Transcript Slide 1

ADMINISTRATIVE TRADE BARRIERS AND TRADE FACILITATION
Predrag Bjelić, Ph.D
Ivana Popović Petrović, M.Sc.
ADMINISTRATIVE BARRIERS AS OBSTACLES TO INTERNATIONAL TRADE
Golden age – period after 1945
GATT –eight rounds of multilateral trade negotiations – trade regime liberalisation
Non-tariff barriers:
-traditional
-technical
-administrative
Graph1: Evolution of Non-tariff Barriers by Broad Category, in %
Graph1: Evolution of Non-tariff Barriers by Broad Category, in %
Source: UNCTAD ”Globalisation and Development: Fact and Figures” Geneva, 2009, p.53
-Administrative barriers to trade are a special category of non-tariff barriers
- Source: administrative regulations and procedures with
a restrictive effect on international trade
-AB are obstacles to international trade
derived from differences in national legal and administrative regulations
and administrative procedures that exporter had to carry out
in order to put its products on a foreign market
All administrative barriers, by their origin, can be divided into two main groups:
Legal barriers to trade;
Procedural barriers to trade.
We have to distinguish “naturally” occurring non-tariff barriers,
which are caused from differences in national standards
and inefficient customs authorities clearance of goods,
from politically introduced measures that are intended to obstruct
import in country which introduce these measures.
The group of administrative barriers to trade is
consisted of many different measures and procedures, some of them being:
Customs valuation;
Application of Sanitary and Phytosanitary measures;
Rules of origin;
Special customs formalities;
Preshipment inspection;
Procedures of Export licences.
Main indicators – The World Bank
Trading across borders
Number of documents needed to obtain to execute
export or import in the economy;
Number of days need for a procedure of export or import in the economy;
Costs of exporting and importing measured in USD per container.
Table 1: Indicators of Foreign Trade Administrative Procedures in Southeast Europe, 2008.
EXPORT
Economy
Rank
Documents
(numb
er)
Time
(days)
IMPORT
Cost
(USD per
container
)
Documents
(numb
er)
Time
(da
ys)
Cost
(USD per
container)
Albania
77
7
21
770
9
22
775
Bosnia and Herzegovina
55
6
16
1,070
7
16
1,035
Bulgaria
102
5
23
1,626
7
21
1,776
Croatia
97
7
20
1,281
8
16
1,141
Macedonia
64
6
17
1,315
6
15
1,325
Moldova
135
6
32
1,775
7
35
1,895
Montenegro
125
9
18
1,710
7
19
1,910
Romania
40
5
12
1,275
6
13
1,175
Serbia
62
6
12
1,398
6
14
1,559
Source: World Bank, Doing Business 2009 Report, Trading Across Borders Indicators, April 2009.
Table 2: Trading across borders indicators for Serbia
Indicators
Trading across borders
2005 *
2006
2007
2008
rank
-
51
58
62
Documents to export
number
9
6
6
6
Time to export
days
32
11
12
12
Cost to export
USD per container
...
1,240
1,240
1,398
Documents to import
number
15
8
6
6
Time to import
days
44
12
14
14
Cost to import
USD per container
...
1,440
1,440
1,559
Export
Import
(*) Data for 2005 are for Serbia and Montenegro
Source: World Bank data from Doing Business Report for 2006, 2007, 2008 and 2009.
Removing administrative barriers
Individual national economies vs. multilateral and regional initiatives
TRADE FACILITATION – INITIATIVES FOR
THE REMOVAL OF ADMINISTRATIVE TRADE BARRIERS
The World Trade Organization
as a Pillar of Multilateral Regulation of Trade Facilitation
The Trade Facilitation process is based on the three articles
in GATT from 1994.
Article 5 which deals with freedom of transit for goods,
Article 8 concerned with fees and formalities connected to importation
and exportation
Article 10 which requires all trade regulations to be
clearly published and fairly administered.
The Trade Facilitation–to strengthen GATT articles
TF topic of discussion in 1996 at the Singapore Ministerial Conference.
Doha Ministerial Declaration adopted on 14th November 2001,
the Council for Trade in Goods should
review, clarify and improve relevant aspects of
Articles 5, 8 and 10 of the GATT 1994
and identify the Trade Facilitation needs and priorities of all members
in July 2004 - ”July Package“
TF was put on the negotiation agenda of the Doha round
On 12th October 2004 the Trade Negotiations Committee
established the Negotiating Group on Trade Facilitation
The Agenda of the Negotiating Group
consists of:
-Clarification and improvement of relevant aspects of
Articles 5, 8 and 10 of the GATT 1994;
-Special and differential treatment for developing and LDC;
-Identification of Trade Facilitation needs and priorities;
-Concerns related to cost implications of proposed measures;
-Technical assistance and support for capacity-building and
-Working with and the work of other relevant international organizations
The initiative of the WCO
- More than 50 years of work –
important technical progress in customs clearance and in
developing the process of administering and
co-operation of custom services of its member countries.
International Convention on the Simplification and
Harmonization of Customs Procedures
also called Kyoto Convention, adopted in 1973, revised in 1999.
Trade Capacity Building
The trade capacity - human, institutional and infrastructure capacity
necessary for all subjects who participate effectively in international trade.
- more efficient ports, road networks, automated equipment for
customs officials and significant investments in infrastructure
The sixth WTO Ministerial Conference, Hong Kong (13 -18 12 2005)
help for the project Aid for Trade
-USA grants of USD 2.7 billion a year by 2010
-EU EUR 2 billion per year by 2010
For trade related development assistance
Trade Transaction Costs (TTCs)
costs arising from supplying documents and
information required for border procedures or procedural delays
Direct incurred costs
- expenses relating to supplying information and documents to
the concerned authority and
indirect incurred costs
- mostly results of procedural delays.
Table 3. Welfare effects from Trade Facilitation measures
Key findings
Francois et al.
(2005)
Based on a CGE model exercise, the authors estimate that world annual income will increase by USD 72 billion (USD 151 billion)
following a 1.5% (3.0%) reduction in TTCs for goods trade. In proportion to national income, most of these gains would
benefit developing countries. All regions or major trading nations would benefit except China in the 1.5% reduction
scenario. All countries/regions would benefit in the 3.0%, or „full liberalisation“
OECD
Based on a CGE (GTAP – Global Trade Analysis Project) model exercise, the authors estimate that a 1% reduction in TTCs for
goods trade will bring annual gains of about USD 40 billion on a world basis. Most of these gains will benefit developing
countries in relative terms. There are no losers. Estimates as share of GDP reveals that Middle East and North Africa
(0.27%), non-OECD Asia Pacific (0.25%), OECD Europe (0.19%) and Sub-Saharan Africa (0.18%) would be particularly
well off.
Wilson et al.
(2002)
Based on a CGE model execise for APEC economies, the authors estimate that a 5% reduction in TTCs for goods trade will raise
APEC GDP by USD 154 billion, or 0.9%.
Commonwealth
Australia
(2002)
UNCTAD
(2001)
of
In terms of annual increases in real incomes measured in 1997 prices, gains from reforms of customs procedures are estimated to
be USD 0.4 billion in the Philippines, USD 2.3 billion in Singapore and USD 1.2 billion in Thailand.
A 1% reduction in the costs of maritime and air transport services in developing countries could increase global GDP by USD 7
billion (1997 value).
Source: Michael Engman, (2009), „The Economic Impact of Trade Facilitation“,
in Overcoming Border Bottlenecks — The Costs and Benefits of Trade Facilitation, OECD, p.85.
TTCs -15% of the value of the traded goods
The arch is from 2% to 15%.
UNCTAD TF results – savings of 2-3% of the value of traded goods
Table 4: Estimated benefits of Trade Facilitation in different
studies
Additional GDP growth
(billions UDS)
Share of Trade Facilitation
benefits in overall
liberalization
Dutch study
72
34%
OECD study
76
65%
APEC study
154
56%
Source: Anthony Kleitz (2003), “Costs and Benefits of Trade Facilitation”, in
Sharing the Gains of Globalization in the New Security Environment—
The Challenges to Trade Facilitation, United Nations Economic Commission for Europe, New York and Geneva, p. 65.