Trade and trade facilitation in Asian landlocked developing countries : An update (ESCAP Trade Insights: Issue No. 25)

Trade and trade facilitation in Asian landlocked developing countries : An update (ESCAP Trade Insights: Issue No. 25)

Date: 
Friday, July 12, 2019
Type: 
Public information and advocacy materials
Abstract

• As a group, Asian landlocked developing countries (LLDCs) have returned to registering a trade surplus in 2018, driven by strong export spurt of 45% while import increased by 23.8%. This followed a reduction in their trade deficit achieved in 2017 when an export value rise of 19.6% also outpaced rise in imports (7.1%). This 2-year increase in exports of LLDCs was driven by increase in prices of fuel exports.
• This improvement in trade balance might be short-lived as low export diversification remains an issue for these countries. For most LLDCs, exports are limited to a small number of products, averaging 285 in 2017 as compared to the average of 873 for developing countries of Asia and the Pacific. In terms of export destinations, LLDCs on average supplied their exports to 46 markets in 2017, a slight fall from 50 markets reached in 2012- this is a slightly better result than noted for all developing Asia-Pacific economies which on average registered a decrease from 70 to 57 during the same period.
• Intraregional trade by LLDCs with other Asia-Pacific economies has increased in importance rapidly after the 2009 global economic crisis, but is mainly driven by trade with China. The European Union remains the most important export market (37%), followed by China (26%) and Russian Federation (8.2%). Intra-regionally, in addition to China and Russian Federation, important export markets for LLDCs are India (3.6%), Thailand (3.1%) and Turkey (4.1%).
• LLDCs persistently face higher than average trade costs for Asia-Pacific economies when trading with East and North-East Asia (ENEA) and South-East Asia (SEA). This is particularly concerning for trade expansion in LLDCs as ENEA and SEA are seen as the most dynamic economic hubs of the Asia-Pacific region.
• Of the 8 WTO members among LLDCs, all but one have already ratified the WTO Trade Facilitation Agreement (TFA). Armenia and Azerbaijan have also signed and acceded to the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific, respectively. While good progress has been made on implementation of TFA, there is a need to accelerate implementation of single window facilities and related paperless trade measures.
• As of April 2019, there are 63 signed Preferential Trade Agreements (PTAs) engaging LLDCs in the Asia-Pacific region. The average share of exports and imports to PTA partners were 48.8% and 59%, of their total exports and imports, respectively, during 2017, similar to the corresponding average shares for Asia-Pacific of 43.7% for exports and 58.1% for imports. Still, LLDCs may have a higher dependence on PTAs for their exports than the average of Asia-Pacific economies.

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Trade Insights LLDC - 19.08.08Download