Developing countries of Asia-Pacific call for deeper regional connectivity

Red tape in trade identified as a key bottleneck

Over two hundred participants of the Asia-Pacific Trade Facilitation Forum from 33 countries in Asia and the Pacific made an urgent call on their governments to work closely with all stakeholders to streamline international trade procedures and ensure that regulations are simple, consistent and transparent.

The hidden cost of red tape amounts to US$300 billion a year in the Asia-Pacific region. It still takes 30 days to move goods from factory to ship deck in countries of the region, compared with 10 days on average for OECD countries.

Brought together by the United Nations Economic and Social Commission for Asia (UNESCAP), the United Nations Economic and Social Commission for Europe (UNECE), and the Asian Development Bank (ADB) in Kuala Lumpur, Malaysia, 5-6 October, participants also called for greater regional co-operation to advance paperless trading systems and increase trade in agricultural products.

The Malaysian Deputy Minister of Transport, Y.B. Datuk Abdul Rahim bin Bakri, said that the importance of regional connectivity has never been more pressing.

“As a regional community, we need to step up trade facilitation to reduce trade costs and promote growth and regional integration in order to counteract declining markets of the West.”

Ravi Ratnayake, Director of the Trade and Investment Division of ESCAP, said that “the somewhat shocking reality is that Asia-Pacific is better connected to Europe and America than with itself.” He added, “our research shows that, on average, trade costs of the region with North America and Europe are 20% less than those with itself.”

Cumbersome border procedures, sometimes requiring literally hundreds of approval documents in the region, make it easier and cheaper for countries to trade with far away developed countries than it is to do business with the country next door.

Naomi Chakwin, Director of the East Asia Department of ADB highlighted the advantages of paperless trading systems.

“The international supply chains are looking for ways to move away from a paper based documents towards paperless information exchange. Governments want to reduce the risk of global trade through less and better data and increased efficiency. It even fits in well with the global move toward eco-efficiency with aspirations for ‘green trade corridors’.”

She added, that “there is still much to do to achieve paperless trading systems in the region”, and all development partners “need to work together, to pool our resources and share our expertise with one another to overcome the obstacles to paperless trade.”

Outlining the next steps for the region, the Commerce Minister of Bangladesh, M. Faruk Khan, said that the success of trade facilitation measures depend on “an effective and integrated approach at the macro level.” He added, “as far as I personally feel, capacity building based on a thorough need assessment should be the immediate objective of international agencies like the UNESCAP and ADB.” He called upon the United Nations Network of Experts for Paperless Trade in Asia and the Pacific—UNNExT—to help developing countries in this endeavor.

The participants adopted a Road Map at the end of the Forum to push forward trade facilitation reforms at national and regional levels. Key recommendations include working towards a regional agreement for the legal recognition and electronic exchange of trade data and documents. Agricultural trade facilitation, particularly the need for governments and international development organizations to help overcome sanitary and phytosanitary barriers to trade, was highlighted. The Forum also proposed the development of sub-regional single window facilities to facilitate submission and processing of trade related data and documents in South Asia and Central Asia, building on the experience of ASEAN and UNNExT experts.

The Forum was held in collaboration with the Ministry of International Trade and Industry, Malaysia’s DagangNet, the ASEAN Secretariat, USAID, the United Nations Conference on Trade and Development (UNCTAD), and the Global Facilitation Partnership for Transport and Trade (GFP).

For more information, please visit www.unescap.org/tid/projects/tfforum.asp.