UN and EIF launch interactive guide on cross-border paperless trade

 Cross-border paperless trade has great potential to not only grow trade competitiveness but also to address new challenges associated with e-commerce and the digital economy. The United Nations (UN) Economic and Social Commission for Asia and the Pacific (ESCAP), in collaboration with the United Nations Commission on International Trade Law (UNCITRAL) and the Enhanced Integrated Framework (EIF), today launched an interactive guide to support readiness assessments on cross-border paperless trade.

The Online Readiness Assessment Guide for Cross-border Paperless Trade is designed to support countries in the region to conduct self-assessments of legal and technical readiness on cross-border paperless trade, according to a press note issued by the UNESCAP. “With the new guide, countries have at their disposal, comprehensive guides on how to conduct readiness assessments, without the need for intensive physical travelling of experts,” it reads, adding that they will also be able to interact virtually with experts for further guidance on conducting readiness assessment on a request basis.

“The guide being launched today is expected to support member states in conducting self-assessments of their legal and technical readiness for cross-border paperless trade, as a first step towards developing a concrete action plan for implementation,” UN under-secretary-general and executive secretary of ESCAP Armida Salsiah Alisjahbana said at the launch.”

The Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific, that the guide is supporting the implementation of, is designed so that countries at all levels of development and digitalisation can participate, leaving no one behind, she said, urging all member states to complete ratification as soon as possible.

“The Online Readiness Assessment Guide for Cross-border Paperless Trade is an important diagnostic tool to identify opportunities for adopting laws and regulations that enable paperless trade,” UNCITRAL secretary Anna Joubin-Bret said, adding that UNCITRAL texts are a core component of that legal environment. “The importance of taking prompt action in this area has recently been highlighted by the discussions on how to mitigate the economic effects of the Covid-19 pandemic.”

“We are pleased to have cooperated with ESCAP and EIF in preparing this Online Guide and look forward to work with all concerned partners to support States in this critical endeavor,” she shared.

“The potential benefits from digitalization of trade processes are substantial,” executive director of the Executive Secretariat for the EIF Dr Ratnakar Adhikari said.

“The online interactive guide on cross-border paperless trade will be instrumental in supporting countries to assess their technical and legal gaps in electronic exchange of trade data and documents with other trading partners,” he said, adding that they look forward to working with the partners, including ESCAP, to support least developed countries in the region to strengthen their institutional capacity and harmonise data standards towards the vision of an Asia-Pacific paperless trading environment.

Readiness assessments on cross-border paperless trade support implementation of the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific, which will soon enter into force on February 20, 2021. Five countries – Azerbaijan, Philippines, Islamic Republic of Iran, Bangladesh and China - have thus far ratified or acceded to this UN treaty. In addition, Armenia and Cambodia have signed in 2017, with several more in the process of completing their domestic processes for accession.

The treaty, with its common set of general principles and a dedicated intergovernmental platform, will support countries in building on the bilateral and subregional digital trade solutions they have already developed to achieve greater, region-wide paperless trade. By enabling exchange and legal recognition of trade data and documents, it could reduce trade costs by 25 per cent across the Asia-Pacific region and support more seamless and resilient trade.

Moreover, the policy responses to the Covid-19 pandemic are having a significant impact on the cost of trading goods across borders. Despite measures taken by many countries to keep goods moving across borders, ESCAP research reveals that international trade costs faced by importers and exporters in the region are expected to rise by 7 per cent on average this year, with some facing increases in costs exceeding 20 per cent.

The new guide is relevant to all countries globally, as it can support the implementation of not only the treaty but also the full digital implementation of the World Trade Organisation (WTO) Trade Facilitation Agreement (TFA).

The Online Readiness Assessment Guide resulted from strong partnerships and continuous efforts in the Asia-Pacific region and beyond. It is based on legal and technical readiness assessment checklists developed by the Interim Intergovernmental Steering Group on Cross-border Paperless Trade Facilitation at ESCAP and its Legal and Technical Working Groups, with contributions from the United Nations Network of Experts for Paperless Trade and Transport in Asia and the Pacific (UNNExT). It benefited from the legal expertise on e-commerce of the UNCITRAL, as well as support from the EIF under a joint project on facilitating cross-border trade in LDCs for sustainable development. It also incorporates lessons learned from other ESCAP trade facilitation projects funded by China, the Russian Federation as well as the Republic of Korea.

UN forum spotlights digital trade facilitation measures to boost sustainable progress in Asia-Pacific

The 9th Asia-Pacific Trade Facilitation Forum (APTFF) closed in New Delhi, India today with a strong focus on how digital and sustainable trade facilitation measures and practices can bring prosperity for the region.
Organised by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the Asian Development Bank (ADB), in collaboration with the Ministry of Commerce, India and Confederation of Indian Industry, the Forum discussed results of a new Global Survey on the progress made by countries in implementing trade facilitation measures and how to address remaining challenges in this area.
Developed economies aside, the 2019 UN Survey results confirm leadership of several Asian developing countries in digital trade facilitation implementation, notably Republic of Korea and China in East Asia; Singapore, Malaysia and Thailand in South East Asia; Azerbaijan and the Russian Federation in North and Central Asia; and India in South Asia. All 46 Asia-Pacific countries in the Survey made significant progress in making trade easier and more transparent over the past two years, with countries in North and Central Asia, in particular Kazakhstan, making most progress. Cambodia was the best performing among the least developed country (LDC) included in the Survey. Pacific Small Island Developing States are lagging behind as they face particularly difficult implementation constraints.
Over 270 participants from more than 30 countries at the biennial Forum shared experiences and perspectives on different aspects of trade facilitation for sustainable development, including trade finance, cross-border ecommerce, paperless trade and innovative applications of emerging technologies.
“Amidst global trade tensions, regional cooperation to cut red tape and automate trade procedures is more important than ever,” said UN under-secretary general and executive secretary of ESCAP Armida Salsiah Alisjahbana in her opening remarks. “Making trade easier and faster at lower costs by expanding cross-border trade digitalization and the simplification of international trade procedures, will help all firms in the Asia-Pacific region, particularly Small and Medium Enterprises (SMEs),” she added.
At the opening, India’s Minister of Commerce and Industry and Railways Piyush Goyal highlighted that India is working proactively to introduce a plethora of reforms including digitisation of trade procedures as well as ensuring improvements in the trading environment with reduced turnaround time and transaction costs.
The joint Asia-Pacific Trade Facilitation Report 2019 launched by ESCAP and ADB at the Forum noted that aiming for full digital implementation of the WTO Trade Facilitation Agreement (TFA) and enabling seamless electronic exchange of trade data across-border could cut transaction costs for the region by nearly 17 per cent. To accelerate progress in this area, all countries were encouraged to complete their accession to the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific.
The ESCAP-ADB report also highlighted the need to strengthen linkages between trade facilitation and trade finance, with financial technologies such as blockchain and artificial intelligence to be used to enhance the efficiency and availability of trade finance, especially for SMEs in the region.
“There is an enormous untapped potential in the rapidly evolving digital technologies,” ADB vice-president for Knowledge Management and Sustainable Development Bambang Susantono said, adding that emerging new technologies can help address long-standing issues of high transaction and processing costs, while mitigating the huge trade finance gap.
Going forward, the Forum noted the importance of better addressing the needs of SMEs and other more vulnerable groups such as women and those working in the agricultural sector, noting that only very few countries in the region have customized trade facilitation measures to support these groups so far.
Three initiatives were awarded APTFF Trade Facilitation Innovation Awards this year. The International Plant Protection Convention was awarded for its work on the Generic ePhyto National System (GeNS), PSA International Ltd and Global eTrade Services (GeTS) for enhancing digital connectivity for China-ASEAN trade, and Tuticorin CFS Association for its CoDEx: Container Digital Exchange.
ESCAP and IBM also signed an MoU on the sidelines of the Forum to conduct studies on how frontier technologies can be harnessed to make trade more sustainable and inclusive. This includes collaboration on TINA, a new online decision-support tool for trade negotiators from developing countries.

WTO’s Trade Facilitation Agreement enters into force

A major milestone for the global trading system has been reached today, when the first multilateral deal concluded in the 21 year history of the World Trade Organisation (WTO) entered into force. In receiving four more ratifications for the Trade Facilitation Agreement (TFA), the WTO has obtained the two-thirds acceptance of the agreement from its 164 members needed to bring the TFA into force.
Rwanda, Oman, Chad and Jordan submitted their instruments of acceptance to WTO director general Roberto Azevêdo, bringing the total number of ratifications over the required threshold of 110. The entry into force of this agreement, which seeks to expedite the movement, release and clearance of goods across borders, launches a new phase for trade facilitation reforms all over the world and creates a significant boost for commerce and the multilateral trading system as a whole.
Full implementation of the TFA is forecast to slash members' trade costs by an average of 14.3 per cent, with developing countries having the most to gain, according to a 2015 study carried out by WTO economists. The TFA is also likely to reduce the time needed to import goods by over a day and a half and to export goods by almost two days, representing a reduction of 47 per cent and 91 per cent respectively over the current average.
Implementing the TFA is also expected to help new firms export for the first time. Moreover, once the TFA is fully implemented, developing countries are predicted to increase the number of new products exported by as much as 20 per cent, with least developed countries (LDCs) likely to see an increase of up to 35 per cent, according to the WTO study.
DG Azevêdo welcomed the TFA's entry into force, noting that the Agreement represents a landmark for trade reform. "This is fantastic news for at least two reasons," he said, "First, it shows members' commitment to the multilateral trading system and that they are following through on the promises made in Bali. Second, it means we can now start implementing the Agreement, helping to cut trade costs around the world."
It also means we can kick start technical assistance work to help poorer countries with implementation, he said, adding that it would boost global trade by up to $1 trillion each year, with the biggest gains being felt in the poorest countries. "The impact will be bigger than the elimination of all existing tariffs around the world."
But, he said, this is not the end of the road. The real work is just beginning and it is the biggest reform of global trade in a generation, according to him. "It can make a big difference for growth and development around the world. Now, working together, we have the responsibility to implement the agreement to make those benefits a reality.”
The agreement is unique in that it allows developing and LDCs to set their own timetables for implementing the TFA depending on their capacities to do so. A Trade Facilitation Agreement Facility (TFAF) was created at the request of developing and least-developed countries to help ensure they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members.
Developed countries have committed to immediately implement the agreement, which sets out a broad series of trade facilitation reforms.
Spread out over 12 articles, the TFA prescribes many measures to improve transparency and predictability of trading across borders and to create a less discriminatory business environment. The TFA's provisions include improvements to the availability and publication of information about cross-border procedures and practices, improved appeal rights for traders, reduced fees and formalities connected with the import/export of goods, faster clearance procedures and enhanced conditions for freedom of transit for goods. The agreement also contains measures for effective cooperation between customs and other authorities on trade facilitation and customs compliance issues.
Developing countries, in comparison, will immediately apply only the TFA provisions they have designated as 'Category A' commitments. For the other provisions of the agreement, they must indicate when these will be implemented and what capacity building support is needed to help them implement these provisions, known as Category B and C commitments. These can be implemented at a later date with least-developed countries given more time to notify these commitments. So far, notifications of Category A commitments have already been provided by 90 WTO members.
As of today,  WTO members including Nepal, Hong Kong China, Singapore, the US, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union – on behalf of its 28 member states – the  the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei Darussalam, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the UAE, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Afghanistan, Senegal, Uruguay, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica, Mongolia, Gabon, the Kyrgyz Republic, Canada, Ghana, Mozambique, Saint Vincent & the Grenadines, Nigeria, Rwanda, Oman, Chad and Jordan have accepted the TFA.
The acceptance process involves WTO members ratifying a Protocol of Amendment to insert the TFA into Annex 1A of the WTO Agreement. Members who have not done this are still required to do so.

Nepal presents TFA instrument to WTO

Nepal has presented the instrument of acceptance of the Trade Facilitation Agreement (TFA) to the World Trade Organisation (WTO) in Geneva after the country’s Parliament ratified it last week.
Nepal’s Ambassador and Permanent Representative to the United Nations, Deepak Dhital met the WTO director-general Roberto Azevêdo today to submit the documents, according to Nepal’s Permanent Mission in Geneva.
Nepal is the 108th WTO member and the 14th least developed country (LDC) to ratify the agreement. It would come into force after two more ratifications from WTO members to meet the mandatory acceptance from the two-thirds of WTO membership.
Concluded at the WTO’s 2013 Bali Ministerial Conference, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues, according to a WTO media release. The TFA further contains provisions for technical assistance and capacity building in this area.
Full implementation of the TFA would reduce members’ trade costs by an average of 14.3 per cent, with developing countries having the most to gain, according to a study carried out by WTO economists.
The TFA also has the ability to reduce the time to import goods by over a-day-and-a-half while also reducing time to export by almost two days, representing a reduction of 47 per cent and 91 per cent respectively over the current average. The TFA also has the potential to increase global merchandise exports by up to $1 trillion.
Prior to Nepal, Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei Darussalam, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Afghanistan, Senegal, Uruguay, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica, Mongolia, Gabon, the Kyrgyz Republic, Canada, Ghana, Mozambique, Saint Vincent & the Grenadines and Nigeria have accepted the TFA, the WTO media release added.

'Nepal needs to boost competitiveness of its exportable items'

The US has asked Nepal to identify its needs for boosting competitiveness of exportable items so that Nepali products could stay competitive even after the expiry of trade preference programme.
"We will be taking Nepal government's input on what type of technical assistance it needs to stay competitive for longer time, even after the expiry of the trade preference programme by the end of 2025," deputy assistant US Trade Representative (USTR) for India and Nepal Dawn M Shackleford said.
The Nepal programme is authorised for ten years and is designed to help Nepal's economic recovery.
In addition to the duty-free tariff benefits from the trade preference programme, there is also a trade capacity building programme outlined in the legislation, focused on helping Nepal implement the World Trade Organisation's (WTO) Trade Facilitation Agreement (TFA), she added. "Thus, the US is ready to assist Nepal in trade facilitation under its technical assistance (TA)," Shackleford said without elaborating how much the assistance is worth.
Referring to her discussions with the Nepali authorities and private sector, she said that Nepal can take maximum advantage from the Trade Facilitation and Trade Enforcement Act. "Especially handicrafts can take advantage from the trade preference program," she added.
With a view to facilitating economic growth through trade, the US is establishing a new stand-alone trade preference program for Nepal. On February 24, US President Obama signed the Trade Facilitation and Trade Enforcement Act of 2015. The Act allowed the President to authorise special tariff preferences for Nepal to help support the country's economic recovery following the devastating earthquakes of 2015.
Under the Act, the US President will have the authority to grant duty-free tariff benefits for several products not currently eligible for benefits under existing trade agreements, including certain kinds of carpets, headgear, shawls and scarves, handbag, and suitcases. The exports of Nepali goods covered by the Act totaled $8 million in 2015.
However, she said that for the new preference program to go into effect, certain administrative steps need to be completed in the US. "First, the US President must certify that Nepal meets the country criteria and eligibility requirements of the programme which are the same as those for countries that participate in the GSP Programme and the African Growth and Opportunity Act," Shackleford, who is currently in Nepal to finalise the date for second TIFA meeting, said, adding that it might take few months. "In the first phase, the US looks at status of rule of law, anti corruption measures and human rights violation, and in the second the US administration is also required to request a review by the US International Trade Commission of the products covered by the preference programme to ensure that an increase in imports of these products into the US market will not negatively affect the US economy," she said, adding that these statutorily-required reviews will take several months to complete, but the administration is making efforts to complete the processes as soon as possible.
In 2015, total trade between Nepal and the US was worth $123 million. During the year, Nepal exported goods worth $87 million to the US. Of the exports, Nepal enjoyed access to duty-free treatment for eligible products under the Generalised System of Preferences (GSP) of approximately $5.8 million.

NEPAL NEEDS TO PUBLICISE REFORMS
Shackleford also suggested Nepal to publicise its economic reform efforts to attract foreign investments. "There are investment opportunities in Nepal, but the investors should be made aware of the opportunities it offer," she said, adding that foreign investors should know what reforms have Nepal made to ease doing business in Nepal. "Based on the new Trade Policy and comparative advantage in growing ICT, tourism and service sector, Nepal should exploit its opportunity," she added.

US President Obama signs Nepal trade preferences bill, export not easy task

Nepali readymade garment has officially received duty-free facility in the US market as the US president Barack Obama yesterday signed a legislation.
The bill, which was endorsed by the US Senate in the second week of December, paves the way for some 66 types of Nepali exports, including manufactures of apparels, certain carpets, headgear, shawls, scarves, and travel goods, to enjoy duty-free market access in the US. According to a statement of the US embassy in Kathmandu, the legislation authorising special trade preferences for Nepal grants duty-free tariff benefits for up to 66 types of Nepali items.
Now that the bill has received the president’s seal, it is reported that a team of the US International Trade Commission (ITC) will visit Nepal by mid-March to review the status of infrastructure and capacity of the country to utilise preferences extended by the world’s largest economy. ITC is an independent agency of the US that provides trade expertise to both the legislative and executive branches.
The Nepal programme is authorised for 10 years and designed to help Nepal's economy recover from the effects of the earthquakes that struck the country in 2015, according to the statement. After the new law comes into effect, Nepal will be able to enjoy duty-free facility on export of garments till December 9, 2025.
The programme grants duty-free tariff benefits for Nepali exports not currently eligible for benefits under the General System of Preferences (GSP), the largest and oldest US trade preference programme that provides duty-free facility in the US market.
The Nepal Trade Preferences Legislation also outlines a trade capacity building programme, focused on helping Nepal implement the World Trade Organisation's Trade Facilitation Agreement (TFA).
"This is a tremendous opportunity for Nepali business to expand their imports to US markets," US ambassador to Nepal Alaina B Teplitz was quoted in the embassy statement, adding that the US is looking forward to learning more about Nepal's plans for implementing the TFA and how the US government could contribute to this goal.
Howwever, certain administrative steps need to be completed in the US for the new trade preference programme to go into effect, the statement further added.
First, the president must certify that Nepal meets the eligibility requirements of the programme, which are the same as those for African Growth and Opportunity Act countries.
Secondly, the US is also required to request a review by the US ITC of the products covered by the preference programme to ensure that an increase in imports of these products into the US market will not negatively affect the US economy. These statutorily-required reviews will take several months to complete, according to the embassy.
Meanwhile, Nepali garment manufacturers have welcomed the US government move, saying that it will provide an opportunity to revive the industry. But they have asked the government to update Nepal's labour laws, provide uninterrupted power, and solve transit problems while exporting through India, along with facilitating soft loan to exporters to benefit from the US move.
According to president of Garment Association of Nepal (GAN) Chandi Prasad Aryal, the US market used to make up 85 per cent of the total exports of garments from Nepal. "The move could benefit Nepal, if the government took it seriously and provided necessary facilities to boost exports," he said.
The garment industry has today been squeezed down to only Rs 5 billion," he said, adding that it used to export Rs 13 billion worth garments right until 2001. In the fiscal year 2000-01, Nepal’s garment exports reached an all-time high of Rs 13.12 billion, with exports to the US accounting for 86.49 per cent. But the exports plunged after the US scrapped the quota system in 2005 as per the agreement on Textiles and Clothing (ATC) of the WTO. The garment exports slumped to Rs 5.28 billion in 2014-15 and number of garment industries came down to around 50 from over 400 in 2000-01.
After the expiry of Multi Fibre Agreement (MFA), popularly known as quota phase out, in January 2005, the US government has been imposing around 17 per cent tariff on import of cotton apparels.
Aryal, however, said that the authorisation of Nepal Programme has addressed the demand of Nepali garment manufacturers, who had been lobbying for duty-free entry for Nepali products for over a decade. After the US move, the Nepali garments – that lost its ground after 2002 – will now be competitive in the US market.
According to Aryal, GAN has started homework to improve production capacity of domestic garment industry. But government facilitation is a key, he added.
Though, trade experts claim that only 40 per cent of the Nepali garments being exported to the US could be eligible for receiving the GSP, Nepali ready-made garment industry could reclaim its lost glory provided the government supports the industry wholeheartedly.