wto sps workshop...the current portfolio is over $7 billion for trade facilitation projects. 2 trade...
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WTO SPS WORKSHOP
Analysis and Diagnostics Technical Assistance
Financing of major trade infrastructure and institutional reform projects
Research and data products (LPI/Doing Business) Global advocacy and partnerships
WBG IS A MAJOR PROVIDER OF TRADE RELATED ASSISTANCE
The World Bank Group has implemented more than 120 customs, border management and trade facilitation projects over the past 20 years that have resulted in major improvements in terms of reduced time to import and export, as well as better transparency, predictability, and reduced transaction costs for traders.
Part of this is the WBG’s support to the WTO’s TFA agenda through the Trade Facilitation Support Program (TFSP)
The current portfolio is over $7 billion for trade facilitation projects.
2
TRADE FACILITATION SUPPORT PROGRAM (TFSP)
Launched in 2014 Designed to provide practical and demand-driven assistance Focuses on supporting the full and effective implementation of the WTO TFA and related trade
facilitation reforms Helps client countries identify constraints, plan reforms implementation, and align procedures with
international standards covering import, export, and transit activities.
OBJECTIVE Assist developing countries in reforming and aligning their trade facilitation laws, procedures, processes & systems to enable implementation of the WTO TFA Requirements
BIG GLOBAL GAINS
Reducing supply chain barriers could increase global gross domestic product (GDP) by US$ 2.6 trillion, around 5%. This estimate relies on countries improving just two key areas of trade facilitation – border administration and transport and communications infrastructure – halfway to global best practice. A less ambitious scenario, that of improvement halfway to regional best practice, would already lead to a global GDP boost of approximately US$ 1.5 trillion, or 2.6%. Source: World Economic Forum, the World Bank and Bain & Co. in 2012 in ITC 2013
Trade facilitation leads to big local gains
4 Subramanian, Uma, William Anderson, and Kihoon Lee. 2012. “Less Time, More Trade: Results from an Export Logistics Model.” Draft, Investment Climate Department, World Bank Group, Washington, DC
SO WHO IS AT THE BORDER?
Border Security
Customs
Animal Health
Plant Protection
Food Safety
Border
Management
Standards & Quality Control
Maritime, Aviation, Sea & Air Ports
Sanitary & Phytosanitary
Anti Narcotics
What is the reality? • Differing mandates - Security - Trade facilitation - Revenue - Public health • Resource constraints - Trained personnel - Modern equipment / ICT
TRADITIONAL BORDER MANAGEMENT APPROACH
• Silos / stand-alone operation
• Uneven use of ICT across agencies (paper-based vs some level of
ICT)
• Isolated data capture and processing
• Limited cooperation (incl ltd sharing of equipment) • Limited information sharing particularly on risk • High levels of physical inspection: seldom risk-based • Focus on physical border controls • Limited transparency • Mistrust of supply chain actors
• Single treatment of all clients (“one size fits all” regardless of
compliance)
WHAT DOES IT MATTER TO COUNTRIES?
Trade facilitation practices impact time and cost to trade, and a country’s performance both within and across regions
Time of Trade across Borders Cost of Trading across Borders
High Income OECD Countries
TRADE TRANSACTION TIME
Trade transactions vary widely from country to country. In 2017 these transactions involved
EXPORT IMPORT
Border Compliance 1 hour – 21.5 days
Document Compliance 1 hour – 92 days
Document Compliance 1 hour – 52.5 days
Border Compliance 1 hour – 24.5 days
Source: World Bank ‘Doing Business” Project, 2018
1 hour – 1.8 days 1 hour – 2.6 days 1 hour – 2.5 days 1 hour – 1 day
AND …
DA
YS
14 days
4 days
5 days
4.5 days
DOCUMENTS ASSEMBLY AND PROCEDURES
CUSTOMS AND TECHNICAL CONTROL
TERMINAL AND PORT
HANDLING
INLAND TRANSPORT
These categories account for more than 50 – 60% of the total time to export and import in many countries around the world.
Software issues Hardware and software issues
ECA county average import time
12
3
3
8
12
3 3
8
0
2
4
6
8
10
12
14
IN MANY COUNTRIES, HIGH COSTS ARE DRIVEN BY
DOCUMENTARY AND CLEARANCE PROCESSES
These categories account for 40% or less of the total time to export and import around the world.
Source: DB
29.4
11.36 10.636.9
12.7
6.28 7.3111
0
5
10
15
20
25
30
35
40
45
Less than US$ 5 M US$ 5 M to US$ 50 M US$ 50 M to US$ 500 M More than US$ 500 M
Inventory Management & WarehousingTransport & Distribution
42
18 18 18
Logistics costs have a disproportionate burden on smaller firms
Average logistics cost as a % of sales
Source: Centro Logístico de Latinoamerica, Bogotá, Colombia. Benchmarking 2007: Estado de la Logística en America Latina Anexo, María Rey Logistics Summit 2008
WHAT DOES IT MATTER TO THE CONSUMER ?
Cost breakdown for Pineapples imported from Costa Rica to St Lucia
10%
Producer Price
Land Transport
Ocean Transport + Port CR
Port Miami
Wholesale Consolidated
Cost
Other Costs
Ocean Transport + Port SL
Duties
Land Transport & Handling
Land Transport + Storage
Retail Profits + Other Costs
60%
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
Farm Gate (CR)
CR FAS Ocean to Miami
Miami Port Miami Warehouse
Miami FOB Price
Ocean to St. Lucia
St. Lucia Port Wholesale Distribution Retail Price
US$
/lb
Logistics costs increase prices for the consumers: 60% of the cost related to the importation of pineapples CR to Saint Lucia related to documentation preparation, border clearance,
transportation and logistics.
Source: Gain, 2013, Adapted from : Logistics, Transport and Food Prices in LAC (2009) and OECS Backward Linkages Study (2008)
Farm Gate price
30%
Transport and Logistics Costs
Consumer Cost Landed Cost
Farm Gate Price
Transport & Logistics
Consumer
WHAT DOES IT MATTER TO THE CONSUMER ? (II)
1.40 1.20 1.00 .80 .60 .40 .20 0
US$
per
kilo
gram
Farm
Gat
e Pr
ice
Pr
oduc
er
Pric
e
Customs – 11% Taxes – 6% Transportation – 23% Other – 9% Farm Gate Price – 31%
Logistics Costs – 40%
Cost of Exporting Tomatoes from Costa Rica to Nicaragua Logistics costs and customs clearance are greater than taxes in the final price of the product, and are therefor a major challenge for regional competitiveness
Source: modifications from IDB (2010), “How to Reduce Integration Gaps” and WBG study Supply Chain Analyses of Exports and Imports of Agricultural Products: Case Studies of Costa Rica, Honduras, and Nicaragua
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