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Wednesday, 31 October 2012 00:01 - - {{hitsCtrl.values.hits}}
By Uditha Jayasinghe
Implementing trade facilitation reforms for regional connectivity, effective consultation between public and private sectors and developing systems for information exchange between countries were among the main issues that were discussed at the fourth Asia Pacific Trade Facilitation Forum held yesterday.
ESCAP views
United Nations Economic and Social Commission for Asia and Pacific (ESCAP) Trade and Investment Division Director Ravi Ratnayake 
in his address called for these points to be discussed as member countries are grappling with a changing global economic environment.
He pointed out that there is a growing realisation that the developed economies are unlikely to return to a “growth as usual” or “trade as usual” scenario in the near term. There is also a growing realisation that the Asia- Pacific region should search for new drivers of economic growth in earnest. It is UNESCAP belief that deeper regional connectivity can be a strong driver of growth and poverty reduction.
“The somewhat shocking reality is that Asia Pacific is still better connected to Europe and America than with itself. Our latest research shows that trade costs of the region with North America and European Union are 20% less than those with itself. With cumbersome border procedures for many countries it is easier and cheaper to trade with far away developed countries rather than the one next door,” he said.
Ratnayake added that inadequate transport and logistics is a major issue and one that will require a massive amount of investment over the coming decades in many developing countries. However what countries should focus on is ensuring that whatever hard infrastructure they have is used at maximum efficiency. This can only happen if “soft infrastructure” issues are addressed.
He opined that many forms of institutional barriers, regulatory procedures and bureaucratic red tape is affecting international trade and limit the competitiveness of many developing countries. In fact UNESCAP estimates that hidden cost of red tape amount to as much as US$ 350 billion, which is 15% of the value of goods exported from the Asia Pacific region.
“Implementing trade facilitation reforms for regional connectivity in Asia and the Pacific is not only important but also urgent. On average in the ESCAP region it still takes 30 days to move goods from factory to the ship deck at the port – compared to just 10 days of Organisation for Economic Co-operation and Development (OECD) countries. Many countries in the region have made significant progress in reducing trade transaction costs and time in absolute terms but what really matters is how much progress a country makes 
relative to others. And in relative terms many countries in Asia have not made much progress.”
South Asia in particular needs to improve with ESCAP finding that intra-regional costs are almost 50% higher than those in East Asian countries. In that context it is urgent to shift attention from negotiation on tariffs, which are often already low, to negotiating on simplifying and harmonising intra-regional trade and transit procedures.
Ratnayake also called for the meaningful progress in trade facilitation through effective consultation between the public and private sector. He recalled that the forum in 2010 identified the lack of inter-agency cooperation mechanisms for effective streamlining of trade procedure and the political will needed to implement them. Another important reason for slow progress us that new regulations touted as trade facilitation measures by the governments are often designed without proper consultation with the private sector. This ignores the reality that importers and exporters know best where inefficiencies lie and implementing trade facilitation without them is likely to fail.
“Facilitating trade means looking beyond your borders to develop systems that can facilitate information exchange between all parties involved in the international supply chains. The fact is that many country in the region have developed automated customs or port systems and many are now moving towards implementation of full-fledged national single windows.”
However these systems can often handle electronic documents generated within the national territory only, as the electronic data and documents generated by them are often not recognised across borders. The full benefits from developing these e-trade systems are therefore not yet captured but they need to be to enhance cooperation, he emphasised.
He stressed that ESCAP is ready to help any country move forward on trade integration and praised Sri Lanka for its progress in this sphere.
“I look forward to Sri Lanka’s leadership in developing a full-fledged national single window system as part of its vision to be a global logistics hub. Sri Lanka has the potential to become a world class trade hub but benchmarking the island’s performance against those of leading economies outside south Asia, such as Singapore, is really the way forward.”
Local stake in integration
Industry and Commerce Minister Rishad Bathiudeen in his address acknowledged the importance of integration and noted that Sri Lanka has made significant strides towards achieving greater trade facilitation.
“While recognising that Governments require sufficient policy space to implement the required procedures to monitor trade, I believe that, it is also vital that, such procedures should be harmonised and streamlined as much as possible, in order to achieve meaningful results. While work is ongoing in the WTO itself to implement such harmonisation within the framework of the rules-based multilateral trading itself, it can only be enhanced by countries voluntarily undertaking improvements to address gaps and delays in their system, as well as in implementing, innovating and far-reaching mechanisms to streamline their procedures.”
He added that with the increasing global inter-linkages, developments in technology and transport, and the rapid movement of goods, it can be safe to say that much work still needs to be done to achieve the end goal of a perfectly harmonised, transparent, consistent and expeditious international trade facilitation framework.
“Given the immense nature of this area, I congratulate the organisers on focusing on such key areas as e-trade, public-private partnerships, paperless trade and cross-border recognition in the scheduled deliberations.”
He went on to say that for Sri Lanka itself, trade facilitation is an extremely important issue, given its small size, high dependence on international trade, and its strategic geographical location. “Even though Sri Lanka is a small country, we have been extremely active in developing Sri Lanka as a commercial, logistics, naval and aviation hub of Asia and the world. With the dawn of peace the vision is to capitalise on this natural advantage to make the country an economic centre in Asia and to support the region in their efforts in economic progress. Therefore hosting this annual forum on trade facilitation which provides Asia Pacific countries, a platform, to share their experiences, best practices and also network with each other, is very timely and important for my country.”
He emphasised that Sri Lanka is proud to be the first South Asia country to host the forum, particularly given the vast un-tapped potential to expand trade within this region, and the Asia Pacific region as a whole. He urged the participants to exchange experiences and knowledge, and to identify priority areas, in each of our countries and within the region, that needs to be addressed to facilitate trade and assist members in identifying the necessary tools and ways of doing it.
Partners for growth
Asian Development Bank (ADB) Country Director Rita O Sullivan was upbeat on the regional prospects urging the participants to seek expertise from the organisation for greater trade facilitation.
She noted that ADB funding to promote regional trade cooperation would see a 30% increase by 2020 showing the importance attached by the organisation. She also pointed out that ADB sees intra-regional trade as very important to attract investment and correct trade imbalances within the region.
“Trade facilitation is extremely important to move goods cheaply, quickly and most importantly consistently between countries. ADB works with governments to improve infrastructure, policy and regulatory framework development to this end. Not only does trade facilitation reduce the market gap between countries but ultimately plays an important role in poverty reduction,” she said.
Ceylon Chamber of Commerce (CCC) Chairman Susantha Ratnayake highlighted the importance of the event and thanked the partners of the forum as well as participants.
“In January 2011 when we came to know that UNESCAP was calling for expressions of interest to co-host this event, we at the Ceylon Chamber felt it was important that this event be held in Sri Lanka as the country had emerged from a 30 year conflict and also due to the Government’s vision in making Sri Lanka a leading commercial and logistics hub in Asia, optimising on our geographical location. This event provides us an opportunity to learn from the experiences of other countries, in working towards achieving this vision. Given that it is also a subject that is very important to the South Asian region we would like to thank UNESCAP for selecting us to partner them to co-host this prestigious event.”
The Asia Pacific Trade Facilitation Forum 2012 (APTFF) on the theme “Enhancing public-private collaboration for trade facilitation, paperless trade and cross-border connectivity” will conclude today.
CCC is co-hosting the forum with United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Asian Development Bank (ADB). In addition to the Forum, an exhibition, a number of side events and capacity building programmes on the subject will be held during the week ending on 2 November 2012.
The APTFF has been held since 2009 and it was hosted by Thailand, Malaysia and the Republic of Korea in previous years. The Conference attracts two to three hundreds participants from 30 countries each year. As such, it has become the main annual open regional platform to exchange information, experiences and practices for trade facilitation in Asia Pacific, identify priority areas for regional cooperation and integration, and learn about new tools and services which can increase the efficiency of cross-border transactions.
The Forum also intends to strengthen regional cooperation and coordination of Aid for Trade and related technical assistance and capacity building in trade facilitation. In addition to regular panels and breakout sessions, the APTFF features an Exhibition on Trade Facilitation in parallel, to maximise information sharing on the works, practices, case studies and findings of trade facilitation service providers, researchers, as well as development/donor agencies, international organisations and government agencies.
Pix by Lasantha Kumara
