A new UN report shows that just over half of the ambitious measures for cutting red tape for global trade have been implemented and the disparity in progress between developed and developing economies still exists.
UNECE together with the other United Nations Regional Commissions (UNRCs) launched the first Global Report of the Joint UNRCs Survey on Trade Facilitation and Paperless Trade today. Key findings from the report suggest that the average implementation rate for the ambitious set of trade facilitation measures considered in the report is about 53%. The developed economies’ average implementation rate exceeds 75% in contrast to the implementation rate for Pacific Island developing economies which barely reaches 26%.
The UNECE regional report, launched on the same day, finds that, on average, the UNECE countries that took part in the survey have implemented about two thirds of the measures. In addition, about a third of the 27 countries included in the Survey have a level of implementation of 80% or above. On the other hand, the level of implementation barely reaches 60% in thirteen countries, most of which are from Central Asia and the Caucasus.
Figure 1: Overall implementation of Trade Facilitation Measures in the UNECE region
Figure 2: Implementation Score as a Percent by Income Group
Figure 2 shows, for two groups of countries in the UNECE region (Middle-income and High-income) the average implementation as a percent of the maximum possible score. The regional average of implementation is 62%; Transparency has the highest percentage of implementation for both income-level groups. It reached 88% for High Income Countries and 71 % for Middle Income Countries. Cross-Border Paperless Trade has the lowest percentage of implementation for both groups. It barely reaches 54% for High Income Countries and only 23% for Middle Income Countries.
The Survey was initiated in response to the lack of data on implementation of measures aimed at simplifying and reducing the cost of import, export and transit procedures, including by moving from paper to electronic documents in trade transactions. Implementation of such trade facilitation measures is seen as key to maintaining trade competitiveness and enabling the effective engagement of firms, including SMEs, in regional and global production networks.
Highlighting the importance of this initiative, Virginia Cram-Martos, Director of UNECE’s Economic Cooperation and Trade Division, said: ‘‘UNECE’s engagement in such surveys will help develop benchmarks that show what is possible and the leading trends in implementation given that some of the economies which are the most advanced in Trade Facilitation are located here. This will be useful information for our region, including our less advanced economies, as well as for the rest of the World.’’
The Global Report provides data for 119 economies and provides a useful basis for monitoring trade facilitation performance. It includes information on the implementation of some of the key measures included in the WTO Trade Facilitation Agreement as well as some innovative and technology-driven ‘paperless trade’ measures aimed at enabling trade using electronic data rather than paper-based documentation.
The top trade facilitation performer in the Global Report is the Netherlands. Singapore and the Republic of Korea lead East Asia, United Arab Emirates leads the Middle East and North Africa region, and Benin and Mauritius lead the Sub-Saharan Africa region. India leads the way in South Asia while Russia and Turkey lead the East Europe and Central Asia region. Several leaders emerge in Latin America and the Caribbean including Mexico, Colombia, Ecuador and Chile.
Overall, the Report finds that most economies have already taken concrete steps towards streamlining trade procedures. A significant number of developing economies, particularly in East Asia and Latin America and the Caribbean, have actually implemented many of the commitments associated with the WTO TFA. For most, however, a lot remains to be done. An integrated step-by-step approach is suggested, starting with building up institutional arrangements and inter-agency cooperation.
Going forward, the adoption of modern information and communication technologies, the development of legal frameworks enabling the exchange of electronic data and documents across borders, as well as traditional measures, capacity building and strengthened cooperation between countries at the regional and global level will certainly be needed to support cutting red tape and reducing high trade costs. In this respect, the standards and recommendations developed by the UNECE on trade facilitation and electronic business including Recommendation No. 33 (Recommendation and Guidelines on establishing a Single Window to enhance the efficient exchange of information between trade and government) and others are extremely useful tools.
The Survey, led by ESCAP, was developed in collaboration with the OECD and implemented by the five UNRCs. The reports are available at: http://unnext.unescap.org/UNTFSurvey2015.asp
Note to editors
The Survey was conducted in twenty-seven countries in the UNECE Region. The Survey instrument was prepared taking into account the final list of provisions included in the WTO Trade Facilitation Agreement (TFA). It covers 31 Trade Facilitation Measures divided into three groups: General Trade Facilitation measures, Paperless Trade and Cross-Border Paperless Trade. The group “General Trade Facilitation” is divided into three subgroups: Transparency, Formalities and, Institutional Arrangements and Cooperation.
The data were collected by UN Regional Commissions (UNRC) for their respective member States. The data for Central Asian countries were taken from the survey managed by ESCAP for Asia and the Pacific. The UNRCs adopted slightly different approaches for data collection and validation, adapting the three-step approach followed by ESCAP to their own regional context. For the UNECE regional report, 31 indicators were used whereas in the global report 38 indicators were used for analysis.