Trade Facilitation

A parallel event to the 
International Ministerial Conference of Landlocked and Transit Developing Countries and Donor Countries and International Financial and Development Institutions on Transit Transport Cooperation
Almaty, Kazakhstan on 28-29 August 2003

Chairman's Summary*
Ambassador Matthias Meyer, Switzerland

Trade facilitation is about providing an environment for trade and transport that reduces the cost of international trade transactions. For landlocked and transit developing countries transaction costs can be excessive, often pricing exports out of the international market and significantly increasing the costs of imported goods. Reduced transport availability and excessive transport and trade-related costs can thus constitute major barriers to foreign markets and to an effective integration of landlocked developing countries in the global economy. Efficient trade facilitation therefore leads to better trade integration and stimulates local and international investment.

Based on the UNCTAD issue note prepared for this Roundtable, the Chairman indicated main areas that call for improvement, particularly in the context of landlocked and transit developing countries: (1) Regional transport corridors can play a major role in facilitating transit transport but require a consensus between countries on common rules and standards; (2) Regarding Infrastructure, countries should make every effort to construct "missing links" in regional transport networks and to encourage competition between transport modes; (3) Transport policies should promote the integration of local transport operators into global transport systems allowing them to take advantage of advanced technologies and operating practices; (4) Partnerships among trading and transport agents, private and public, can improve trade management.

The Minister of Transport from the Islamic Republic of Iran highlighted the priority being given to the development of new transit corridors serving both the international transport needs of neighbouring countries as well as the national transport needs supporting local economic development along these corridors. The new North-South transit corridor will provide a much cheaper sea-access route for Central Asian countries than existing options. The Minister stressed his Government was actively seeking the participation of foreign investors in these developments.

The meeting noted that a number of international institutions and donors are giving increasing attention to trade facilitation initiatives. This situation requires multilateral, regional and sub-regional coordination in order to secure the efficient implementation of trade facilitation programmes. These programmes need to cover the concerns of different sectors of the national economy, in particular Customs, Commerce, Transport and Security. Stakeholders are not only public institutions but also private trade and transport companies and individuals that may be affected by Government's policies and actions. The programmes need therefore to be comprehensive and coherent to secure tangible benefits within a reasonable time frame. Furthermore, advantage should be taken from the expertise of regional development organizations that can tailor global initiatives into regional solutions.

The meeting also noted the need for building the management capacity of public administrations to better adapt internationally-agreed trade and transport instruments and commercial best practices. The experience from developed countries shows that this endeavour requires considerable time and resources. Equally there was a need to strengthen the commercial capabilities of national service suppliers and to increase the competitiveness of the transport services sector. Partnerships with the foreign private sector may offer the possibility to improve these services.

The panel included representatives of four international organizations, namely the World Customs Organization, the UN Economic Commission for Europe, the UN Conference on Trade and Development and the World Bank. In a coordinated and single presentation, the four organizations delivered a unified message. They observed that institutional instruments (e.g. the revised Customs Kyoto Convention, UNECE recommendations) have been developed; that a number of diagnostic methodologies related to Customs, trade and transport have been established, and that information technology and specific tools (e.g. ASYCUDA and ACIS) are available. However, trade facilitation is not just about standards and technology, it is equally about rationalizing and integrating business and administrative processes. While international organizations and donors can assist countries, it is up to their Governments to effectively implement changes. This calls for a strong and continuous political will, supported by appropriate facilitation mechanisms (e.g. facilitation bodies, clusters, etc.), at national and sub-regional levels.

The meeting also referred to the situation in the Central Asian region for which, in most of the countries, the complexity of international trade and transport is relatively new. Participants and panellists made specific mentions of the excessive bureaucracy the outdated or -sometimes- inexistent regulations, the lack of harmonization of codes, procedures, and documents both at national and regional levels. Some participants commented on their programmes and activities to improve this situation. A panellist also indicated that the present capacity of local providers of international transport services was limited. Increasing the competitiveness of this sector and fostering partnerships with foreign operators would stimulate trade and development.

The Roundtable concluded that more efficient trade facilitation has high economic benefits. Particularly in landlocked countries, it can be a crucial element for increased trade. Trade facilitation is also perceived as a factor of good governance and will stimulate both national and foreign direct investment. The development of international transport corridors is recognized as high priority. They not only benefit landlocked countries but are also "win-win" investment for transit countries when they are linked to in-country investment and growth along the corridors. Finally, the discussion on trade facilitation was considered timely, given the fact that the international community will have to decide, at Cancun, in two-week time, whether trade facilitation rules should be negotiated at WTO.

An issue note was made available to the participants with proposals on capacity building elements to plan and implement trade facilitation programmes in the context of transit transport corridors. (UNCTAD/SDTE/TLB/2003/2)

The note deals with available institutional, technological and framework solutions, including human resources and management capacity components. It is divided into three main parts. The first one discusses the assessment of transport and trade facilitation needs and priorities and how to ensure that transport and trade facilitation measures are made suitable for the country or region concerned. The second part deals with an overview of the variety of solutions to be taken into account based on an analysis of non-physical barriers affecting trade and transport operations of landlocked countries. The third part deals with some possible institutional mechanisms to take the lead in the design of transport and trade facilitation programmes through concerted actions among local private and public trading and transport-related communities, replicated at national and regional levels.

* The opinions expressed in this summary are those of its author and do not necessarily reflect those of the UNCTAD secretariat.
** The opinions expressed in this linked  website are those of its web-author(s) and do not necessarily reflect those of the UNCTAD secretariat.