The Research Proposal - The Research on Measuring AEO MRA Effect - October, 2012
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1 The Research Proposal - The Research on Measuring AEO MRA Effect - October,
2 Contents 1. Research Outline 2. Research Plan 3. Research Consortium & Timeline 4. Future Plan 2
3 1. Research Outline 1-1. Research Background AEO Program provides Trade facilitation benefits (Prompt customs clearance & Reduction of Customs Control) in Customs Clearance procedure Effective Risk Management Tool for Customs Service Enhance Competitiveness for Exporting companies. Helps to establish MRA (Mutual Recognition Arrangement) MRAs are increasing &19 MRAs are concluded as of July other countries adopted AEO programs No Empirical Research Results on the economical effect of the MRA because there has not been any research on that 3
4 1. Research Outline 1-1. Research Background Countries participating in this research are U.S, Japan, Singapore beside Korea and China Korean Customs and Chinese Customs hope to provide visible trade facilitation benefits to companies through AEO program. To conduct AEO MRA research by Customs Clearance time (TRS) & Surveys 4
5 1. Research Outline 1-2. The Objectives of Research To achieve three main purposes. First, To measure the economic effects Second, To identify the expected visible and non-visible benefits Third, To identify difficulties faced by companies in the trade flow How To Measure Trade Facilitation Effects Using Empirical Methodology 1. Using TRS (Time Release Study) 2. Questionnaire survey 5
6 1. Research Outline 2. TRS(Time Release Study) Related Research Overview of TRS TRS = systematic and standardized measurement to measure the average time spent in each stage related to cargo (freight) export and customs clearance at the border. Consider Unique Points in TRS Measurement in Countries Follow the three steps approach, 1)preparation of the study, 2)data collection and recording of data, 3)analysis and conclusions 6
7 1. Research Outline The Premises of Research "If AEO MRA is concluded between countries, will the customs clearance time of AEO companies be shortened in comparison to Non-AEO companies? The fundamental goal is to assure the prompt Customs Clearance and effective Risk Management, thus it is to find out how promptly it is processed. 7
8 1. Research Outline In order to increase research reliability and accuracy It s more appropriate and measurable to compare research data based in Korea and Compare data between Korea to U.S, Korea to China, Korea to Japan, Korea to Singapore. It s very difficult to compare TRS with several countries. First, Too long time, it took half a year to complete Test Run, Second, Cost increases! Third, Technically, U.S, Japan, Singapore already concluded MRA with Korea, it s not possible to compare before and after MRA However, Korea and China is in MRA negotiation, Thus, it s possible to measure TRS before and after MRA 8
9 1. Research Outline Measurement of 6 Sectors - Sectors(chemical, textile, iron, machinery, electrical and electronic, automobile and auto part) are the most trading sectors between Korea and China We can identify which sector is mostly affected by MRA We can identify which sector faces the difficulty in Customs Clearance Procedure 9
10 1. Research Outline How To Select Participating Companies! Try to select the sectors under the similar condition Considering Points, 1. Export similar products(6 sectors) 2. Have self Customs Clearance Team(Responsible for logistics) 3. Similar Capacity 4. Subsidiary or trading companies in China Why 2 companies in each Sector, 1. Distinguish the Role of AEO & Non-AEO 2. Compare before and after MRA 10
11 1. Research Outline Why Survey is needed! 1. TRS only measure sample companies in Korea and China(Export 24, Import 24, total 48 Companies), thus it has limitation to measure MRA economic effects, therefore, we need more companies in each country to participate in this research through Survey 2. To identify visible and Non-visible benefits, MRA benefits, AEO benefits, AEO or MRA expected effects, actual difficulties faced by companies, gather opinions 3. At least 300 company survey results in International Supply Chain in each country(doesn t matter AEO or Non-AEO companies) If 5 countries participate in this research = 1,500 companies survey data are expected to be collected. 4. Conduct Survey (On-line Website, Write in English >Translate home language -> Distribute and gather survey) 11
12 2. Research Plan Measurement Methodology and Scope we measure the sample companies selected in export and import countries. Customs clearance time from the selected export freight of export country to the point of export + time consumed for import in the partner country then = measure them together. Conceptual Map for Measuring TRS Export Declaration Export Inspection Submit Manifest Declare Departure Shipment (Departure) Export Clearance Time Measurement(A) 12
13 2. Research Plan Conceptual Map for Measuring TRS Submit Manifest Arrival Inspect Goods Warehouse (Transportation) Declare Import & Inspection Release Import Clearance Time Measurement(B) Provide benefits such as inspection exemption to AEO companies but Not to Non-AEO Companies The overall customs clearance time on the export and import supply chain are the sum value of A and B in the conceptual map. 13
14 2. Research Plan Role of Participating Countries The General Administration of China Customs is kindly requested to participate in the TRS (Time Release Study) measurement and survey in respect with performing this research. First, To measure the TRS in export and import transactions among preselected companies in Korea and China. Second, to perform survey on AEO and MRA to companies in the trade supply chain including TRS measurement on 12 targeted companies. Last, it is to analyze the TRS measurement and survey results, and write up a report. Select Target Companies Measure TRS Conduct Survey (On-line Website, Write in English >Translate home language -> Distribute and gather survey) 14
15 2. Research Plan Considering Points of Research Model Researchers should consider trade customs clearance related system, procedure and current situations of participating countries, and cannot help taking into consideration of various research model in order to reduce errors in the research procedure. It is necessary to simplify research model through cooperation among participating countries and derive plausible research methodology in advance. Major considering points 1 Measurement sector In principle, the target group of company sectors in this research include all freights that export and import through all seaports and airports between Korea and China but it will be adjusted to be realistic research. 15
16 2. Research Plan Reduce the number of research participating companies to 5 countries As for 6 sectors in the research model, it is designed that Korea and China select each 12 export companies( 6 AEO companies, 6 Non-AEO companies), 12 import companies(6 AEO companies that import from AEO export companies, 6 Non-AEO companies, 6 AEO companies that import from Non-AEO companies, 6 Non-AEO companies) In newly revised model, Korea and China select and measure each 12 AEO export companies, 12 import companies(aeo company or Non-AEO company) Category Original Research Model Revised Alternative Research Model Number of Export Companies AEO Non-AEO Number of Import Companies AEO Non-AEO
17 2. Research Plan Provide special benefits to export companies after concluding AEO MRA Recognizing risk management method, customs clearance operation and reducing inspection ratio and other etc., thus provide reciprocal maximum benefits in comparison to before concluding MRA In respect to customs clearance system of research participating countries, Provide benefits by operating systems like Free Pass Documentation Check Inspection(X-Ray) Intensive Inspection(Physical) Measurement model and analyze data Export process are classified into before concluding AEO MRA, and after AEO MRA, as 12 export companies(6 AEO, 6 Non-AEO) export to 24 AEO and Non-AEO import companies but review it to be simplified. For example, export process from 12 export companies(aeo) to 12 import companies(aeo or Non-AEO) are classified and measured before concluding AEO MRA and after AEO MRA. 17
18 2. Research Plan Revised Alternative Research Model 18
19 2. Research Plan In this research model, we analyze customs clearance difference by 1 when AEO and Non-AEO export operators trade with Non- AEO import operators, 2 when AEO and Non-AEO export operators trade with AEO import operators, 3 and beside AEO or Non-AEO export operators and analyze the customs clearance difference between AEO import operator and Non-AEO import operator. 19
20 3. Research Consortium and Timeline Research Consortium The KCS conducts the research through collaborations with consortium of customs related research institutions. In this research, KAA(Korea AEO Association), KCTDI (Korea Customs and Trade Development Institute), KCingle-CUPIA will participate, and each institution will conduct the detailed research related to the research. Category Role Researcher KAA (Korea AEO Association) KCTDI (Korea Customs and Trade Development Institute) In charge of Research Consortium Design research model Write General report and report KCS Discuss with WCO and Chian on research plan and result Design survey and research Survey result analysis and write a report Statistical data Ph.D. and researcher Ph.D(Statistics) and researcher KCingle-CUPIA Design TRS measurement model Analyze TRS measurement result and write a report 20 researcher
21 3. Research Consortium and Timeline Research Advisory Group Category Working Group(WG) Reference Group(RG) Role Responsible for the preparation, planning and implementation of the study along with ensuring good cooperation between all parties and agencies involved WG should be given the authority to make all decision that are deemed necessary for the implementation of the study To serve as a channel of engagement with the industry sectors As needed, RG will approach members of the RG -As the entry point for liaison with their respective industry sector -To review and validate survey planning including assumptions and definitions -To source complementary survey information -To review and share survey results, conclusion and recommendation China, Japan, Korea Singapore, U.S.A WCO, Australia, France, H.K, NZ, U.K, PCGS, 21
22 3. Research Consortium & Timeline Phase Major Tasks Completion Date 1. Establish a research plan 2. Design a research model 3. Conduct a TRS & Survey and Analysis 4. Submit the final Report Compose Working Group and Researcher Workshop Search information and Review Write draft paper for TRS Test Run(Korea) Establish a research plan and cooperate with participating countries, WCO Refine revised research model and drafted survey to WCO and participating countries in October Receive feedback on drafted survey from WG & RG in November Present a Progress Report before SAFE WG Survey questionnaire (participating countries) & Interview Measure 1 st. TRS (Korea and China) before Korea and China MRA(March ~ May in 2013) & 2 nd TRS(Korea and China) after Korea and China MRA(July ~ September in 2013) Analyze measurement data & Write up an interim report & Submit(KCS and WCO SAFE WG) Write up the Final Report and Submit to SAFE WG (Oct. 2013) Derive implications, propose revised task and future improved task Present the Research Outcome (WCO) Oct November (Oct. ~ Nov.) April 2013 (March ~ September.) December
23 4. Future Plan Exchanging Subject Companies Information Measuring Elapsed Time for Clearance Conducting Survey Collecting and Analyzing Data Reporting results to SAFE WG 23
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