Danial Norjidi
A report titled ‘Digital and Sustainable Trade Facilitation: Global Report 2021’ by the United Nations (UN) regional commissions stated that countries across the globe have made progress on digitalising international trade formalities during the COVID-19 pandemic.
However, stronger efforts are needed to facilitate trade for small and medium-sized enterprises (SMEs) and other groups and sectors with special needs.
A press statement from the UN the Economic and Social Commission for Asia and the Pacific (ESCAP) explained that the report is based on the Fourth UN Global Survey on Digital and Sustainable Trade Facilitation, jointly conducted by ESCAP, the Economic Commission for Africa, the Economic Commission for Europe, the Economic Commission for Latin America and the Caribbean, and the Economic and Social Commission for Western Asia.
It was shared that the Survey covers the trade facilitation measures in the World Trade Organization (WTO) Trade Facilitation Agreement as well as digital trade facilitation measures associated with the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific (CPTA), a UN treaty that entered into force in
February 2021.
“Based on the 2021 Survey covering 144 countries, the report shows that the global average implementation rate of general and digital trade facilitation measures stands at 65 per cent. It also notes that despite the severe impact of COVID-19 on international trade, trade facilitation has made significant progress over the past two years. The overall implementation rate of measures increased by more than five percentage points between 2019 and 2021,” the statement added.
UN Under-Secretary-General and Executive Secretary of ESCAP Armida Salsiah Alisjahbana said, “Countries should continue and sustain efforts to strengthen cooperation to adapt to the increasingly digital global economy while leaving no one behind.”
“I encourage all leaders to take advantage of all available global and regional mechanisms to make progress, such as the WTO Trade Facilitation Agreement as well as the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific, which is an enabling and forward-looking UN treaty that entered into force last year,” she added.
Meanwhile, according to the report, in general, WTO TFA-related measures are relatively well-implemented globally. In addition, the COVID-19 pandemic has contributed to the acceleration of digital transformation, with the implementation of ‘Paperless Trade’ standing at 64 per cent. However, it also notes that the implementation level of ‘Cross-Border Paperless Trade’ is substantially low at 38 per cent, with bilateral and subregional paperless trade systems remaining either mostly partial or on a pilot basis.
“Nonetheless, progress in the implementation of ‘Paperless Trade’ and ‘Cross-Border Paperless Trade’ measures is remarkable, with increases of 6.3 and 5.4 percentage points over the past two years, respectively – the highest improvement in these areas since the introduction of the survey in 2015.”
The report also highlighted that international trade is an engine for economic growth and poverty reduction, and that sustainable trade facilitation is one indispensable dimension of trade facilitation.
However, while ‘Agricultural Trade Facilitation’ measures have been comparatively well-implemented, the implementation of trade facilitation measures aimed at SMEs and women in business face big challenges, with average implementation rates of 41 per cent and 31 per cent, respectively.
“Given their importance in achieving sustainable and inclusive development, particularly in times of crisis, trade facilitation strategies should be designed in a more holistic and inclusive manner,” the report said.
The COVID-19 pandemic has revealed many weaknesses in the trading system. “The survey results show that most countries have implemented short-term crisis measures.
However, the overall implementation level of measures in the ‘Trade Facilitation in Times of Crisis’ section stands at only 41 per cent, essentially because many countries still lack long-term trade facilitation plans to enhance preparedness for future crises.
“Continued and sustained efforts should be made to further enhance cooperation, make trade information transparent, and strengthen the capacity of countries to contribute to recovery and prepare to adequately safeguard against future crises.”
The report also states that, moving forward, “trade facilitation implementation may be seen as a step-by-step process, based on the groups of measures included in the survey – enhancing the institutional arrangement; establishing transparency; implementing efficient trade formalities; and the development of paperless trade systems. This is followed by enabling trade data and documents within these systems, including national Single Windows, to be safely and securely used and reused by authorised stakeholders along the international supply chain”.
The report highlights that countries need to work together to develop and implement the legal and technical protocols required for the seamless exchange of regulatory and commercial data as well as documentation within and between countries.
“In this regard, regional and subregional initiatives such as the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific, the expansion of the ASEAN Single Window Agreement, and the African Continental Free Trade Area (AfCFTA) Agreement could support countries in gradually moving to less paper and then to paperless and cross-border paperless trade by providing a dedicated, inclusive and capacity-building intergovernmental platform.”
In addition, the report finds that digital trade facilitation measures serve as a great catalyst for trade cost reduction: “Empirical evidence shows that full digital trade facilitation implementation beyond the WTO TFA commitments could cut the average trade cost by more than 13 per cent, 6.7 percentage points more than that could be expected from meeting requirements of the WTO TFA.”
