UNECE

UNECE Integrated Approach to Trade Facilitation

Tom Butterly

Deputy Chief

Global Trade Solutions Branch

UNECE Capacity-Building Workshop on the WTO Trade Facilitation Negotiations

12-13 June 2006, Chisinau, Republic of Moldova

UNECE

Agenda

1. UNECE Integrated Model of Trade Facilitation

2. UN/CEFACT Standards, Recommendations and Tools

3. International Trade Single Window

4. Capacity Building

UN Economic Commission for Europe (UNECE)

UN Centre for Trade Facilitation and Electronic Business UN Centre for Trade Facilitation and Electronic Business (UN/CEFACT)(UN/CEFACT)

UNECE

UNECE Integrated Model of Trade Facilitation

UNECE’s objective in international trade: to facilitate and strengthen the integration of member States, and especially countries in transition, into the European and global economy.

UNECE region - two thirds of world trade

UNECE

Trade Facilitation in the UNECE Context

Trade Facilitation is a key tool of UNECE to achieve this objective

This work in trade facilitation supports the UN Millennium Development Goal 8 – to develop further an open trading and financial system that is rule-based, predictable and non-discriminatory.

UNECE

Trade Facilitation

“The simplification, standardization and harmonization of procedures and associated information flows required to move goods from seller to buyer and to make payment “

Facilitate - to make easy or easier

UNECE

SupplySupply

Sources:plantsvendorsports

Manufacturers,Regionalwarehouses:stockingpoints

Fieldwarehouses:stockingpoints

Customers,demandcenters

MaterialProduction/purchasecosts

Manufacturing/Inventory &warehousingcosts

Transportationcosts Inventory &

warehousingcosts

Transportationcosts

Source: Simchi-Levi & al , 2000

Supply Chain

UNECE

INTERNATIONAL TRADE TRANSACTION PROCESS

CommercialProcedures

• Establish Contract

• Order Goods• Advise On

Delivery• Request Payment

TransportProcedures

• Establish Transport Contract

• Collect,Transport and Deliver Goods

• Provide Waybills, Goods Receipts Status reports

RegulatoryProcudures

• Obtain Import/Export Licences etc

• Provide Customs Declarations

• Provide Cargo Declaration

• Apply Trade Security Procedures

• Clear Goods for Export/Import

Financial Procedures

• Provide Credit Rating

• Provide Insurance

• Provide Credit• Execute Payment• Issue Statements

INVOLVES

Prepare For

ExportExport Transport Import

SHIPBUY PAY

Prepare For

Import

UNECE

Constitution dossier Achat

Signature et cachet

Résultat contrôle Labo

Labo Contrôle

Fax et courrier

Préparation Titre d'importation

Assurance

Suivi commande

Lettre d'engagement si produit inflamable

Constitution Dossier

Calcul de la freinte

Stockage

non conforme

Formulaire d' écart

Lettre de non conformité / F

Produit Isolé

B. de Retour MP

Enregistrement Informatisé

B. d'entrée interne

Vérification de la saisie

Calcul prix de revient

Classement et Archivage

Photocopie document

conforme

Transporteur

Livraison

Avis d'embarq.

Documents d'expédition

Agence Maritime

Déclaration douanière

Règlement douane

Enlèvement M.P

D T C

Contrôle Périodique

Note d'achat Demande d'offre de prix

B.C ManuelAnalyse des d'offres

Stock Mini atteint

B.C informatisé

55

Offre de prix fact. Proforma

Confirmation Commandes

17

16108

2322

1918

24

1 2 4

Classement des documents

Produit retourné

Comptabilité

Transitaire

3

52

5543 1086

18

9

19 20 22

30 31

32 33

8 29185 17 21

14 12

13 11

13 14

6

5 8 29 30 31

32 33

3

16 17

1716

Photocopie Doc.

Prélèvement des échantillons

Déchargement

Contrôle Qté Signat. & Cachet BL

Réception

11

16 17 2828

5 8 21

30 31

29

3332

Etiquettage non-conformité

2121

28

27

23

10 19

18 24

8

22

24

333231302921

36

11

7

15

15

15

12

12 12 12 12

12

Constitution dossier Achat

Signature et cachet

Résultat contrôle Labo

Labo Contrôle

Fax et courrier

Suivi commandeConstitution

Dossier

Calcul de la freinte

Stockage

non conforme

Produit Isolé

Enregistrement Informatisé

Vérification de la saisie

Calcul prix de revient

Classement et Archivage

Photocopie document

conforme

Transporteur

Livraison

Avis d'embarq.

Documents d'expédition

Agence

Maritime

Déclaration

douanière

Règlement douane

Enlèvement M.P

Contrôle Périodique

Demande d'offre

de prix

Analyse des d'offres

Stock Mini atteint

B.C informatisé

33

Offre de prix fact. Proforma

Confirmation Commandes

98651

Classement des documents

Produit retourné

Comptabilité

Transitaire

2

32

332 54 6

12 13 14 15

5 763

4

3 5 11 12 13

14 15

2

Photocopie Doc.

Prélèvement des échantillons

Déchargement

Contrôle Qté Signat.

& Cachet BL

Réception

3 5 7

12 13

11

1514

77

8

5 9615141312117

16

D T C

911

Total Trade Transaction – Integrated supply-chain

The UN/CEFACT Vision

Trade facilitation

Competitiveness – trade efficiency

UNECE

Enquiry ValidationCredit Arrangements

Refund claim

Long Leaditems

Export LicenceShort Lead Components

Delivery to port

DocumentationDehire GKN pallets

Delivery to customers warehouse

Unload and store

Retail sale

Payment by customer

Payment oftransportand FOBcharges

£

Added valueand cost

Omagh to Algeria. 1 Order – 360 net tonnes, 21 weeks

Invoice and order administration

Unload, re-pack

Delivery to customs warehouse

Exit clearance from community

Refund payment and administration

12 13 15 16 19 21 Weeks

(approx)

Main vessel loading

Sea Crossing

Main vessel off-loading

Artwork Order receipt and administrationRequest Health Certificates, Licences

Documentation

Pre-shipment InspectionCustoms formalities (Inland)

Manufacture

Load and despatch

Proof of export

Inwards clearance

Economic efficiency

UNECE

UNECE

UNECE

The Work of Trade Facilitation

It encompasses the systematic rationalization of processes, procedures, infrastructures, documentation and information exchange for international trade.

Involves Customs, other regulatory agencies, transport, ports, customs brokers, freight forwarders, finance, insurance, legal issues, etc

It requires strong dialogue and partnership between government and the business community

UNECE

Strategic Approach to Realising the Benefits of Trade Facilitation

Undertake detailed needs analysis and set priorities at both the national and regional level

Total trade transaction approach

Involve the business community from the outset

Cultivate the necessary political will

UNECE

Strategic Approach to Realising the Benefits of Trade Facilitation

Develop national and regional implementation strategies, with trade facilitation as a key trade and economic development instrument

Manage the technical assistance and capacity building process

Use existing trade facilitation standards, tools and instruments

UNECE

Why has Trade Facilitation become more popular

Economic Benefits - shift in focus from technical to trade/economic policy perspective

Greater demands from business for predictability and speed

Information requirements International Supply Chains Investment Link Trade Facilitation at the WTO

UNECE

Economic Benefits Estimates vary from 1-15% of total trade

transaction costs

Even if only 1%, OECD estimates total gains to world economy of US$40, billion

APEC estimates gains of US$46 billion from trade facilitation measures - adopted TF as key policy target.

UNECE

Economic Benefits Benefits higher for developing countries and

for SMEs

Greater than the potential value of increased tariff reductions under future multilateral trade negotiations.

Inefficient or unnecessary process and controls add no value whatsoever

UNECE

Recent UNECE Study on TF

TF plays a crucial role in deriving benefits from overall trade liberalisation policy

Even in non-liberalised economies significant benefits cold be gained

The introduction of trade liberalisation measures without parallel trade facilitation initiative might fail to realise their full economic potential.

UNECE

Agenda

1. UNECE Integrated Model of Trade Facilitation

2. Best Practice - UN/CEFACT Standards, Recommendations and Tools

3. International Trade Single Window

4. Capacity Building

STEP BY STEP PROCESSSTEP BY STEP PROCESS

Process Analysis

Process Simplification and Harmonization

Document Simplification and Standardization

Data Harmonization

Cross Border Data Exchange

Single WindowSingle Window

UMM

Business/Political Process Collaboration Between Trader and Govt

UN Layout Key, UNTDED, TF Toolkit and Forms Repository

UNTDED, CC,Locode, code lists

UNeDocs, WCO DM

Rec 33, 34,35

UNECE

UN/CEFACT UN/CEFACT: United Nations Centre for Trade Facilitation and Electronic

Business

Open to all UN Member States and Organisations Recognised by ECOSOC

Global Mandate

Driven by member States – Plenary and Forum

Over 400 international experts – meets worldwide

Vision: Simple, Transparent and Effective Processes for Global Commerce

UNECE

UN/CEFACT Standards and Recommendations

Over 30 Recommendation, many of which are ISO Standardso Recommendation 1 - UN Layout Key for Trade

Documents (ISO 6422)o Recommendation 25 - UN/EDIFACT (ISO 9735)o Recommendation 33 - Single Window o UNeDocs - IDSo UNTDED (ISO 7372) – CCTS - WCO Customs

data modelo Recommendation 4 on TF Structures

UNECE

Trade Document Simplification and Standardisation

The United Nations Layout Key for Trade Documents

UNECE

Enquiry ValidationCredit Arrangements

Refund claim

Long Leaditems

Export LicenceShort Lead Components

Delivery to port

DocumentationDehire GKN pallets

Delivery to customers warehouse

Unload and store

Retail sale

Payment by customer

Payment oftransportand FOBcharges

£

Added valueand cost

Omagh to Algeria. 1 Order – 360 net tonnes, 21 weeks

Invoice and order administration

Unload, re-pack

Delivery to customs warehouse

Exit clearance from community

Refund payment and administration

12 13 15 16 19 21 Weeks

(approx)

Main vessel loading

Sea Crossing

Main vessel off-loading

Artwork Order receipt and administrationRequest Health Certificates, Licences

Documentation

Pre-shipment InspectionCustoms formalities (Inland)

Manufacture

Load and despatch

Proof of export

Inwards clearance

Economic efficiency

Codes for Trade InformationRec 19:

Mode of TransportRec 16:

UN/Locode Rec 3: ISO Country Code

Rec 17:Payment Terms

Rec 9:Currency Code

Rec 20: Units of Measurement

Rec 28:Means of Transport

Commodity Code

Rec 21:Package Codes

UNECE

United Nations Standards for Trade Documents… SAD

UNECE

UN Trade Facilitator Toolkit

Practical tools that help trade facilitators to align

trade documents

Guidelines for Trade Facilitators

UNLK Grid in Adobe Acrobat

Background material (UNLK, UNTDED..)

Beta version available from our website at

http://unece.unog.ch/etrade/

UNECE

Standardisation and harmonisation of trade documents is a prerequisite for paperless trade

UNECE

XMLXML

Exporter

Importer

PAPERPAPER

Importers Bank

EDIFACTEDIFACT

F ForwarderHTML/PDFHTML/PDF

•Electronic Signature

•Document Validation

•Electronic Post Mark

•Language switching

•National Requirements

•Time Stamping….

Digital Document Digital Document Web ServicesWeb Services

Office PCStandard user software, Internet Browser

Back-end Server

UNeDocsUNeDocsTrade & TransportTrade & Transport

DocumentsDocuments

Security, efficiency, speed,best business practice,

ICT integrationAdds

Provides specialised services Cost Recovery basis

Internet

UNeDocs

UNECE

Agenda

1. UNECE Integrated Model of Trade Facilitation

2. UN/CEFACT Standards, Recommendations and Tools

3. International Trade Single Window

4. Capacity Building

STEP BY STEP PROCESSSTEP BY STEP PROCESS

Process Analysis

Process Simplification and Harmonization

Document Simplification and Standardization

Data Harmonization

Cross Border Data Exchange

Single WindowSingle Window

UMM

Business/Political Process Collaboration Between Trader and Govt

UN Layout Key, UNTDED, TF Toolkit and Forms Repository

UNTDED, CC,Locode, code lists

UNeDocs, WCO DM

Rec 33, 34,35

UNECE

International Trade Single Window

UN/CEFACT Recommendation 33 defines a Single Window as a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfil all import, export, and transit-related regulatory requirements.

If information is electronic, then individual data elements should only be submitted once.

Current situation for exchanging trade information with

government

Electronic

Agriculture

Paper

Trader

Customs

Health Dept

Transport

Current Situation for Government & Traders

The Single Window approach

Electronic

Agriculture

SingleWindow

TraderTransport

Customs

Health Dept

A 'Single Window' environment

Paper

A simple, A simple, one-stop one-stop solution solution offering offering official official control control with trade with trade facilitationfacilitation..

UNECE

UN/CEFACT Single Window Recommendation 33 Calls on Governments to establish a Single

Window with the following features:

Allow traders to lodge standardized information and documents with a single entry point to fulfil all import, export, and transit-related regulatory requirements

If information is electronic then it need only be submitted once

Allow for the sharing of information amongst government agencies in respect of international trade transactions

UNECE

Recommendation 33 calls on Governments to Establish a

Single Window with the following features (continued):

Provide coordinated controls and inspections of the various governmental authorities.

Allow payment of duties and other charges

Be a source of trade related government information

Recommendation includes a set of Guidelines for the establishment of a Single Window

UNECE

UN/CEFACT Single Window Case Study Repository

Finland Germany Guatemala Hong Kong SAR (China) Mauritius Japan

Malaysia Senegal Singapore Sweden United States Korea.

More case studies (Ghana, Australia …)

Each case is described in a standardized templateEach case is described in a standardized template

Diversity of SW models: adopting to specific national/regional conditions and requirements

Financing o By the State (Finland, Sweden, United States),o By the private sector (e.g. Guatemala, Germany) o private-public partnership (e.g. China, Malaysia, Mauritius, Senegal, Singapore)

The use of Single Windowo compulsory (Finland, Guatemala, Mauritius, Senegal)o voluntary (China, Germany, Malaysia, Sweden, United States)

Serviceso Free on charge (Finland, Sweden, United States) o Paid based on various payment schemes (Guatemala, Germany, China, Malaysia,

Mauritius, Senegal, Singapore)

Benefits and Costs of a Single Window

Benefits for government and trade

Faster processes, clearance and release

Reduced costs of compliance

Reduced corruption

Reduction in bureaucratic processes

Better collection of government revenues

Improved trader compliance

risk management techniques for control and

enforcement purposes

Predictable application and explanation of rules

Implementation costs

From less than one million US dollars (Guatemala) to

Between 1and 4 million dollars (Finland, Senegal, Malaysia)

In the US, the cost was significantly higher but the system is quite extensive and covers many additional areas.

Benefits outweigh costs ……

UNECE

Key factors for success

Strong leadership, which can come from the private (Guatemala) or

the public sector (Malaysia, Senegal, United States, Singapore,

Korea, Australia)

Cooperation and commitment of all stakeholders, private and public

(Finland, Mauritius, Malaysia, Senegal, United States, Singapore)

User-friendly system, which do not create complications for usual

business procedures (China, Malaysia, Sweden, Senegal, United

States)

Investments in modern technologies (Guatemala, Malaysia)

Phased, flexible approach (Germany, Mauritius, Singapore)

UNECE

Next Steps for UNECE …

Develop Recommendation 34 on Data Harmonisation

Develop Recommendation 35 on Legal Framework for Data Exchange

Establish a Single Window Stakeholder Group

Develop a Cross Border Reference Data Model

UNeDocs pilot implementations

Expand SW Repository on the Web

Welcome to participate in work

UNECE

Agenda

1. UNECE Integrated Model of Trade Facilitation

2. UN/CEFACT Standards, Recommendations and Tools

3. International Trade Single Window

4. Capacity Building

UNECE

Capacity Building Approach

Capacity building workshops to help countries understand available recommendations and standards and see where they can fit their needs

One Size does not fit all – but standards essential

National regional strategies

Partnership approach

National Experience

UNECE

UN/CEFACT Comprehensive Guide to Trade Facilitation Implementation

The Guide will help countries to:o identify trade facilitation needs and prioritieso assess and understand available tools, techniques

and standardso assess costs for implementationo review implementation and funding optionso develop an effective national and/or regional trade

facilitation implementation strategy.

UNECE

The Guide

Guide Training material Website CD 6 Regional Training Workshops

Target Date for Completion of Guide – end 2006

UNECE

Relationship between the work of UNECE (UN/CEFACT) and other

international organisations in Trade Facilitation

Recommendations/ Standards Development and Maintenance

Capacity Building(Helping governments elaborate a national TF strategy)

Technical Assistance(Donors decide what is to be done) - UNECE does not provide long term TA

UNECE - UN/CEFACT

UNECE in partnership with

other organizations

UNCTAD,WB,UNIDO, etc 

 

UNECE’s role is to create the standards through participation of UN member States and the business community in UN/CEFACT Working Groups. We engage in an active Capacity Building programme to help countries

understand how best to implement these standards, given their unique needs, priorities and resources while other organizations assist in long –term technical assistance (UNCTAD, WB etc). The WTO sets the rules

 

WTO

UNECE

.. now we have to make trade facilitation happen!

UNECE

THANK YOUTHANK YOU ! !

tom.butterlytom.butterly@unece.org@unece.org

UNECE

Follow-up

All UN/CEFACT Recommendations, codes, standards and publications are available for free on our website at:

o www.unece.org/cefact/o www.unece.org/tradeo www.unece.org/etrades/unedocs/

o tom.butterly@unece.org