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It is almost taken as a matter of definition that IT is an integral part of trade facilitation (TF) which objective is to expedite the movement, clearance, and release of goods, including goods in transit. Yet for many developing and least developed countries, especially those from Asia, IT remains a distant but desirable goal. There are many and varied reasons behind this, and it is not the purpose of this chapter to lay them out. However there appears to be some confusion regarding IT in TF. The common perception is that adopting automation for trade transactions automatically leads to speedier movement of goods and people. This is tantamount to a mechanistic way of looking at IT. This kind of confusion is clearly misplaced. After all, the installation of computers, software, and other peripherals is only the instruments for TF and there is no immediacy to improvements in efficiency and reduction in transactions costs. Recall the “productivity paradox” associated with the use of IT in US industries…

By Florian A. Alburo
It is almost taken as a matter of definition that IT is an integral part of trade facilitation (TF) which objective is to expedite the movement, clearance, and release of goods, including goods in transit. Yet for many developing and least developed countries, especially those from Asia, IT remains a distant but desirable goal. There are many and varied reasons behind this, and it is not the purpose of this chapter to lay them out. However there appears to be some confusion regarding IT in TF. The common perception is that adopting automation for trade transactions automatically leads to speedier movement of goods and people. This is tantamount to a mechanistic way of looking at IT. This kind of confusion is clearly misplaced. After all, the installation of computers, software, and other peripherals is only the instruments for TF and there is no immediacy to improvements in efficiency and reduction in transactions costs. Recall the “productivity paradox” associated with the use of IT in US industries.
But the counter-claim is that calls for the use of IT have not really been in isolation from the larger set of needs the trading system requires. What is evident however is that the IT message is forthright while its associated ingredients are either ambiguous or simply taken for granted. Of course these always turn out to be long lists of requirements compared to the technical specifications that go with IT implementation that are often ready, off-the-shelf, or packaged. Without understanding and appreciating the larger set of components to an effective IT in TF, its impact may be more limited and governments unable to capture its optimal benefits relative to costs. The purpose of this chapter is to concretely define the context of IT in TF and delineate its environment. The argument is that the importance of IT’s context can not be overlooked and may even be critical to its successful application to a country’s trading system. Moreover it is not just the identification and delineation of this context but of indicating the possible sequencing of the various elements that compose that context without necessarily exhausting them. The next part discusses the various external forces to IT in TF. An external impetus to IT would come from the practices followed by the international trading system, agreements that countries enter into, and other conventions. The third part examines the internal factors that are essential to the IT environment. These are the ones that are supposed to be country-driven and have to be undertaken within the country. In the fourth part implications for an inclusive IT in TF is derived. The last part of the paper draws some conclusions about how to determine the “IT for TF” readiness of trading systems and how to fit the IT tasks in such a setting.

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