The fundamental objective of the UN/CEFACT-sponsored project is to articulate the linkages and complementary nature of Trade Facilitation activity (initially, Single Window market access programs) with the financing of international commerce under the broad array of Trade Finance and Supply Chain Finance solutions. This paper asserts the strategic importance to “bridge” Single Window, Trade Finance and Supply Chain Finance instruments, practices, and supporting technologies, demonstrating that the inclusion of financing as an in-scope element of Trade Facilitation presents significant, untapped potential in trade-based international development.
In essence, getting everything right around the physical movement of goods (i.e., the commonly understood scope of Trade Facilitation) is important. However, in the absence of adequate and affordable levels of financing and risk mitigation, such activities will only partially allow importers and exporters to conduct trade in a sustainable way. Furthermore, the economic and development objectives will only be partially achieved.
Trade Facilitation is a mature discipline, a critical contributor to development efforts, either at the policy level or at the transactional level, and the adoption, effectiveness and success of Single Window programs (being deployed in OECD economies, as well as in near frontier-status developing economies) represents a clear and striking success in the business of Trade Facilitation. Single Window initiatives are at various stages in development along a wide spectrum, from basic services and capabilities to comprehensive programs.
Acknowledging the significant promise in Single Window programs, the exclusion of financing as an element of the these efforts, and as a key component of Trade Facilitation, misses a critical commercial reality that underpins global trade flows, trade relationships and international supply chains: lack of adequate levels of financing (including risk mitigation) is consistently identified as a major obstacle to the pursuit of additional opportunities in international markets.
The opportunity to integrate (i.e., bridge) Trade Finance and Supply Chain Finance practices and solutions into Trade Facilitation activities, including Single Window market access programs, is clearly there, and can be pursued through a range of industry players active in financing international commerce.
This UN/CEFACT-sponsored project provides an opportunity to undertake qualitative and quantitative analysis around the opportunities and the value-creation that will flow from bridging financing into Trade Facilitation activity, and to do so concurrently from the perspective of Trade Facilitation practitioners and Trade Finance and Supply Chain Finance experts.
- Mr. Raffaele Fantetti (Vice Chair - UN/CEFACT)
- Mrs. Liliana Fratini Passi (Domain Coordinator and CBI Managing Director)
- Dr. Marc Auboin (Counsellor and Trade Finance expert - World Trade Organisation)
- Mr. Eugenio Cavenaghi (Head of Trade Finance Operations - Santander Bank)
- Mr. Alexander Malaket (Senior Trade Finance Expert)
- Ms. Alisia Di Caprio (Research Fellow, Asian Development Bank Institute)
- Mr. Enrico Camerinelli (Project Editor and AITE Group)