Production Network has outperformed the developments of the rest of the world since the formation of APEC, serving as exemplary regional 1

4 cooperation model for the wider cooperation at global scale under the likes of WTO: Average trade barriers in the region stood at 17% at APEC formation in 1989; by 2012 barriers had been reduced to 5.8%. As a result, intra APEC merchandise trade has grown from around $1.7 trillion in 1989 to over $10 trillion now, nearly a six fold increase; now accounting for over 2/3 of APEC s total merchandise trade. Similarly, APEC s total trade in goods & services has increased from roughly $3 trillion in 1989 to $16.8 trillion in 2010, over a fivefold increase. During this period of time, APEC has took concrete measures to support creation of a better business facilitation environment and improve connectivity between each economy: APEC s paperless trade effort in the 1990s: introduced electronic/paperless systems by all member economies, covering the payment of duties, and customs and trade related document processing. Single Window Strategic Plan 2007: established a framework for the development of Single Window systems (SWS), which will allow importers and exporters to submit information to government once, instead of to multiple government agencies, through a single entry point. Supply Chain Connectivity Framework and Action Plan (SCFAP) 2009: to explore practical roadmap for achieving of these goals and to address critical implement challenges, APEC has launched the SCFAP in 2009 to include trade logistics or supply chain performance as a core focus to drive trade facilitation and economic growth, and identified 8 common chokepoints that required to be addressed in order to optimize supply chain performance. This has reflected progression of APEC community going from trade policy focused to recognizing the importance of Supply Chain performances on everyday business, and the importance to take active and pragmatic approach to address challenges to create enabling environment for better business facilitation in the Asia Pacific Production Network through collaboration on Supply Chain. 2

5 Revisiting the fundamental root to the framework of SCFAP The focus on trade logistics was first introduced from the Shanghai 2001 meeting, where APEC leaders pushed for a new round of trade negotiations and support for a program of trade capacity building assistance, leading to the launch of the Doha Development Agenda a few weeks later. The meeting endorsed the Shanghai Accord, emphasizing the implementation of open markets, structural reform, and capacity building to meet the Bogor Goal, which also included: Development and implementation of APEC transparency standards; Reduction of trade transaction costs in the Asia Pacific region; Trade liberation relating to information technology goods and services. The Shanghai Model Port Project A capacity building cooperation between China and US implemented under a Public Private Partnership (PPP) structure, was able to integrate both public and private interests, engaging leading industry players from various sectors within the supply chain, including logistics, trade and manufacturing, to design and plan for an ICT infrastructural platform that would provide one stop shop support for various needs of cross border trade and logistics. This project has later developed into what s known today as the Shanghai E Port, a service oriented holistic Information & Communication Technology (ICT) service infrastructure for trade and logistics, developed and operated under PPP structure, in an effort led by local municipal government with support from central government organs, with functions such as SWS and intermodal transportation support capacity that propels the development of world s largest cargo hub by volume. The implementation of the project served as an example at that time to what can be achieved under an inclusive and holistic approach focus on practical manner of 3

6 trade logistics, which led to a growing awareness in APEC communities for importance of supply chain performance and ICT solution being practical approach to achieve trade liberation and business facilitation goals. As such, the basis was formed for the establishment of APEC SCFAP. APEC Model E Port Project In SOM 1 and SOM 2 this year, APEC has endorsed the proposal from China on developing collaboration of Model E Port as an exploratory solution for addressing chokepoints of SCFAP and realizing the goals and targets of APEC supply chain performance and trade facilitation. This resulted from collaborative efforts that took place in SOM1 and SOM2, where experts from both public and private sectors have explored issues and solutions associated with SCFAP in the context of Global Value Chains (GVCs), and concluded: Recognition: Challenges still remain at large for the 8 SCFAP Chokepoints, Data Harmonization, Lacking of holistic approach on ICT development by single lead agency Opinion: that SWS does not necessarily improve supply chain and custom clearance efficiency due to technical ICT barriers and limited functions, and improvement of the overall supply chain efficiency and security shall be the target Understanding: Improving ICT infrastructure is the most pragmatic first step for realizing Supply Chain Connectivity and Trade Facilitation goals amongst APEC economies, and requires Alignment of multilateral understanding, Needs for joint multilateral ecosystem effort, Improvement of PPP, Integration of environmental issues into the Supply Chain consideration, Transparency for Policy and Supply Chain, Focusing on APEC Supply Chain Connectivity ICT Capacity Building Suggestion: GVCs should be the guiding principle for realizing Supply Chain Connectivity, exploratory platform needed for addressing concerns over data security and privacy on information sharing, and an E Port being one 4

7 stop integrated ICT infrastructural solution shall be explored to pragmatically advance goals and targets of SCFAP and SWS via a holistic and effective PPP approach amongst APEC economies; As such, China has suggested Shanghai E Port as the exemplary model for Model E Port on the basis of the following unique features: 1. Holistic Approach by design: Originated from Shanghai Model Port Project, designed and planned by collaborative efforts from both public and private sector 2. PPP by nature: a. 3 rd party public ICT platform administrated by 18 different stakeholders of central and local governments, and port operators. b. Handled over 10 trillion RMB worth of cargo volume, and over 1 trillion RMB of duty handling, with less than 0.01% of total service fee at around 200 million 3. One Stop Shop: a. Handles all trade and logistics activities: clearance, inter modal transportation, payment, bonded zone activities, supply chain b. Enable data connectivity and exchange between all stakeholders from public and private sector c. Over 40,000 Trucks under real time supervision 4. Experience: ICT Backbone for world s largest cargo hub, handles all electronic duty collection for China, special projects including US China anti terrorism cooperation and end end food safety traceability for World Expo 5. Extending services: As ICT service provider to other major ports in China, serve as the data connection hub for Yangtze delta and inland water ports Background: What s an E Port: 3 rd party public ICT service platform to address all needs of trade and supply chains 5

8 It is a 3 rd party public ICT infrastructure platform for a cargo hub, which can be in forms of municipality or a bigger sub region of an economy, built under partnership of various stakeholders rather than under a single lead agency; By design, E Port shall offer one stop ICT capacity to fulfill the needs of trade and logistics activities in the cargo hub, and supports value added applications for private sectors such as supply chain management; It covers more than just a Single Window System, which is usually established under the leadership by single agency from the central government for custom paperless clearance purpose; Considering different setups of cargo hubs in each economy, the development of an E Port can be also very different, for example: setting up a joint facilitation body of multiple service providers at the cargo hub level that can offer a combination of solutions to fulfill the ICT needs of public and private sector. An mechanism to holistically integrate the 3 pillars of APEC works: trade liberalization, business facilitation and economic and technology cooperation Why is E Port project relevant: Pragmatic and Market Based: Service oriented at operational level for trade logistics, which is different from conventional SWS driven by central government. Most successful SWS practices are at single hub economies like Singapore and Hong Kong, but difficult to replicate in other economies; One Stop Shop: Market needs holistic solution and public data interface with intermodal capacity (Air + Sea + Rail + Road), more than just SWS and the port based ICT service interface; Practical to implement: Addresses data harmonization challenges by enabling data connectivity without displacing existing systems; Trust via transparency: Ensures data privacy and protection, with supervision from government and other public stakeholders; 6

9 Available for everyone: Creates enabling environment for integration of segmented supply chain information through 3 rd party public ICT platform, and reduces entry barriers for private sectors, including SMEs; Cross cutting: Realizes Intra agency or Intra Department data sharing and cooperation; Outreach: Explores how best to use public ICT infrastructure through cloud computing to support ICT applications for private sectors, to expand application capacity, and lower entry barrier. Global Value Chains Why adopt GVCs as the principle: Needs of alignment for holistic approach There are many types of stakeholders from public and private sectors, all are driven by different motives and interests, yet to address cross cutting issue within Asia Pacific Production Network such as ones identified in SCFAP, requiring holistic effort from all stakeholders together on a common ground. APEC has identified GVCs as the catalyst for such alignment. GVCs as concept: Alignment of Global Eco System through Common Interest To form holistic approach requires alignment between all stakeholders of the ecosystem from both public and private sectors, and in an era of globalization, requires inter economy, inter agency and intra agency alignment. A catalyst for align all types and levels of stakeholders to focus on common interest to pursue overall social and economic development and sustainability; mitigates policy risks and alleviate conflicts of interests; enable holistic approach of ecosystem. GVCs approach as a statistical or data analysis methodology: to understand every stakeholder s needs by studying input and output social and economic effects and implications of decisions and activities on policy level, industry level and corporate level 7

10 In general, it breaks down into 3 different economic levels: Macro Meseo Micro, and 9 different generalized sub levels. Although policy decisions are being made at the higher economic level and then infiltrates to lower levels, but actual activities that physically take place always start from actors at lower level, and the collective activities of actors at the lower level will form input/output results at a higher level: Microeconomic level: 1. Individual level: a Person, Vehicle or a Sole Proprietor; 2. Team level: a Group of people, vehicle fleet or a small enterprise 3. Department level: a group of teams, a regional logistic operator or a medium sized enterprise 4. Enterprise level: a large enterprise or Multinational Enterprises (MNE) Meseoeconomic level: 5. Industry level: Industry Value Chains or a supply chains of full product lifecycle Macroeconomic level: 6. Local level: A city, metropolitan or province, state 7. Economy level: Single Economy 8. Regional level: A community of economies, such as APEC and our Asia Pacific Production Network 9. Global level: International Policy, WTO, UN, etc. Economic inputs at every level will not only produce direct economic outputs and externality implications on the same level, but it will also generate effects for other levels as well. GVCs offers a tool to create visibility between the input/output outcomes at different levels, allowing decision makers to understand holistic implications of each decision, which reveals relationship between economics data and externalities such as environmental outputs. With massive real time data stream and integration big data application, an aerial view can be formed, hence enabling stakeholders can see everything that 8

11 are happening at an instance, to empower real time supervision, timely and precise decision, as well as advance warning system to mitigate future risks. Public Private Partnership: Structure and mechanism for realizing cross border holistic approach Why PPP: Realizing Ecosystem holistic approach requires enabling structure. Public Private Partnership is a form of partnership between Public and Private Sector to jointly tackle issues under an agreed structure or mechanism. As a 3 rd party vehicle to offer institutional guarantee for intra agency, interagency, and inter economy coordination and on cross border cooperation to form holistic approach between Public and Private sectors. APEC has always emphasized on private sector participation and identified PPP as a critical catalyst for driving economic developments in APEC. NextGen PPP: Conventional PPPs are focused more on infrastructure development, to engage private sector investment in forms of BOT, BT etc. Other types of PPP initiatives are focused more on offering platform for research, discussion and forming industry alliance, to tackle policy or technical matters, without pragmatic mechanism and market service offering to realize the results. Such as industry associations, UN Millennium Project, etc. However, these forms of PPP cannot support the requirement of today s demand for holistic approach that can really pragmatically address today s challenge. So it needs to be a Next Generation PPP, whose characteristics are: A result oriented multilateral PPP under institutional vehicle as facilitation and implementation agent; Ability to truly align vision and interest between public private stakeholders; 9

12 Develop standard and protocol that can be enforced throughout the entire supply chain; Serve as platform to integrate efforts to form holistic approach and deploy practical implementation; Use market based efforts to drive the initiatives; Realize supply chain information transparency for eco system supervision while preserving stakeholder rights and interests for privacy and security. APMEN: Asia Pacific Model E Port Network Since significant volume of cross board trading activities and logistic activities are taking place at the major cargo hubs of each economy, and to progressively advance supply chain connectivity and trade facilitation through ICT applications, we envisioned to create an exploratory ground for cooperation on innovative approaches at operational and voluntary basis, through establish a network amongst APEC Model E Ports, under the structure of PPP and in the context of GVC. Vision: To turn APEC frameworks into action through pragmatic approach Form active platform for information sharing and collaboration between economies and its lead cargo hubs on ICT services and solutions for Trade Logistics; Advance connectivity between economies, and amongst public and private stakeholders; Enable major cargo hubs as sub region champions to drive development of service oriented public ICT service infrastructure and solutions, to address 10

13 various needs of public and private sector on a one stop shop basis, to boost supply chain efficiency and overall economic performance; Ultimately to realize truly integrated supply chain amongst Asia Pacific Production Network through a one stop shop network of ICT services. Relevance: Major cargo hubs are handling majority of trade volume, forming a network amongst major cargo hubs on use of ICT would significantly improve supply chain connectivity amongst every economy; Local government and stakeholders understand local needs and are naturally motivated to improve services at operational level; ICT and its infrastructure are the most practical step for cooperation and capacity building to advance SCFAP; Government are facing more challenges for anti terrorism, cargo security, fair market practices and food safety measures, while market are demanding for more of simplify custom procedures and improvement of supply chain efficiency; E Port as One Stop Shop ICT platform for cargo hubs can enable connectivity between all supply chain stakeholders, to address both public sector and private sector needs; A Network between Model E Ports can support implementation various custom measures and improve supply chain performance through ICT applications and transparency of supply chain information. Activities: Enhance information sharing on model E Ports Carry out case studies on how economies are using ICT infrastructure in their ports and Single Window programs. Explore pilot programs in specific areas of model E Ports. Conduct targeted capacity building activities. 11

14 Exploration of innovative approaches through APMEN: Examples of identified pilots under APMEN End End Traceability of Products (E2ETOP): Achieve full life time Supply Chain Control, enable traceability on every product from production end to consumption end, and register all relevant trade logistics information. thus to realize supply chain transparency, which can enable improve supply chain performance and trade facilitation, as well as effectively address food safety, cargo security, illicit trade and IPR issues; Data tized Paperless Trade and Logistics: Moving from scanned image based electronic transmission to data content based electronic transmission, to enable better data access and sharing, address challenges of conventional SWS and Paperless Trade, improve information processing efficiency, provide 3 rd party data exchange platform, thus support implementation of trade facilitation measures and realization of E Freight initiatives such as ones from IATA. GVC Studies: Based on Real Time and multi dimensional data streams from E Port, with integration of Big Data applications, to develop GVC studies and tools to enable real time supervision, advance warning and support scientific and timely decision for every level of stakeholders. Green Supply Chain: Conduct Green Freight and Logistics projects utilizing massive real time data generated from vehicles and logistics activities currently under E Port supervision, to explore development of Green Supply Chain standards and exemplary practices through analyze and research from big data application, to improve data visibility and promote scientific understanding of implications of Economic Input/Output on operational efficiency, performance quality and environmental impact. Benefits: 12

15 Improve CT infrastructure and expand services capacity for each economy through information sharing, cooperation and capacity building. Engage local governments of cargo hubs to participate in APEC and to gain knowledge and explore cooperation opportunities through APEC s platform. Develop one stop shop ICT service capacity at operational level through 3 rd party public ICT infrastructural platform to fulfill needs of all public and private sector stakeholders. Catalyze improvement of supply chain efficiency and integration of APEC regional supply chain through realizing data visibility for all stakeholders. Advance SCFAP and Trade Facilitation measures. Extend value added ICT service to enterprise: such as Intermodal Transportation, Supply Chain Management and GVCs analytics on trade logistics. Reduce entry barriers for SMEs from new ICT applications and access critical supply chain data. Structure: APMEN formed by nominated APEC Model E Ports; Overseeing Body: An Overseeing Body will be formed by APEC s Committee of Trade and Investment in charge for overseeing overall coordination, supervision and policy making of APMEN. Operation Center: An Operational Center will be established as an open, inter economy facilitation and service body for implementation, development and operation of APMEN, China offers to setup it in Shanghai; 13

16 The APMEN will meet one or two times per year, which could be held at the margins of CTI meeting. The operational center will be responsible for organizing the meetings and report progress to CTI. A Joint Operation Group will be setup under the Operational Center, composed by representatives of local government authorities and operators of nominated Model E Ports, as well as experts and industry representatives. The operational center is expected to undertake responsibilities and functions for general administration, meeting and communication between stakeholders, and assembling task forces for assignments on research, design and planning, capacity building and technical assistance. Envisioned Targets: Phase 1 (May to November, 2014) Complete Nomination of first batch of Model E Port, establishment of APME N and its operational center. Phase 2 (November, 2014 to October, 2016) Alignment of E Port understanding, Conduct Planning and Feasibility Study for implementation of APMEN, Conduct Pilot Projects, develop second batch of Model E Ports through promotion and capacity building. Phase 3 (November, 2016 to October, 2018) Conduct Case Studies and Reviews for Model E Ports and Pilot Projects, explore to form ICT service network amongst Model E Ports Phase 4 (November, 2018 to October, 2021) Explore extending Model E Port s ICT services and solution to other ports in participating economies of Asia Pacific region by Initiate outreach program to enable participation from Non APEC member economies in the Asia Pacific region by Phase 5 ( November, 2021 to October, 2025) 14

17 Explore extending network service coverage to 80 major cargo hubs in Asia Pacific region by Conclusion: APEC Economies are interdependent and are all members in an integrated production network. Although we are different in economic characteristics, but we have a common goal: achieving inclusive and sustainable economic growth. To improve supply chain efficiency and to advance trade facilitation measure are critical to achieve this goal. We need to be pragmatic and market based on approaches, which means we must understand needs of every stakeholder, so that we can turn APEC initiatives into real market actions. GVCs allows us to align interest amongst different stakeholders, and enable data visibility so we can understand timely and precisely on what are happening and what the needs are. We need to engage active participation from Local Government and Private Sectors, to make them champions to drive implementation of APEC initiatives from market level. Ecosystem problems require every stakeholders to tackle, so we must develop new PPP mechanism to form intra agency, inter agency, inter economic holistic approach between Public and Private Sectors. This is why APMEN can become a catalyst for realizing SCFAP goals and Trade Facilitation measures. By developing one stop public ICT service capacity for major cargo hubs in each economy, it enables the participation of ecosystem through addressing different needs of every stakeholder, and achieve connectivity amongst major cargo hubs under an APEC endorsed framework. There will always be potential conflicts of interest between stakeholders, differences of priorities between public and private sectors, concerns over data security and privacy among other situations and risks we face on daily basis, and we must have trust among every stakeholder and a viable cooperation mechanism in order to overcome these issues and to build up a sustainable 15

18 regional community. However, trust can only be build up by transparency and working together, and viable mechanism needs to be developed with real experience. So we need to start explore with real actions, and APMEN can provide the ground for such ice breaking exploration on an open and voluntary basis. APMEN is an innovative attempt for APEC, and we hope to have everyone s participation, through cooperation on E Ports, to holistically and pragmatically address the critical challenges we all share on trade facilitation and supply chain efficiency. 16