Trade Facilitation

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International Civil Society Forum 2005 FOR
ADVANCING LDC INTERESTS IN THE SIXTH WTO
MINISTERIAL 3-5 October 2005 Dhaka Sheraton Hotel

• Trade Facilitation
• Farooq Ahmed
• Secretary
• Metropolitan Chamber of Commerce and Industries
  (MCCI)

CENTRE FOR POLICY DIALOGUE (CPD) B A N
G L A D E S H
a c i v i l s o c i e t y t h i n k t a n
k
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Background

• 1st taken up as an agenda at Singapore Conference
  in 1996 along with three other issues
• Prior work by WB, WCO, UNCTAD
• Removal of administrative/logistical obstacles to
  facilitate move of goods
• Article V, VIII X of GATT 1994
• Widening of Trade Facilitation concept
  modernization automation of export/import
  procedures

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Definition

• As per WTO
• The simplification and harmonization of
  international trade procedures, with trade
  procedures being the activities, practices and
  formalities involved in collecting, presenting,
  communicating and processing data required for
  the movement of goods in international trade

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Perceived Benefits of Trade Facilitation

• Efficient border management process, up-to-date
  administrative methods, revenue collections,
  detection of illicit goods trafficking
• Cost effective trade-related infrastructure
  development
• Faster movement of goods
• Government/business/consumer benefits from a
  lower trade transaction cost resulting from
  elimination of duplicative and unnecessary border
  management activities

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Perceived Benefits of Trade Facilitation

• Easier access not only to developed country
  markets but also the markets of developing and
  advanced developing countries
• FDI will be encouraged by the creation of a more
  open and effective trade regime.

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Initial Progress on Trade Facilitation Negotiation

• Doha Declaration further expediting the
  movement, release and clearance of goods,
  including goods in transit, and the need for
  enhanced technical assistance and capacity
  building
• Negotiations after the 5th Ministerial at Cancun
• CTG to review Article V (Freedom of Transit),
  VIII (Fees and formalities connected with
  Importation and Exportation) X (Publication and
  Administration of Trade Regulations) of GATT 1994

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3 Tasks for CTG

• To review, clarify and improve relevant aspects
  of Article V, Article VIII and Article X of the
  GATT 1994
• To identify the trade facilitation needs and
  priorities of Members, in particular developing
  and LDCs
• To examine the issue of technical assistance and
  capacity building

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Current Status of Negotiation

• July Package
• ? Clarify, improve relevant aspects of Articles
• ? Technical assistance and support for capacity
  building
• ? Effective cooperation between customs or any
  other appropriate authorities on trade
  facilitation and customs compliance issues

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Current Status of Negotiation

• Exemption
• ?LDCs exempted from undertaking commitments
  inconsistent with their individual development,
  financial and trade needs or their administrative
  and institutional capabilities.

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LDCs Concern on Trade Facilitation

• Special and Differential Treatment
• Support for capacity building
• Transparency
• Sound Border Management
• Transit
• Development and implementation issues

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LDCs Call at the 5th Hong Kong Ministerial

• LDCs should identify their trade facilitation
  needs and priorities
• Operationalization of S D provisions
• Support for technical assistance and capacity
  building
• Simplification of custom procedures
• Time frame commitment from developed and advanced
  developing countries
• Harmonization of commodity standards/codes
• Special attention for the landlocked and small
  island developing countries

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Trade Facilitation Bangladesh Perspective
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South Asia South East Asia
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Bangladesh Bridge between SA ASEAN
Chittagong port connecting Colombo, Madras,
Calcutta Thailand
China
Nepal
Bhutan
Pakistan
Chittagong Port
Mayanmar
India
Calcutta
Thailand
Bangladesh
Madras
Sri Lanka
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Chittagong Port

• 80 of the trade flows of Bangladesh pass
  through Chittagong port
• High shipping and port costs
• Inadequate handling equipment
• Lack of efficient port management system

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Chittagong Port

• Capacity is to handle 2 laks TEUS (twenty feet
  equivalent units per annum) handled 6.88 laks of
  TEUS in 2004
• With average 15 export growth per annum,
  should be required to handle 1.175 million TEUS
  by 2011
• Cost of handling a 20 feet container in
  Chittagong port is around US 600
• whereas in other regional hub ports like
  Singapore, Colombo, Mumbai and Bangkok, the cost
  is around US 216, US 220, US 450 and US 360
• Turn round time 5 to 7 days - compared to
  Colombo is 1-2 days, Madras 4 5 days, Bangkok 2
  days and Singapore 1 2 days.
• 48 endorsement for release of goods
• Long turn round time inefficient handling
  cost additional US 20,000 per vassel

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Development of Chittagong Port as part of Trade
Facilitation

• Infrastructure development
• Modern cargo handling equipment
• Skill development of port operators
• Cost cutting strategy
• System automation
• Cargo space to lessen congestion
• Support for Technical Assistance Capacity
  building

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• Thank You