Opening Remarks at High-level Dialogue on Enhancing Regional Trade through Effective Participation in the Digital Economy & Signing Ceremony of the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific
Delivered at High-level Dialogue on Enhancing Regional Trade through Effective Participation in the Digital Economy & Signing Ceremony of the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific in Bangkok, Thailand
H.E. Mr. Tofail Ahmed, M.P. and Commerce Minister, Bangladesh;
H.E. Mr. Pan Sorasak, Minister of Commerce, from the Royal Government of Cambodia;
H.E. Mr. Kiatchai Sophastienphong, Vice Minister, Ministry of Finance, Government of Thailand
Mr. Lv Jian, designated Ambassador Extraordinary and Plenipotentiary of the People's Republic of China to the Kingdom of Thailand,
This Signing Ceremony of the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific is a proud moment for ESCAP membership. Your strong determination to steer negotiations and to effectively find alternate mechanisms to reduce the time and cost of trade transactions will go a long way to promote the region’s sustainable growth and trade.
Without the financial contributions of the Governments of the Republic of Korea and the Russian Federation, which have supported ESCAP’s analytical, normative and policy work on cross-border paperless trade in our region, we would not be where we are. And your collective strong commitment has steered these complex negotiations to this positive outcome. We are looking forward to seeing you again to sign the Agreement in September during the Treaty event at the UN General Assembly in New York.
Alongside this signing ceremony, I am pleased we are convening a High-Level Dialogue. The 2015 Addis Ababa Action Plan has placed trade and investment flows critical for supporting 2030 Sustainable Development Agenda. Not only will there be a drastic change in the way we do business and trade, but the digital economy has potential to offer many new trade opportunities. But there are several challenges to be overcome to realize new opportunities and reap their benefits. The Framework Agreement should enable and precisely equip countries in Asia and the Pacific to cope with these challenges through digital technology itself. Cross-border paper-based trade transactions place immense burdens on the trading community. On average, cross border trade transactions entail exchanges among 27 to 30 different parties involving 40 documents, 200 data elements - 30 of which are repeated at least 30 times - and the re-keying of 60 to 70 per cent of data at least once.1 To give you just one example, Indian exporters to Bangladesh must obtain up to 330 signatures on 17 documents at multiple stages to sell their products into a neighboring market. 2
Switching from paper to electronic solutions therefore offers countries an immense opportunity to simplify trade processes, minimize documentary requirements, promote transparency and increase the security of trade operations. Full implementation of cross-border paperless trade would also significantly increase international trade revenues in our region. Regional export gains could potentially be as high as $250 billion. Beyond this, paperless trade transactions would enable governments to reduce administrative costs and minimize revenue lost to fraud and non-compliance.
Paperless trade services could unlock significant cost savings for the private sector. For instance, in the Republic of Korea businesses could save up to $1 billion by using the automated information transaction system uTradeHub. These include savings on transaction costs by using e-documents, increasing productivity by automating administrative work and improving management processes, and making the storage and retrieval of information more efficient by using digital technology. Beyond such efficiency savings, paperless trade solutions offer businesses an opportunity to increase the efficiency and transparency of their supply chains by eliminating operational costs related to processing paper and improving the flow of information between trading partners.
Despite the potential gains that can be achieved through implementing cross-border paperless trade transactions, most systems have only focused on facilitating information exchange between stakeholders domestically rather than across borders. As a result, electronic trade data and documents generated domestically face both technical and legal barriers in flowing across borders. These barriers have reinforced the use of conventional paper-based trade practices, and thereby reduced the overall benefits and return on investment in paperless trade systems. The Framework Agreement has the potential to support member States in developing effective instruments to overcome these legal and technical barriers and boost cross-border paperless trade in our region.
The Framework Agreement will support ESCAP member States in realizing the benefits of digital trade in a number of ways.
First, the Agreement provides an instrument for regional harmonization and coordination. Open to all 53 ESCAP member States on ratification, mutual recognition and operationalization, it can minimize the need for numerous bilateral and sub-regional cross-border paperless trade initiatives. This will lead to a greater region-wide harmonization in cross border paperless data exchange, resulting in cost and time savings.
Second, with a strong capacity-building mechanism, the Framework Agreement offers opportunities to developing countries to close the e-readiness gap and implement cross-border electronic data exchange.
Third, it is flexible in its provisions and allows parties with different implementation capacity levels to take action based on their initial respective e-readiness levels.
Fourth, it facilitates the smooth transition of countries into the electronic data exchange environment. With pilot projects, parties can take advantage of the opportunity to iterate and adjust their systems before engaging in actual cross-border trade data exchange.
Finally, the Framework Agreement will support ESCAP member States in meeting the requirements of their international and regional commitments effectively by offering digital implementation of trade facilitation measures, including the WTO Trade Facilitation Agreement and other bilateral and sub-regional agreements.
To conclude, I would like to recognize the leading role that ESCAP member States have played in developing the Framework Agreement before you today. It is my sincere hope that governments in our region commit to the Framework Agreement as soon as possible to allow us all to reap the benefits of two key means of implementation for the 2030 Agenda, and an important pillar for regional economic integration. ESCAP stands ready to continue to assist you in these endeavours and in becoming party to the Agreement.
I thank you.
1APEC (1996), APEC means business: building prosperity for our community, Facilitating cross-border flows: the true measure of liberalization, Report to the Economic Leaders, p.22.
2De, P. and Ghosh, B. (2008), Reassessing transaction costs of trade at the India – Bangladesh border, Economic and Political Weekly, vol. 43, No. 29, pp. 69-79.