Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 i ii Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 Copyright © United Nations 2021 All rights reserved The report is available at: https://www.unescap.org/kp/2022/untf-survey-2021-global Disclaimers: The designation employed and the presentation of the material in the Report do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The United Nations bears no responsibility for the availability or functionality of URLs. Opinion, figures and estimates set forth in this publication are the responsibility of the authors and should not necessarily be considered as reflecting the views or carrying the endorsement of the United Nations. Any errors are the responsibility of the authors. Mention of firm names and commercial products does not imply the endorsement of the United Nations. The report has been issued without formal editing. Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 i Digital and Sustainable Trade Facilitation: Global Report 2021 Based on the United Nations Global Survey on Digital and Sustainable Trade Facilitation ii Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 FOREWORD The COVID-19 pandemic has had a devastating impact on people and economies across the globe. It has also highlighted the importance of trade facilitation and the need to streamline trade procedures. Given the essential role of international trade and supply chains play in accessing essential supplies, many countries have renewed their efforts to simplify and digitalize trade, as suggested by the findings of this report. This report presents the results of the fourth UN Global Survey on Digital and Sustainable Trade Facilitation. It brings together information from countries worldwide on the implementation of a wide range of trade facilitation measures, going beyond the set of measures included in the WTO Trade Facilitation Agreement (TFA). The report aims at enabling countries and development partners to take a forward-looking approach to trade facilitation, better understand and monitor progress, support evidence-based public policies, share best practices, and identify emerging capacity-building and technical assistance needs. The fourth Global Survey builds upon the earlier editions and an expanded collection of measures on trade finance facilitation and trade facilitation in times of crisis. The latter category was incorporated to gather information on the implementation of short-term measures in response to the COVID-19 pandemic as well as long-term measures in preparation for future crises and pandemics. The crucial role of trade digitalization has been emphasized not only for increasing regulatory compliance and reducing illicit financial flows, but also as an effective means to mitigate trade disruptions during the COVID-19 pandemic. The fourth Global Survey also pays special attention to sectors and groups with special needs, such as the agricultural sector, small and medium-sized enterprises (SMEs) and women traders, as international trade is one of the key means of implementing the Sustainable Development Goals (SDGs). As all economies now strive to recover from the COVID-19 crisis, still more needs to be done to make trade easier for all. We hope that this report and the associated interactive database at untfsurvey.org will prove helpful in making trade simpler, cheaper, more resilient and sustainable through the application of technology and innovation to international trade procedures. Mr. Stephen, Ms. Elisabeth Tuerk, Mr. Mario Castillo, Ms. Rupa Chanda, Mr. Mohamed Karingi, Director, Director, Economic Director, Director, El Moctar Regional Cooperation and International Trade, El Hacene, Integration and Trade Division, Trade and Investment Leader, Shared Trade Division, Integration and Innovation Economic ECE Division, Division, Prosperity Cluster, ECA ECLAC ESCAP ESCWA Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 iii ACKNOWLEDGEMENTS The fourth UN Global Survey was jointly conducted by five United Nations Regional Commissions (UNRCs) for Africa (ECA), Europe (ECE), Asia and the Pacific (ESCAP), Latin America and the Caribbean (ECLAC) and West Asia (ESCWA). The initiative was led and coordinated by ESCAP. Staff members from the UNRCs who directly contributed to the global report include: Nadia Hasham and Mie Vedel from ECA; Khan Salehin and Charles Frei from ECE; Jiangyuan Fu, Chorthip Utoktham, Soo Hyun Kim and Yann Duval from ESCAP; Sebastian Herreros from ECLAC; and Souraya Zein and Mohamed Chemingui from ESCWA. The report was prepared by Jiangyuan Fu and Chorthip Utoktham under the guidance of Soo Hyun Kim and the overall supervision of Yann Duval, all from the Trade, Investment and Innovation Division (TIID) of ESCAP. The research assistance provided by Ruixin Xie, Yifan Tan and Linyi Chen in data collection and finalizing the report is appreciated. Anisa Hussein informally edited the earlier version of the report and Tony Oliver informally edited the final draft of the report. Arom Sanguanyuang formatted the report and created the cover design. Support from the following organizations and individuals is gratefully acknowledged: Tadateru Hayashi and Esnerjames P. Fernandez from the Asian Development Bank (ADB); Cuong Ba Tran and Anki Agustrin from the Association of Southeast Asia Nations (ASEAN) Secretariat; Ghulam Samad, Qaisar Abbas and Iskandar Abdullaev from the Central Asia Regional Economic Cooperation (CAREC) Institute; Eurasian Economic Commission (EEC); International Trade Centre (ITC); Richard Brennan and Laisiana Tugaga from Oceania Customs Organization Secretariat (OCO); Organisation for Economic Cooperation and Development (OECD); Poul Hansen, Julian Fraga-Campos and Marianne Dumont from United Nations Conference on Trade and Development (UNCTAD), as well as Sangwon Lim from ESCAP and Neijwa Mohammed Abdu from ECA, contributed to the survey efforts, in particular by facilitating data collection from relevant experts as well as data validation in several countries. The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) – an intergovernmental body serviced by the ECE – and the United Nations Network of Experts for Paperless Trade and Transport in Asia and the Pacific (UNNExT) – a knowledge community supported by ESCAP and ECE – greatly facilitated data collection. Inputs to the expert group meeting on trade facilitation in times of crisis and epidemic in the Asia-Pacific region (virtual, July 2020). In addition, the results from a pilot survey on trade facilitation in times of crisis and pandemic – conducted in 2020 for the Asia-Pacific countries, the results of which were published in a regional report in January 2021 – contributed to the development of the additional measures on trade facilitation in times of crisis. Comments and suggestions received from participants at the Launch of the UN Global Survey on Digital and Sustainable Trade Facilitation 2021 (virtual, July 2021), at which the 2021 survey results were presented, are gratefully acknowledged. The authors are also grateful to the following organizations and individuals for their inputs and suggestions for the development of the 2021 survey: Alexander R. Malaket, formerly from the International Chamber of Commerce (ICC) Banking Commission and Andrew Wilson from the ICC for the trade finance facilitation component; Candice White from the World Economic Forum (WEF); and Alexandre Larouche-Maltais and Sijia Sun from UNCTAD for the women in trade facilitation component. Preparation of the report benefited from the United Nations Development Account projects “Evidence-based trade facilitation measures for economies in transition” and “Transport and trade connectivity in the age of pandemics: Contactless, seamless and collaborative UN solutions”. iv Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 EXECUTIVE SUMMARY Reducing trade costs is essential for enabling economies to effectively participate in regional and global value chains, and for them to continue using trade as an important engine of growth and sustainable development. According to the ESCAP-World Bank Trade Cost Database, trade costs remain high in many regions of the world. The international supply chain disruptions caused by the COVID-19 pandemic and the recent surge in shipping costs have put additional pressure on importers and exporters. Trade facilitation, which is aimed at enhancing efficiency through streamlined and digitalized processes, can help to lower trade costs and increase economic welfare, particularly in developing and emerging economies. Based on the 2021 UN Global Survey on Digital and Sustainable Trade Facilitation, this report reviews the progress of trade facilitation reforms across 144 countries. The analysis is based on 58 trade facilitation measures that are classified into four groups (“General Trade Facilitation”, ”Digital Trade Facilitation”, “Sustainable Trade Facilitation” and “Other Trade Facilitation”) and a further 11 sub-groups covering both binding and non-binding WTO TFA measures, as well as measures beyond the scope of WTO TFA. The global average implementation rate of 31 general and digital trade facilitation measures stands at 64.7%. Despite the grave impact of COVID-19 on global trade, significant progress has been observed in more efficient trade facilitation over the past two years. The overall implementation rate of measures increased by more than 5 percentage points between 2019 and 2021. Implementation still varies greatly around the world, with developed economies achieving the highest level at 81.8%, while the Pacific Islands have the lowest implementation rate (40.1%). Implementation in Sub-Saharan Africa is 49.1%, second to the Pacific Islands. South Asia recorded the most progress, with more than 10 percentage point increase since 2019. Sub-Saharan Africa (6 percentage points), Developed Economies (5.2 percentage points) and Pacific Islands (4.9 percentage points) also made substantial progress, despite the significant challenges and trade disruptions due to the COVID-19 pandemic. 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%. However, the implementation level of ‘Cross-Border Paperless Trade’ is substantially low at 38%, 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. International trade is an engine for economic growth and poverty reduction, and 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% and 31%, 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 COVID-19 pandemic has revealed many weaknesses of 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%, 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. Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 v Moving forward, trade facilitation implementation may be seen as a step-by-step process, based on the groups of measures included in the survey – i.e., 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 authorized stakeholders along the international supply chain (see the following figure). 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 (CPTA), 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. Indeed, 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%, 6.7 percentage points more than that could be expected from meeting requirements of the WTO TFA. Moving up the trade facilitation ladder towards seamless international supply chains Cross-border paperless trade 100 Paperless trade 80 60 Formalities 40 Transparency Institutional 20 arrangement and cooperation 0 Performance area Frontier (full implementation) Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Note: The figure shows global cumulative trade facilitation implementation scores for different regions in the five groups of trade facilitation measures included in the survey. Scores are based on the equally weighted implementation of 31 trade facilitation measures, but the number of measures varies in the five groups. Full implementation of all measures = 100. vi Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 Contents Page FOREWORD ....................................................................................................................................... ii ACKNOWLEDGEMENTS ................................................................................................................... iii EXECUTIVE SUMMARY .................................................................................................................... iv ABBREVIATIONS ............................................................................................................................... x 1. INTRODUCTION ........................................................................................................................ 1 1.1 Background and objectives ............................................................................................... 1 1.2 Survey instrument and methodology ................................................................................ 3 1.3 Utilization of report and data ............................................................................................. 7 2. TRADE FACILITATION IMPLEMENTATION: OVERVIEW ....................................................... 9 2.1 Implementation in countries with special needs ............................................................... 11 2.2 Most and least implemented trade facilitation measures .................................................. 12 2.3 Progress in implementation of trade facilitation measures since 2019 ............................. 14 3. IMPLEMENTATION OF TRADE FACILITATION MEASURES: A CLOSER LOOK .................. 17 3.1 General trade facilitation measures .................................................................................. 17 3.1.1 Transparency ........................................................................................................ 17 3.1.2 Formalities ............................................................................................................ 19 3.1.3 Institutional arrangements and cooperation ......................................................... 20 3.1.4 Transit ................................................................................................................... 21 3.2 Digital trade facilitation ...................................................................................................... 23 3.2.1 Paperless trade .................................................................................................... 23 3.2.2 Cross-border paperless trade ............................................................................... 25 3.3 Sustainable trade facilitation ............................................................................................. 28 3.3.1 Trade facilitation for SMEs ................................................................................... 28 3.3.2 Agricultural trade facilitation ................................................................................. 30 3.3.3 Women in trade facilitation ................................................................................... 32 3.4 Implementation of digital versus sustainable trade facilitation .......................................... 35 3.5 Other trade facilitation ....................................................................................................... 36 3.5.1 Trade finance facilitation ....................................................................................... 36 3.5.2 Trade facilitation in times of crisis ......................................................................... 37 4. CONCLUSION AND THE WAY FORWARD ............................................................................... 41 Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 vii Contents (continued) ANNEXES Annex 1. Definitions of the various stages of implementation ......................................................... 48 Annex 2. Groupings of countries with special needs ....................................................................... 49 Annex 3. Trade facilitation implementation by countries in different groups (%) ............................. 50 Annex 4. Trade facilitation implementation: Full dataset versus limited dataset .............................. 54 Annex 5. Implementation stages of selected WTO TFA-related measures globally ........................ 57 List of Tables Table 1. Intra- and extra-regional comprehensive trade costs (excluding tariff costs) ................... 2 Table 2. Grouping of trade facilitation measures and correspondence with TFA articles ............... 4 Table 3. Most and least implemented measures ............................................................................ 13 Table 4. Changes in trade costs resulting from the implementation of trade facilitation and paperless trade ................................................................................................................. 43 Table 5. Breakdown of countries that participated in the 2019 and 2021 survey ........................... 54 Table 6. Comparison of regional average – full versus limited dataset .......................................... 56 List of Boxes Box 1. A three-step approach to data collection and validation ................................................... 6 Box 2. Good practices in cross-border paperless trade ............................................................... 27 Box 3. Good practices on trade facilitation for SMEs................................................................... 29 Box 4. Good practices on agricultural trade facilitation ................................................................ 32 Box 5. Good practices in women in trade facilitation ................................................................... 34 Box 6. Good practices in trade finance facilitation ....................................................................... 37 Box 7. Good practices in trade facilitation in times of crisis ......................................................... 38 Box 8. Assessing the impact of trade facilitation .......................................................................... 43 viii Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 Contents (continued) List of Figures Figure 1. Average implementation rates of trade facilitation measures around the world ............... 10 Figure 2. Average trade facilitation implementation rates and GDP per capita ............................... 10 Figure 3. Average trade facilitation implementation rates by region and in countries with special needs ................................................................................................................................ 11 Figure 4. Implementation rates of different sub-groups of trade facilitation measures .................... 12 Figure 5. Progress of implementation of trade facilitation measures by various regions, 2019 and 2021 .................................................................................................................................. 14 Figure 6. Progress of global implementation of trade facilitation measures, 2019 and 2021 .......... 15 Figure 7. Progress of implementation of specific group of trade facilitation measures in various regions, 2019 and 2021 .................................................................................................... 16 Figure 8. Global implementation of transparency measures in various regions .............................. 18 Figure 9. State of implementation of transparency measures globally ............................................ 18 Figure 10. Global implementation of formalities measures in various regions ................................... 19 Figure 11. State of implementation of formalities measures globally ................................................. 20 Figure 12. Global implementation of institutional arrangement and cooperation measures in various regions ................................................................................................................. 21 Figure 13. State of implementation of institutional arrangement and cooperation measures globally .............................................................................................................................. 21 Figure 14. Global implementation of transit facilitation measures in various regions ........................ 22 Figure 15. State of implementation of transit facilitation measures globally ...................................... 22 Figure 16. Global implementation of paperless trade measures in various regions .......................... 23 Figure 17. State of implementation of paperless trade measures globally ........................................ 24 Figure 18. Global implementation of cross-border paperless trade measures in various regions ..... 25 Figure 19. State of implementation of Cross-Border Paperless Trade measures globally ................ 26 Figure 20. Global implementation of trade facilitation for SMEs measures in various regions .......... 28 Figure 21. State of implementation of trade facilitation for SMEs measures globally ........................ 30 Figure 22. Global implementation of agricultural trade facilitation measures in various regions ....... 31 Figure 23. State of implementation of agricultural trade facilitation measures globally ..................... 31 Figure 24. Global implementation of women in trade facilitation measuresin various regions .......... 33 Figure 25. State of implementation of women in trade facilitation globally ........................................ 33 Figure 26. Implementation of digital and sustainable trade dimensions of trade facilitation .............. 35 Figure 27. State of implementation of trade finance facilitation measures globally ........................... 36 Figure 28. State of implementation of trade tacilitation in times of crisis measures globally ............. 38 Figure 29. Trade facilitation implementation and trade costs ............................................................ 42 Figure 30. Trade facilitation implementation and logistics performance ............................................ 42 Figure 31. Impact of trade facilitation implementation on trade costs in various regions................... 44 Figure 32. Moving up the trade facilitation ladder towards seamless international supply chains ..... 46 Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 ix Contents (continued) Figure 33. Average implementation rates of trade facilitation measures in developed economies ... 50 Figure 34. Average implementation rates of trade facilitation measures in Latin America and the Caribbean ......................................................................................................................... 50 Figure 35. Average implementation rates of trade facilitation measures in the Middle East and North Africa ....................................................................................................................... 51 Figure 36. Average implementation rates of trade facilitation measures in the Pacific Islands ......... 51 Figure 37. Average implementation rates of trade facilitation measures in South and East Europe, Caucasus and Central Asia .............................................................................................. 52 Figure 38. Average implementation rates of trade facilitation measures in South Asia ..................... 52 Figure 39. Average implementation rates of trade facilitation measures in South-East and East Asia ........................................................................................................................... 53 Figure 40. Average implementation rates of trade facilitation measures in Sub-Saharan Africa ....... 53 Figure 41. Implementation stages of selected WTO TFA-related measures in general trade facilitation and paperless trade globally ............................................................................ 57 Figure 42. Implementation stages of selected WTO TFA-related measures in transit facilitation globally .............................................................................................................................. 58 x Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 Abbreviations AACE The African Alliance for Electronic Commerce ACDD ASEAN Customs Declaration Document ADB Asian Development Bank AEO Authorized Economic Operator AfCFTA African Continental Free Trade Area AMAK Aia Mwaea Ainen Kiribati ASEAN Association of Southeast Asian Nations ASW ASEAN Single Window ASYCUDA Automated System for Customs Data BoE Bill of Entry CPTA Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific CAREC Central Asia Regional Economic Cooperation CBIC Central Board of Indirect Taxes DGTS Directorate-General of Tax Payer Services DGF Directorate-General of Foreign Trade EAC East African Community ECA United Nations Economic Commission for Africa ECE United Nations Economic Commission for Europe ECLAC United Nations Economic Commission for Latin America and the Caribbean ECOWAS Economic Community of West African States BG Banker’s Guarantee ESCAP United Nations Economic and Social Commission for Asia and the Pacific ESCWA United Nations Economic and Social Commission for Western Asia EU European Union ERC Export Registration Certificate GATT General Agreement on Tariffs and Trade ICC International Chamber of Commerce ICT Information and Communications Technology IRC Import Registration Certificate IMF International Monetary Fund ITC International Trade Centre LDC Least Developed Country LLDC Landlocked Developing Country MOU Memorandums of Understanding NCTS National Computerized Transit System NTMs Non-Tariff Measures NSW National Single Window NTFC National Trade Facilitation Committee Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 xi OCO Oceania Customs Organization OECD Organization for Economic Co-operation and Development RSW Regional Single Window SADC South African Development Community SARSO South Asia Regional Standards SARTFP South Asia Regional Trade Facilitation Program SEED System of Electronic Exchange of Data SIDS Small Island Developing States SPS Sanitary and Phytosanitary SMEs small and medium-sized enterprises TFA Trade Facilitation Agreement TIID Trade, Investment and Innovation Division TIDOs Trade Information Desk Offices UCC Union Customs Code UN/CEFACT United Nations Centre for Trade Facilitation and Electronic Business UNCTAD United Nations Conference on Trade and Development UNNExT United Nations Network of Experts for Paperless Trade and Transport for Asia and the Pacific UNRC United Nations Regional Commission VPoA Vienna Programme of Action WCO World Customs Organization WTO World Trade Organization WFP World Food Programme xii Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 Introduction 1 1 Introduction 1.1 Background and objectives Reducing trade costs is essential to enabling economies to effectively participate in global value chains, and to continue using trade as an important engine of growth and sustainable development. According to the latest data from the ESCAP-World Bank International Trade Cost Database, the overall cost of trading goods among the three largest European Union economies is equivalent to a 41.4% average tariff on the value of goods traded (table 1). In contrast, trade costs among the middle-income members of the Association of Southeast Asian Nations (ASEAN), which have actively pursued regional integration through trade and investment over the past decades, still stand at a 76.7% tariff equivalent. Amidst the current COVID-19 pandemic, shipping and air freight costs were pushed up and significant challenges for supply chains globally were posed. The crisis has had an impact on key components of trade costs, particularly those related to travel and transport. In addition, high levels of uncertainty magnify the impact on trade costs. The increasing visibility of traditional trade barriers as well as the surging trade and transport costs pose risks for the recovery of the global economy. While reversion of many of the changes in trade costs is expected once the pandemic is brought under control, some effects may persist.1 1 WTO, 2020, Trade Cost in The Time of Pandemic. Available at https:// www.wto.org/english/tratop_e/covid19_e/trade_costs_report_e.pdf 2 Digital and sustainable trade facilitation: Global Report 2021 Table 1. Intra- and extra-regional comprehensive trade costs (excluding tariff costs) (Unit: %) East South West North Region ASEAN-4 LAC-4 NAF-3 SSA-3 EU-3 Asia-3 Asia-4 Asia-3 America ASEAN-4 76.7 79.4 135.2 151.8 218.6 214.8 181.2 103.8 103.4 (3.9) (6.8) (5.1) (-1.8) (-12.0) (6.7) (11.4) (-3.2) (0.1) East Asia-3 79.4 56.9 125.4 113.2 169.7 166.3 164.2 85.2 78.5 (6.8) (9.8) (1.0) (3.4) (2.4) (1.3) (4.0) (0.3) (3.1) South 135.2 125.4 128.4 196.8 204.5 228.7 168.8 113.7 117.7 Asia-4 (5.1) (1.0) (13.4) (4.5) (8.4) (15.8) (3.9) (-0.5) (0.9) LAC-4 151.8 113.2 196.8 102.8 243.1 309.2 235.7 112.8 92.6 (-1.8) (3.4) (4.5) (6.6) (-1.1) (13.0) (4.9) (-0.6) (-3.4) NAF-3 218.6 169.7 204.5 243.1 168.4 259.8 135.2 140.6 189.3 (-12.0) (2.4) (8.4) (-1.1) (-16.9) (-2.7) (6.0) (8.6) (13.6) SSA-3 214.8 166.3 228.7 309.2 259.8 216.3 223.5 148.1 176.5 (6.7) (1.3) (15.8) (13.0) (-2.7) (16.8) (11.6) (17.4) (6.3) West Asia-3 181.2 164.2 168.8 235.7 135.2 223.5 95.6 152.5 157.1 (11.4) (4.0) (3.9) (4.9) (6.0) (11.6) (22.3) (6.3) (2.9) EU-3 103.8 85.2 113.7 112.8 140.6 148.1 152.5 41.4 76.2 (-3.2) (0.3) (-0.5) (-0.6) (8.6) (17.4) (6.3) (-5.9) (-0.5) North 103.4 78.5 117.7 92.6 189.3 176.5 157.1 76.2 29.6 America (0.1) (3.1) (0.9) (-3.4) (13.6) (6.3) (2.9) (-0.5) (-2.1) Source: ESCAP-World Bank Trade Cost Database, updated July 2021. Available at https://www.unescap.org/resources/escap-world- bank-trade-cost-database Note: Trade costs may be interpreted as tariff equivalents. Percentage changes in trade costs between 2008-2013 and 2014-2019 are in parentheses. ASEAN-4: Indonesia, Malaysia, the Philippines and Thailand; East Asia-3: China, Japan and the Republic of Korea; South Asia-4: Bangladesh, India, Pakistan and Sri Lanka; Latin America-4: Brazil, Chile, Mexico and Uruguay; North Africa-3: Morocco, Egypt and Sudan; Sub-Saharan Africa-3: Nigeria, Kenya and Ghana; West Asia-3: Jordan, Lebanon and Saudi Arabia; North America: Canada and the United States of America; EU-3: Germany, France and the United Kingdom of Great Britain and Northern Ireland. The trade costs associated with non-tariff measures particularly for developing and emerging economies. (NTMs) are estimated to be more than double those It also benefits small- and medium-sized enterprises of tariffs.2 Thus, tackling non-tariff sources of trade (SMEs), for which the costs of trading can be costs becomes the key to further trade cost disproportionately high. The importance of trade reductions. This includes improving transport and facilitation is evidenced by the entry into force of the logistics infrastructure and services as well as WTO Trade Facilitation Agreement and regional simplifying cumbersome regulatory procedures and initiatives such as the Framework Agreement on documentation. Trade facilitation covers the full Facilitation of Cross-border Paperless Trade in Asia spectrum of border procedures, from transparency and the Pacific.3 and simplification of border procedures to the electronic exchange of data about shipments. Trade Under the Joint UNRCs Approach to Trade Facilitation facilitation, including paperless trade, helps to lower and following extensive discussions at the Global overall trade costs and increases economic welfare, Trade Facilitation Forum 2013,4 it was decided that 2 ESCAP, 2019. The Asia-Pacific Trade and Investment Report 2019: Navigating Non-tariff Measures towards Sustainable Development 3 For details, see https://www.unescap.org/kp/cpta 4 The Global Trade Facilitation Forum was organized jointly by all the UNRCs in Bangkok in November 2013. Introduction 3 the regional surveys should be conducted at the Facilitation Measures”, includes many of the WTO global level jointly by all UNRCs. Since 2015, the TFA measures with sub-groups of ‘Transparency’, UNRCs have systematically collected and analysed ‘Formalities’ ‘Institutional Arrangement and information on the implementation of trade facilitation Cooperation’, and ‘Transit Facilitation’. The second measures around the globe. The present report, group, “Digital Trade Facilitation Measures” which is a continuation of this global effort, features includes two sub-groups, ‘Paperless Trade’, and the results of the fourth global survey conducted ‘Cross-Border Paperless Trade’. The third group, in 2021, which covers 144 economies from eight “Sustainable Trade Facilitation Measures”, includes different regions worldwide. three sub-groups, ‘Trade Facilitation for SMEs’, ‘Agricultural Trade Facilitation’ and ‘Women in Trade Following the introduction to the survey instrument Facilitation’. Given the increasing role that trade and methodology, a global overview of the finance plays in facilitating global trade, and by virtue implementation of trade facilitation measures across of the COVID-19 pandemic, in 2021 the UNRCs the developed economies and seven developing introduced a new group, “Other Trade Facilitation”, regions as well as groups of countries with special which includes two sub-groups, ‘Trade Finance needs is provided in Section 2. This is followed by a Facilitation’5 and ‘Trade Facilitation in Times of Crisis’. closer look at the implementation levels of various The ‘Trade Finance Facilitation’ sub-group is added groups of trade facilitation measures in Section 3. with considerations given to the role that trade Finally, Section 4 of this report highlights the key finance plays to facilitate trade flows. In addition, findings and proposes a way forward for advancing COVID-19 has shaken global trade and posed trade facilitation. enormous challenges to the global supply chain. To “build back better”, sustainable and resilient recovery 1.2 Survey instrument and practices are required in order to avoid future methodology systemic vulnerabilities. In this context, immediate emergency responses and long-term action plans for trade facilitation in response to pandemics and The UN Global Survey on Digital and Sustainable crises have been incorporated into the 2021 survey Trade Facilitation 2021 was prepared according to (table 2). the final list of commitments included in the WTO Trade Facilitation Agreement (TFA), supplemented by The overall scope of the survey goes beyond the forward looking measures included in the Framework measures included in the WTO TFA. Most paperless Agreement on Facilitation of Cross-Border Paperless trade measures, particularly cross-border paperless Trade in Asia and the Pacific. It also includes trade, are not specifically featured in the WTO TFA. sustainable trade facilitation measures as well as However, their implementation in many cases would measures on trade facilitation in times of crisis and support better implementation of the TFA and in trade finance facilitation. digital form. Most measures in the “Sustainable Trade Facilitation” and “Other Trade Facilitation” The survey covers 58 trade facilitation measures, groups are also not specifically included in the WTO which are classified into four groups and eleven TFA, except for some of the ‘Agricultural Trade sub-groups. The first group, “General Trade Facilitation’ measures. 5 Trade Finance Facilitation was an optional subgroup in the 2019 survey and three of the UNRCs (ESCAP, ESCWA and ECE) used it for their survey. In 2021, this sub-group was updated in cooperation with the International Chamber of Commerce (ICC) and surveyed across all regions. 4 Digital and sustainable trade facilitation: Global Report 2021 Table 2. Grouping of trade facilitation measures and correspondence with TFA articles Relevant Groups Sub-groups Measures TFA Articles Transparency Publication of existing import-export regulations on the Internet 1.2 (Five measures) Stakeholders’ consultation on new draft regulations 2.2 (prior to their finalization) Advance publication/notification of new trade-related regulations 2.1 before their implementation (e.g., 30 days prior) Advance ruling on tariff classification and origin of imported goods 3 Independent appeal mechanism (for traders to appeal customs rulings 4 and the rulings of other relevant trade control agencies) Formalities Risk management (as a basis for deciding whether a shipment will be 7.4 (Eight physically inspected or not) measures) Pre-arrival processing 7.1 Post-clearance audits 7.5 Separation of release from final determination of customs duties, taxes, 7.3 fees and charges Establishment and publication of average release times 7.6 Trade facilitation measures for authorized operators 7.7 Expedited shipments 7.8 Acceptance of copies of original supporting documents required for 10.2.1 import, export or transit formalities Institutional Establishment of a National Trade Facilitation Committee (NTFC) 23 arrangement or similar body and National legislative framework and/or institutional arrangements for 8 cooperation border agencies cooperation (Five measures) Government agencies delegating border controls to Customs authorities Alignment of working days and hours with neighbouring countries at 8.2(a) border crossings Alignment of formalities and procedures with neighbouring countries at 8.2(b) border crossings Transit Transit facilitation agreement(s) with neighbouring country(ies) facilitation Customs authorities limit the physical inspections of transit goods and 10.5 (Four measures) use risk assessment Supporting pre-arrival processing for transit facilitation 11.9 Cooperation between agencies of countries involved in transit 11.16 Paperless trade Automated Customs System (e.g., ASYCUDA) (Ten measures) Internet connection available to Customs and other trade control agencies at border-crossings Electronic Single Window System 10.4 Electronic submission of Customs declarations Electronic application and issuance of import and export permits Electronic submission of Sea Cargo manifests Electronic submission of Air Cargo manifests Electronic application and issuance of Preferential Certificate of Origin Digital Trade Facilitation General Trade Facilitation Introduction 5 Table 2. (continued) Relevant Groups Sub-groups Measures TFA Articles E-payment of Customs duties and fees 7.2 Electronic application for Customs refunds Cross-border Laws and regulations for electronic transactions are in place paperless trade (e.g., e-commerce law, e-transaction law) (Six measures) Recognized certification authority issuing digital certificates to traders to conduct electronic transactions Electronic exchange of Customs declaration Electronic exchange of Certificate of Origin Electronic exchange of Sanitary and Phyto-Sanitary Certificate Paperless collection of payment from a documentary letter of credit Trade Trade-related information measures for SMEs facilitation for SMEs in AEO scheme (i.e., a Government has developed specific SMEs measures that enable SMEs to benefit from the AEO scheme more easily) (Five measures) SMEs access Single Window (i.e., a Government has taken action to make a Single Window more easily accessible for SMEs (e.g., by providing technical consultation and training services to SMEs on registering and using the facility) SMEs in NTFCs (i.e., a Government has taken action to ensure that SMEs are well-represented and made key members of NTFCs) Other special measures for SMEs Agricultural Testing and laboratory facilities are available to meet SPS of main trade trading partners facilitation National standards and accreditation bodies established to facilitate (Four measures) compliance with SPS Electronic application and issuance of SPS certificates Special treatment for perishable goods at border crossings 7.9 Women in trade Trade facilitation policy/strategy to increase women’s participation in trade facilitation Trade facilitation measures to benefit women involved in trade (Three measures) Women’s membership in the NTFC or similar bodies Trade finance Single Window facilitates traders access to finance facilitation Authorities engaged in blockchain-based supply chain project covering (Three trade finance measures) Variety of trade finance services available Trade Agency in place to manage trade facilitation in times of crises and facilitation in emergencies times of crisis Online publication of emergency trade facilitation measures (Five measures) Coordination between countries on emergency trade facilitation measures Additional trade facilitation measures to facilitate trade in times of emergencies Plan in place to facilitate trade during future crises Source: United Nations Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Digital Trade Facilitation Other Trade Facilitation Sustainable Trade Facilitation (continued) 6 Digital and sustainable trade facilitation: Global Report 2021 The UNRCs adopted a three-step approach to or “don’t know” (see Annex 1 for the definition of the develop the dataset (box 1). Data were collected, various stages of implementation). A score of 3, 2, verified and validated between January and July 1, 0 and DK,6 respectively, was assigned to each 2021. Each of the trade facilitation measures included implementation stage in order to calculate in the survey was rated as “fully implemented”, implementation scores for individual measures “partially implemented”, “pilot state”, “not implemented” across countries, regions or groups.7 Box 1. A three-step approach to data collection and validation Step 1. Data submission by experts: The survey instrument was sent by the UNRCs to trade facilitation experts (in Governments, the private sector and academia) to gather preliminary information. The questionnaire was also made publicly available online and disseminated with the support of the ADB, ASEAN, CAREC, ITC, OCO, UN/CEFACT, UNCTAD and the United Nations Network of Experts for Paperless Trade and Transport for Asia and the Pacific (UNNExT). Step 2. Data verification by the UNRCs Secretariat: The UNRCs cross-checked the data collected in Step 1. Desk research and data sharing among UNRCs and survey partners were carried out to further check the accuracy of data. Face-to-face or telephone interviews with key informants were arranged to gather additional information when needed. The outcome of Step 2 was a consistent set of responses per country. Step 3. Data validation by national Governments: The UNRCs sent the completed questionnaire to each national Government to ensure that the country had the opportunity to review the dataset and provide any additional information. The feedback from national Governments was incorporated in order to finalize the dataset. The survey covers 144 countries which are divided Middle East and North Africa (11 countries): into the following eight groups: Bahrain, Egypt, Islamic Republic of Iran, Iraq, Jordan, Lebanon, Morocco, State of Palestine, Saudi Arabia, Developed economies (30 countries): Andorra, the Syrian Arab Republic and Tunisia. Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czechia, Estonia, Finland, France, Pacific Island (11 countries): Fiji, Kiribati, Micronesia, Germany, Greece, Hungary, Ireland, Italy, Japan, Nauru, Palau, Papua New Guinea, Samoa, Solomon Lithuania, Luxembourg, Malta, Netherlands, New Islands, Tonga, Tuvalu and Vanuatu. Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland the United Kingdom. South and East Europe, Caucasus and Central Asia (17 countries): Albania, Armenia, Azerbaijan, Latin America and the Caribbean (21 countries): Belarus, Bosnia and Herzegovina, Georgia, Antigua and Barbuda, Argentina, Belize, Brazil, Chile, Kazakhstan, Kyrgyzstan, Republic of Moldova, Colombia, Costa Rica, Cuba, Dominican Republic, Montenegro, North Macedonia, Russian Federation, Ecuador, El Salvador, Guatemala, Guyana, Mexico, Serbia, Tajikistan, Turkey, Ukraine and Uzbekistan. Panama, Paraguay, Peru, Saint Vincent and the Grenadines, Trinidad and Tobago, Uruguay, Saint South Asia (8 countries): Afghanistan, Bangladesh, Kitts and Nevis. Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka. 6 DK, “don’t know”, is treated as “no implementation” (0) for calculation of the implementation rate. 7 For more details on the calculation of the scores and the methodology, see https://www.untfsurvey.org/files/documents/2021-Survey- Methodology.pdf Introduction 7 South-East and East Asia (14 countries): Brunei 1.3 Utilization of report and data Darussalam, Cambodia, China, Indonesia, Lao People’s Democratic Republic, Malaysia, Mongolia, Myanmar, the Philippines, the Republic of Korea, To make the survey as transparent and useful as Singapore, Thailand, Timor-Leste and Viet Nam. possible, regional and global datasets have been made available online on the dedicated survey Sub-Saharan Africa (32 countries): Botswana, website at untfsurvey.org. Use of the data by Burkina Faso, Burundi, Cabo Verde, Cameroon, researchers and policy analysts to advance Comoros, Congo, Cote d’Ivoire, Equatorial Guinea, understanding of the impact of different trade Ethiopia, Gabon, Guinea, Guinea-Bissau, Kenya, facilitation measures and derive evidence-based Madagascar, Malawi, Mauritania, Mauritius, policy advice is strongly encouraged. Stakeholders Mozambique, Namibia, Niger, Nigeria, Rwanda, interested in submitting information that may help to Senegal, Sierra Leone, Somalia, South Sudan, further improve or expand the dataset may contact Sudan, Tanzania, Togo, Zambia and Zimbabwe. the UNRC focal points listed on the dedicated website. Subject to the availability of resources, the UNRCs and other willing partners will endeavour to conduct the survey on a biennial basis. 8 Digital and sustainable trade facilitation: Global Report 2021 Trade facilitation implementation: Overview 9 2 Trade facilitation implementation: Overview Figure 1 shows the average rates of implementation of trade facilitation in the developed economies and seven developing regions mentioned above. The implementation rates are calculated based on 31 trade facilitation measures relevant to all 144 economies included in the survey and spanning five sub-groups from transparency to cross-border paperless trade.8 The global average implementation rate stands at 64.7% (figure 1).9 Developed economies have the highest implementation rate (81.8%), while the Pacific Islands have the lowest (40.1%). Among the developing regions, South- East and East Asia, and Latin America and the Caribbean achieve high implementation rates at 75.3% and 72.1%, respectively. The implementation rate in Sub-Saharan Africa which includes some of the poorest countries in the world – is 49.1%, second to the Pacific Islands. 8 Among the 58 measures surveyed across UNRCs, three measures including Electronic Submission of Sea Cargo Manifests, Alignment of Working Days and Hours with Neighbouring Countries at Border Crossings and Alignment of Formalities and Procedures with Neighbouring Countries at Border Crossings are excluded when calculating the overall score as they are not relevant to all countries surveyed. Four Transit Facilitation measures are also excluded for the same reason. In addition, Sustainable Trade Facilitation and Other Trade Facilitation are excluded, as these are newly-added groups of measures not included in the original United Nations Survey. 9 A few countries participated in the 2019 Global Survey but did not respond to the 2021 Global Survey. Data of these countries were duplicated from the 2019 Survey for illustrative purposes. These countries are: Antigua and Barbuda, Belize, Brazil, El Salvador, Guyana, Saint Vincent and the Grenadines, Trinidad and Tobago (Latin America and Caribbean), and Tanzania (Sub-Saharan Africa) and Tunisia (Middle East and North Africa). An alternative global average excluding those countries is 65.2%. 10 Digital and sustainable trade facilitation: Global Report 2021 Figure 1. Average implementation rates of trade facilitation measures around the world 100% 81.9% 80% 75.3% 72.1% 68.8% 64.7% 60% 58.7% 58.5% 49.1% 40% 40.1% 20% 0% Developed Latin Middle East Pacific South and East South Asia South-East Sub-Saharan Global Economies America and North Islands Europe, and East Asia Africa Average and the Africa Caucasus Caribbean and Central Asia Transparency Formalities Institutional arrangement Paperless trade Cross-border paperless trade and cooperation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Trade facilitation implementation rates for individual In terms of specific countries, Australia and New economies are provided in Annex 3. Implementation Zealand (96.8%) tie for first place as the highest varies greatly across regions and economies overall performers, followed by Singapore (95.7%), within the same region. For example, implementation Belgium, the Netherlands and the Republic of Korea rates in South-East and East Asia range from 24.7% (tied, each with an implementation rate of 94.6%). (Timor-Leste) to 95.7% (Singapore). Similarly, in Latin Among developing regions, Singapore (95.7%), the America, the implementation level varies from the Republic of Korea (94.6%) and China (91.4%) lead lowest 44.1% (Antigua and Barbuda) to the highest in South-East and East Asia. Mexico (91.4%) leads 91.4% (Mexico). Latin America and the Caribbean, while Saudi Arabia (84.9%) leads the Middle East and North Africa Figure 2. Average trade facilitation implementation rates and GDP per capita 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 100 000 110 000 120 000 130 000 GDP per capita (current US$): 2020 Sources: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org; World Bank World Development Indicators, accessed July 2021. Trade facilitation implementation Trade facilitation implementation: Overview 11 region. Azerbaijan (86%) and Russian Federation represent the poorest and most vulnerable segment (84.9%) lead the South and East Europe, Caucasus of the international community, with poor infrastructure and Central Asia region, while India (90.3%) leads and capacities, despite the special treatment and the way in South Asia. flexibilities embedded in the WTO rules, including the TFA. LLDCs lack direct access to the sea, resulting In general, advanced economies perform better than in more complex trade logistics and higher trade developing economies due to their well-developed costs. Many SIDS also face high communication and infrastructure and stronger established trade logistics costs. In addition, COVID-19 mitigation institutions. However, this is not always the case. measures and subsequent export restrictions have About 60 countries with a GDP per capita lower than had a disproportionate impact on these countries. US$ 10,000 have achieved implementation rates The efforts that LDCs, LLDCs and SIDS make higher than 50% (figure 2). towards TF implementation should be supported through addressing their needs and enhanced 2.1 Implementation in countries cooperation by the international community. with special needs The red bars in figure 3 indicate the average level of implementation for each group of countries, while Figure 3 presents an overview of trade facilitation the diamonds show the implementation rates for implementation in different regions, including three individual economies within each group. All three groups of countries with special needs, i.e., groups of countries with special needs show similar Landlocked Developing Countries (LLDCs), Least implementation rates, ranging between 48% and Developed Countries (LDCs) and Small Island 56%. This is significantly below the global average Developing States (SIDS) (see Annex 2 for grouping implementation rate (64.7%). This result confirms the of countries with special needs). LLDCs, LDCs and need to provide LDCs, LLDCs and SIDS with special SIDS are the world’s most vulnerable countries technical assistance and capacity-building support to and face a number of connectivity barriers. LDCs help them bridge their existing implementation gaps. Figure 3. Average trade facilitation implementation rates by region and in countries with special needs 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Landlocked Developing Countries Least Developed Economies Small Island Developing States 12 Digital and sustainable trade facilitation: Global Report 2021 2.2 Most and least implemented similar body stands at 84%, while the implementation level of government agencies delegating controls to trade facilitation measures customs authorities is only 48%. All countries are engaged in implementing various The global average implementation level for measures to enhance the transparency of trade ‘Paperless Trade’ stands at 64%. The implementation procedures and reduce unnecessary formalities rates vary greatly, depending on the individual associated with them. Implementation levels vary measures considered. The levels of implementation significantly across countries for all sub-groups. The of automated customs system and internet gaps are particularly wide for paperless trade and connection available to customs and other trade cross-border paperless trade measures (table 3). control agencies reach 86%, while electronic application for customs refunds is only at 38%. In general, ‘Transparency’ measures (including measures such as stakeholders’ consultations The implementation level for ‘Cross-Border Paperless on new draft regulations) have the highest Trade’ (38%) is substantially lower than measures in implementation rates (an average 78%) followed other sub-groups, which highlights the need for closer by ‘Formalities’ and ‘Transit Facilitation’ (both intergovernmental cooperation on cross-border standing at 75%). Post-clearance audits (82%), risk paperless trade. management (81%) and separation of release from final determination of customs duties, taxes, fees and The expansion of international trade can also help charges (81%), are the most implemented measures to address critical development challenges. in ‘Formalities’, while significant room for improvement “Sustainable Trade Facilitation” is the group that exists for measures such as establishment and aligns trade facilitation with sustainable development publication of average release times (57%) (figure 4). goals for inclusive economic growth and increases opportunities for sectors and groups with special The implementation rate for institutional arrangements needs. ‘Agricultural Trade Facilitation’ measures have and cooperation is 69%. The level of implementation been relatively well-implemented. On the other hand, of National Trade Facilitation Committee (NTFC) or the implementation of measures to increase Figure 4. Implementation rates of different sub-groups of trade facilitation measures 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Transparency Formalities Institutional arrangement and cooperation Paperless trade Cross-border paperless trade Transit facilitation Trade facilitation for SMEs Agricultural trade facilitation Women in trade facilitation Trade finance facilitation Trade facilitation in times of crisis Trade facilitation implementation: Overview 13 opportunities for SMEs and women remains low trade finance processes among trade policy and (41% and 31%, respectively), showing a lack of facilitation specialists as well as pointing to significant awareness and policies that address inclusiveness room for improvement in this area. in trade facilitation. ‘Trade Facilitation in Times of Crisis’ is slightly better The average implementation of ‘Trade finance’ is only implemented (41%). The COVID-19 pandemic 21%. The absence of data partly explains this low represents an unprecedented disruption to global implementation rate for about half of the countries. trade. Many immediate policy responses such as Many respondents from Customs, other trade agency in place to manage trade facilitation in times agencies and private sector trade professionals could of crises and emergencies and online publication of not complete the three questions covered under this emergency TF measures have been implemented to sub-group. This suggests a lack of awareness of a certain extent to keep global supply chains going, Table 3. Most and least implemented measuresmp Most implemented (% of countries) Least implemented (% of countries) Implemented fully, Implemented fully, Sub-groups partially and on a partially and on a Measures pilot basis (%)/full Measures pilot basis (%)/full implementation implementation (%) (%) Transparency Stakeholders’ consultation 93.8 / 61.1 Advance ruling on tariff 85.4 / 54.2 on new draft regulations classification and origin of (prior to their finalization) imported goods Formalities Risk management 97.2 / 56.3 Establishment and 77.1 / 29.9 publication of average release times Institutional National Trade Facilitation 91.7 / 70.1 Government agencies 60.4 / 25.7 arrangement and Committee or similar body delegating border controls cooperation to Customs authorities Paperless trade Automated Customs 95.8 / 68.8 Electronic Application for 50.0 / 20.8 System Customs Refunds Cross-border Laws and regulations for 72.9 / 30.6 Paperless collection of 40.3 / 14.6 paperless trade electronic transactions payment from a documentary letter of credit Transit facilitation Limit the physical 72.2 / 56.3 Transit facilitation 63.9 / 37.5 inspections of transit goods agreement(s) and use risk assessment Trade facilitation Trade-related information 81.9 / 38.2 SMEs in AEO scheme 36.8 / 16.7 for SMEs measures for SMEs Agricultural trade Special treatment for 84.7 / 41.7 Electronic application and 53.5 / 13.2 facilitation perishable goods issuance of SPS certificates Women in trade Women membership in 50.7 / 13.2 Trade facilitation policy/ 38.2 / 9.0 facilitation the National Trade strategy incorporates Facilitation Committee or special consideration of similar bodies female traders Trade finance Variety of trade finance 59.0 / 23.6 Single window facilitates 13.9 / 2.8 facilitation services available traders access to finance Trade facilitation Agency in place to 59.0 / 13.9 Plan in place to facilitate 43.8 / 16.0 in times of crisis manage TF in times trade during future crises of crises and emergencies 14 Digital and sustainable trade facilitation: Global Report 2021 especially for essential goods. However, many Despite the grave impact of COVID-19 on global countries still lack long-term trade facilitation plans trade and the decline of trade flows in 2020, to enhance preparedness for future crises. significant progress has been observed towards more Improvement of sustained and long-term measures, efficient trade facilitation during the past two years. such as plan in place to facilitate trade during future The implementation rate at the global level has crises (34%), is also critical to improving resilience increased by more than 5 percentage points.11 The and reducing the likely impact of future crises. most progress is observed in South Asia, where implementation rates have increased by more than 2.3 Progress in implementation 10 percentage points. A substantial improvement is also observed in Sub-Saharan Africa (6 percentage of trade facilitation measures points), Developed Economies (5.2 percentage since 2019 points) and Pacific Islands (4.9 percentage points). The progress made by Sub-Saharan Africa and Pacific Islands is particularly pronounced, as the two A total of 144 countries participated in the Fourth UN groups are very vulnerable and less resilient to global Global Survey, of which 128 countries had also trade disruptions due to existing gaps and lack of participated in the Third UN Global Survey in 2019. infrastructure. Nevertheless, the pandemic has Only countries covered in both surveys are analysed spurred countries to accelerate their efforts to ensure to assess progress in the implementation of trade smoother trade flows and improve their current trade facilitation measures over the previous two years to facilitation practices in the regulatory, institutional and make the samples comparable.10 technical spheres. Comparatively, progress has not Figure 5. Progress of implementation of trade facilitation measures by various regions, 2019 and 2021 100% 80% 60% 40% 20% 0% Developed Latin America Middle East Pacific South and South Asia South-East Sub-Saharan Global Economies and the and North Islands East Europe, and East Africa Average Caribbean Africa Caucasus and Asia Central Asia 2019 2021 Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 10 See Annex 4 for details, including country list and comparison of average implementation rates by region using the full (144 countries) and limited (128 countries) datasets. 11 The global average implementation rate of the 128 countries in 2021 and 2019 are 66.1% and 60.9%, respectively. Trade facilitation implementation: Overview 15 been significant in the Middle East and North Africa, implementation rates for ‘Transparency’, ‘Formalities’, where an increase of only 2.3 percentage points has ‘Institutional Arrangement and Cooperation’ have occurred (figure 5). increased by 4.3, 4.5 and 4.7 percentage points, respectively (figures 6 and 7). Progress has been made at more or less the same pace across different groups of measures. The most Figure 7 shows improvements in different regions progress has been made in improving “Digital Trade across all five main sub-groups. It shows that South Facilitation” with ‘Paperless Trade’ and ‘Cross-Border Asia has made significant progress across all sub- Paperless Trade’, with increases of 6.3 and groups (India has undertaken ambitious reforms 5.4 percentage points, respectively. This is the first during the past two years). Pacific Islands have made time since the introduction of the UN Global Survey particularly good progress in implementing that measures in “Digital Trade Facilitation” have ‘Transparency’ and ‘Formalities’. Sub-Saharan Africa shown the highest level of improvements. This could has made noticeable progress in ’Formalities’, be due to the fundamental shift of preference towards ‘Institutional Arrangement and Cooperation’ and digital systems and accelerated implementation ‘Paperless Trade’. Developed Economies have also of paperless trade.12 Meanwhile, the average made pronounced progress in ‘Paperless Trade’. Figure 6. Progress of global implementation of trade facilitation measures, 2019 and 2021 100% 80% 60% 40% 20% 0% Transparency Formalities Institutional Paperless trade Cross-border arrangement paperless trade and cooperation 2019 2021 Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 12 ESCAP, 2021, Trade Facilitation in Times of Crisis and Pandemic: Practices and Lessons from the Asia-Pacific, available at https:// www.unescap.org/sites/default/d8files/knowledge-products/Regional%20report-Trade%20facilitation%20in%20times%20 of%20crisis%20and%20pandemic_0.pdf 16 Digital and sustainable trade facilitation: Global Report 2021 Figure 7. Progress of implementation of specific group of trade facilitation measures in various regions, 2019 and 2021 Transparency Formalities Developed Economies Developed Economies 100% 100% Global Average 80% Latin America and the Caribbean Global Average 80% Latin America and 60% the Caribbean60% 40% 40% Sub-Saharan Africa 20% Middle East and North Africa Sub-Saharan Africa 20% Middle East and 0% North Africa0% South-East and Pacific Islands South-East and East Asia Pacific IslandsEast Asia South Asia South and East South and East South Asia Europe, Caucasus Europe, Caucasus and Central Asia and Central Asia 2019 2021 2019 2021 Institutional arrangement and cooperation Paperless trade Developed Economies Developed Economies 100% 100% Global Average Latin America and 80% Global Average 80% Latin America and the Caribbean the Caribbean 60% 60% 40% 40% Sub-Saharan Africa 20% Middle East and Sub-Saharan Africa 20% Middle East and North Africa North Africa 0% 0% South-East and Pacific Islands South-East and Pacific Islands East Asia East Asia South Asia South and East South Asia South and East Europe, Caucasus Europe, Caucasus and Central Asia and Central Asia 2019 2021 2019 2021 Cross-border paperless trade Overall implementation Developed Economies Developed Economies 100% 100% Latin America and Global Average 80% Global Average 80% Latin America and the Caribbean the Caribbean 60% 60% 40% 40% Middle East and Sub-Saharan Africa 20% Sub-Saharan Africa 20% Middle East and North Africa North Africa 0% 0% South-East and Pacific Islands South-East and Pacific Islands East Asia East Asia South Asia South and East South Asia South and East Europe, Caucasus Europe, Caucasus and Central Asia and Central Asia 2019 2021 2019 2021 Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Implementation of trade facilitation measures: A closer look 17 3 Implementation of trade facilitation measures: A closer look 3.1 General trade facilitation measures 3.1.1 Transparency Transparency is a critical obligation for WTO members and the fundamental principle of the multilateral trading system. It stipulates that a country’s policies and regulations affecting trade should be communicated to its trading partners. The main provision dealing with transparency can be found in GATT Article X on the publication and administration of trade regulations. Transparency is also recognized as an essential element of trade facilitation. It has been re-emphasized in Articles 1-5 of the WTO TFA. Five trade facilitation measures included in the survey are categorized in ‘Transparency’. The global average level of implementation of all five transparency measures exceeds 70% (figure 8). However, the implementation levels of these measures vary widely across regions. While the developed economies, South and East Europe, Caucasus and Central Asia, South-East and East Asia and Latin America and the Caribbean, have almost fully implemented these measures, Sub-Saharan Africa and the Pacific Islands lag far behind, especially on the 18 Digital and sustainable trade facilitation: Global Report 2021 Figure 8. Global implementation of transparency measures in various regions Publication of existing import-export regulations on the internet 100% 80% 60% Stakeholders’ consultation on 40% Independent appeal new draft regulations (prior to mechanism 20% their finalization) 0% Advance ruling on tariff Advance publication/notification classification and origin of of new trade-related regulations imported goods before their implementation Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org implementation of advance rulings on tariff finalization), independent appeal mechanism and classification and origin of imported goods and publication of existing import-export regulations on independent appeal mechanism (figure 8). the internet. The measure of advance publication/ notification of new trade-related regulations before Figure 9 shows the percentage of countries that have their implementation has also been implemented by fully implemented, partially implemented, or piloted nearly 90% of the countries. The issuance of advance in the ‘Transparency’ measures, which are generally rulings on tariff classification and origin of imported well-implemented. More than 90% of the countries goods is the least implemented Transparency surveyed have introduced measures of stakeholders’ measure, and it has been implemented by consultation on new draft regulations (prior to their approximately 85% of the countries surveyed. Figure 9. State of implementation of transparency measures globally Stakeholders’ consultation on new draft regulations (prior to their finalization) Independent appeal mechanism Publication of existing import-export regulations on the internet Advance publication/notification of new trade-related regulations before their implementation Advance ruling on tariff classification and origin of imported goods 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Implementation of trade facilitation measures: A closer look 19 3.1.2 Formalities countries have introduced TRS with the assistance of relevant regional and international organizations. The ‘Formalities’ sub-group consists of eight general For example, WCO and ADB supported TRS trade facilitation measures in relation to Articles 7 and development in some countries with special needs 10 of the WTO TFA and GATT Article VII, titled in the Asia-Pacific region. That said, when the Release and Clearance of Goods. assistance project ended, such studies were discontinued in certain countries. This reflects the fact The level of implementation varies significantly that countries with special needs could be over-reliant across regions when it comes to measures in this on regional and international organizations for sub-group (figure 10). The implementation of the technical assistance. For sustainability, national or measures for risk management, post clearance regional monitoring and evaluation mechanisms audit, separation of release from final determination could be established. Being the least implemented of customs duties, taxes, fees and charges, and measure under this sub-group, more than 70% of acceptance of copies of original supporting the countries have implemented this measure, at documents required for import, export or transit least on a pilot basis. That said, full implementation formalities is well underway in most regions. has taken place in less than 30% of the economies surveyed (figure 11). The implementation of trade facilitation measures for authorized operators, and the establishment and Most of the countries surveyed have implemented publication of average release time, remains measures to reduce unnecessary formalities that challenging in many regions, particularly the Pacific impede trade. Figure 11 illustrates that the measures Islands. It is worth noting that the implementation of for risk management, the separation of release from establishment and publication of average release final determination of customs duties, taxes, fees and time is notably low for developed economies. This charges, post clearance audits, and pre-arrival may be explained by the fact that they already have processing have been well-implemented. More than well-established release and clearance mechanisms, 90% of the countries have, to some extent, and follow-up studies on release time might have implemented these four measures. been overlooked. On the other hand, many developing Figure 10. Global implementation of formalities measures in various regions Risk management 100% Acceptance of copies of original supporting 80% documents required for import, export or Pre-arrival processing transit formalities 60% 40% 20% Expedited shipments 0% Post-clearance audits TF measures for authorized Separation of Release from final operators determination of customs duties, taxes, fees and charges Establishment and publication of average release times Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 20 Digital and sustainable trade facilitation: Global Report 2021 Figure 11. State of implementation of formalities measures globally Risk management Separation of Release from final determination of customs duties, taxes, fees and charges Post-clearance audits Pre-arrival processing TF measures for authorized operators Acceptance of copies of original supporting documents required for import, export or transit formalities Expedited shipments Establishment and publication of average release times 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 3.1.3 Institutional arrangements and not appear to be a common practice in Latin America cooperation and the Caribbean, and the Pacific Islands. Institutional arrangements are an organizational Most countries surveyed have started implementing framework for efficiently managing governmental national legislative framework and/or institutional activities and coordinating with other border agencies arrangements for border agencies cooperation, and to fulfill their mandate. Three trade facilitation NTFC or similar body measures. Nearly 90% of the measures featured in the survey are grouped under countries surveyed have at least partially implemented ‘Institutional Arrangement and Cooperation’. These these measures. It has been observed that an measures are stipulated by Articles 8 and 23 of the increasing number of countries have fully established WTO TFA that require the establishment of a national a NTFC during the past two years. The role of NTFCs trade facilitation body and ensuring cooperation and or similar bodies in the global economic recovery coordination among trade-related government following COVID-19 has been crucial and repeatedly agencies. emphasized by the international community. 13 Enhancing the capacity of NTFCs or similar bodies Figure 12 shows that the national legislative and increasing their visibility are actions countries framework and institutional arrangement available to need to consider. This measure will also be read with ensure border agencies cooperated with each other, a measure of agency in place to manage TF in times and National Trade Facilitation Committee (NTFC) of crises and emergencies in the newly incorporated measures have been extensively implemented ‘Trade Facilitation in Times of Crisis’ measures. Last, globally. In contrast, the implementation of approximately 60% of the countries have initiated government agencies delegating controls to customs government agencies’ measures to delegate controls authorities varies across regions. This measure does to customs authorities (figure 13). 13 UNCTAD has introduced several NTFC empowerment trainings and technical assistance during the COVID-19 crisis. More information at https://unctad.org/news/role-national-trade-facilitation-committees-global-economic-recovery-following-covid-19 Implementation of trade facilitation measures: A closer look 21 Figure 12. Global implementation of institutional arrangement and cooperation measures in various regions National Trade Facilitation Committee or similar body 100% 80% 60% 40% 20% 0% Government agencies delegating National legislative framework and/or border controls to Customs institutional arrangements for border authorities agencies cooperation Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Figure 13. State of implementation of institutional arrangement and cooperation measures globally National Trade Facilitation Committee or similar body National legislative framework and/or institutional arrangements for border agencies cooperation Government agencies delegating border controls to Customs authorities 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 3.1.4 Transit the key to unlocking the potential of landlocked countries to be better integrated into the supply chain. A functional transit system is essential for trade It will also accelerate regional integration as well as connectivity. It also meets substantive needs, both of boost regional and international trade. landlocked and transit countries. Transit facilitation could benefit from active engagement of Governments As shown in figure 14, the global average on regional and global cooperation. Four measures implementation level for transit measures exceeds covered in Transit Facilitation included in the survey 69% for all the measures. The average relate specifically to WTO TFA Article 11 on Freedom implementation level in developed economies is of Transit. These measures are intended to reduce, significantly higher than that in developing regions, as much as possible, the formalities associated with particularly with regard to supporting pre-arrival transit trade, thereby allowing the swift flow of goods processing for transit facilitation and transit facilitation from one country to another. Efficient transit will be agreements. The Middle East and North Africa are 22 Digital and sustainable trade facilitation: Global Report 2021 Figure 14. Global implementation of transit facilitation measures in various regions Transit facilitation agreement(s) 100% 80% 60% 40% 20% Cooperation between agencies of 0% Limit the physical inspections of transit countries involved in transit goods and use risk assessment Supporting pre-arrival processing for transit facilitation Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org the regions with the lowest score, most notably countries for which transit is applicable, at least on regarding measures for supporting pre-arrival a pilot basis, although the implementation has mainly processing for transit facilitation, and cooperation been incomplete. Less than half of the countries between agencies of countries involved in transit. involved in transit have fully implemented the measures supporting pre-arrival processing for transit Figure 15 shows that all the transit measures facilitation as well as transit facilitation agreement considered have been implemented by most with neighbouring countries. Figure 15. State of implementation of transit facilitation measures globally Limit the physical inspections of transit goods and use risk assessment Cooperation between agencies of countries involved in transit Supporting pre-arrival processing for transit facilitation Transit facilitation agreement(s) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Not applicable Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Implementation of trade facilitation measures: A closer look 23 3.2 Digital trade facilitation accelerated the digital transformation and underscored the importance of paperless trade. Achieving cross- border paperless trade across the region is expected Digital trade facilitation refers to the application of to be a long and difficult process, and it cannot be information and communication technologies (ICT) achieved without close collaboration between and digital solutions to automate and simplify trade countries. procedures. Rapid technology developments on digitally enabled services, supported by a range of 3.2.1 Paperless trade new data-driven services, also facilitate the rise of cross-border trade. There are two interconnected The ‘Paperless Trade’ measures relate to the sub-groups. ‘Paperless Trade’ includes measures application of modern ICT to trade-related services that transform traditionally paper-based at the national level. Measures in this sub-group documentation systems into an electronic format to range from the availability of Internet connections at speed up trade and ease the cost of doing business. border crossings and the automation of Customs It has become an essential component of systems to fully-fledged electronic Single Window governmental efforts to improve the efficiency of systems. Many of the measures are identified in customs controls and trade administration processes. Articles 7 and 10 of the WTO TFA and in the text ‘Cross-Border Paperless Trade’ is the next step that of the Framework Agreement on Facilitation of enables cross-border mutual recognition, and Cross-border Paperless Trade in Asia and the Pacific. exchange of trade-related data and documents in electronic form through institutional arrangement and The average regional levels of implementation for the operational mechanisms. nine ‘Paperless Trade’ measures vary widely, as shown in figure 16. The implementation of automated The digital transformation of custom procedures customs systems and Internet connection available could significantly reduce the time and costs required to customs and other trade control agencies is for trading. Acceleration of trade digitalization could generally good in all regions. Developed economies mitigate the consequences of COVID-19 and further have achieved 97% and 100%, respectively for these harness the recovery process beyond the current two measures. Also notable is that Pacific Islands, crisis. Notwithstanding that, the pandemic has Figure 16. Global implementation of paperless trade measures in various regions Automated Customs System 100% Electronic Application for Customs 80% Internet connection available to Customs Refunds and other trade control agencies 60% 40% E-Payment of Customs Duties and Fees 20% Electronic Single Window System 0% Electronic application and issuance of Electronic submission of Customs Preferential Certificate of Origin declarations Electronic Submission of Air Electronic application and issuance Cargo Manifests of import and export permit Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 24 Digital and sustainable trade facilitation: Global Report 2021 which lag far behind in all other Paperless Trade duties and fees. These results indicate that most measures have also reached a score of more than economies have been actively developing ICT 70% for the automated customs system. This could infrastructure and services, which are essential for be attributed to the capacity-building programmes of achieving an efficient paperless trade system PACER Plus to assist in implementing and upgrading automated customs systems.14 Approximately 70% of the countries surveyed have, to some extent, engaged in electronic submission of Figure 17 highlights the gaps when it comes to air cargo manifests, electronic Single Window the implementation of different measures within the systems and electronic application and issuance of sub-group. The measures of automated customs import and export permits. However, implementation systems, electronic submission of customs of these measures is mostly partial or on a pilot basis. declarations, and internet connection available to The implementation of electronic application and customs and other trade control agencies have been issuance of preferential certificate of origin as well as implemented, at least on a pilot basis, by more electronic application for customs refunds are still than 90% of the countries surveyed, and full a challenge. Only half of the countries surveyed can implementation has been reached by more than half proceed with refunds electronically. It is still common of the countries. Similarly, more than 80% of the among many countries for refunds to be made with countries have at least piloted e-payment of customs paper documents (figure 17). Figure 17. State of implementation of paperless trade measures globally Automated Customs System Electronic submission of Customs declarations Internet connection available to Customs and other trade control agencies E-Payment of Customs Duties and Fees Electronic Submission of Air Cargo Manifests Electronic Single Window System Electronic application and issuance of import and export permit Electronic application and issuance of Preferential Certificate of Origin Electronic Application for Customs Refunds 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 14 See https://www.ocosec.org/enhancing-regional-integration-through-customs-automation/ Implementation of trade facilitation measures: A closer look 25 3.2.2 Cross-border paperless trade Africa indicate significant challenges in implementing these measures. At the cross-border level, six measures are included under the ‘Cross-Border Paperless Trade’ as shown Progress has been made in establishing laws and in figure 18. Law and regulations for electronic regulations for electronic transactions. However, the transactions’ and ‘recognized certification authority implementation levels of other measures in the group are basic building blocks to be used towards enabling are very low. South-East and East Asia lead the other the exchange and legal recognition of trade-related regions when it comes to implementing measures data and documents, not only among stakeholders related to the cross-border electronic exchange of within a country but also between stakeholders along trade-related documents, including exchange of the entire international supply chain. certificates of origin, and sanitary and phytosanitary certificates. This due to the continued efforts to The other four measures relate to the exchange of develop the ASEAN Single Window, which enables specific trade-related data and documents across the cross-border electronic exchange of Customs borders needed for achieving a fully integrated declarations, certificates of origin and SPS certificates. paperless transformation. Figure 18 shows the average scores for implementing measures under Developed economies notably received lower ‘Cross-Border Paperless Trade’ across regions. At implementation rates than some developing the global level, the implementation of these economies, particularly with regard to the measures measures has been comparatively low. In particular, regarding electronic exchange of certificates of origin countries in the Pacific Islands and Sub-Saharan and electronic exchange of SPS certificates. Figure 18. Global implementation of cross-border paperless trade measures in various regions Laws and regulations for electronic transactions 100% 80% 60% Paperless collection of payment from a Recognised certification authority documentary letter of credit 40% 20% 0% Electronic exchange of Sanitary & Electronic exchange of Customs Phyto-Sanitary Certificate Declaration Electronic exchange of Certificate of Origin Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 26 Digital and sustainable trade facilitation: Global Report 2021 European Union members consist of a large have such legal frameworks fully in place, affecting proportion of the developed economies covered in the legal recognition of electronic data and the survey. Eurostat revealed that most trade documents across borders. Less than 60% of the happens within the European Union,15 where a countries have a recognized certification authority in certificate of origin is only necessary for importing place. This partly explains why the full electronic from/exporting to a third country. That said, the exchange of trade-related data and documents (such patchwork of disconnected national portals could as Customs declaration, certificates of origin and undermine the Single Market and Customs Union SPS certificates) is limited. Implementation is and create confusion for traders. In late 2020, the essentially on a pilot or partial basis. European Union Single Window initiative was proposed to unify and simplify customs formalities During the past two years, paperless trade and enable information exchange among European systems have helped to keep trade flowing during the Union members. This implies that developed COVID-19 pandemic. The crisis has also accelerated economies, including the European Union have the regional integration and the implementation of started acting on the need to transition to harmonized some regional Single Window initiatives. The regional digital solutions. Single Windows create a mechanism that could handle trade-related regulatory requirements within Figure 19 reveals that more than 70% of the a given region as well as provide additional levels of countries surveyed have taken steps to establish functionality for shared trade and customs legal and regulatory frameworks for electronic procedures within a region (box 2). transactions. However, only 30% of the countries Figure 19. State of implementation of cross-border paperless trade measures globally Laws and regulations for electronic transactions Electronic exchange of Customs Declaration Recognised certification authority Electronic exchange of Sanitary & Phyto-Sanitary Certificate Electronic exchange of Certificate of Origin Paperless collection of payment from a documentary letter of credit 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 15 The value of intra-European Union trade in goods was 1.5 times as high as the value of extra-European Union trade in goods in 2020. See https://ec.europa.eu/eurostat/statistics-explained/index.php?title=International_trade_in_goods_for_the_EU- an_overview&oldid=534985 Implementation of trade facilitation measures: A closer look 27 Box 2. Good practices in cross-border paperless trade [ASEAN] All ASEAN members have joined the ASW Live Operation, which allows the granting of preferential tariff treatment based on the ATIGA e-Form D exchanged through the ASW. Recently, Cambodia, Myanmar, Singapore, Malaysia and Thailand started the exchange of the ASEAN Customs Declaration Document (ACDD) through the ASW, and the remaining ASEAN members are expected to join by the end of 2021. The system opens opportunities for more trade-related documents (e-SPS, e-AH, e-FS) to be exchanged electronically. Source: ASEAN Single Window, Available at https://asw.asean.org/ [Africa] The African Alliance for Electronic Commerce (AACE), with 18 member countries, seeks to promote the SW concept in compliance with the recommendations of international institutions. One of the Alliance’s key projects is establishing a Regional Single Window (RSW) that will interconnect all national platforms (NSW) to smoothen trade and enable African countries to be more competitive in the global market. The RSW will be built on a simple organizational model. National Single Windows will exchange data via the regional platform. Then, each NSW is responsible for the exchanges with its local users. Thus, it will not be possible for a Customs administration or economic operator to directly connect to the RSW, except when otherwise authorized by the NSW. Moreover, the RSW can be developed and hosted ad hoc, or simply derive from one of its members that has the technical capacity to offer services to the others. Source: http://www.swguide.org/single_window/about_aace.php [Kenya] Kenya has implemented a single maritime window system as part of its efforts to improve efficiency at the port of Mombasa and address the perennial challenge of congestion that has seen importers incur losses due to demurrage charges. The system allowing shipping agents to submit vessel pre-arrival and pre-departure declarations electronically went live on 2 June 2021. Implementation of the system is in line with the International Maritime Organization Convention on facilitation of maritime traffic (known as the FAL Convention), which makes it mandatory for Governments to introduce electronic information exchange between ships and ports. Source: https://maritime-executive.com/article/kenya-adopts-single-window-system-for-port-efficiency [European Union] The recent development of the “New Computerized Transit System” (NCTS) includes the European Union, the “European Free Trade Association” (Switzerland, Liechtenstein, Norway and Iceland), Turkey, North Macedonia and Serbia. It is an electronic declaration and processing system that traders must use to submit a transit declaration electronically. For transit shipments between participating States this system provides a single procedure from the start of transportation to the final destination, with all the customs authorities linked electronically. Other ECE countries that have shown an interest in participating in the NCTS system for transit include Albania, Azerbaijan, Bosnia and Herzegovina, Georgia and the Republic of Republic of Moldova and Ukraine. IPPC launched an important initiative in 2017 to develop a “trusted third party” system to support the government- to-government (G2G) exchange of sanitary and phytosanitary (SPS) certificates electronically. This initiative aims to reduce the resources required in every country to develop electronic tools for producing and receiving electronic certificates as well as negotiating agreements with trading partners to allow for their exchange. This system allows SPS certificates to be exchanged, downloaded or viewed directly on the web. The system “e-Phyto Hub” is now operational in the European Union. All European Union member States are now able to communicate with the IPPC ePhyto Hub in order to receive and process electronic data from phytosanitary certificates transmitted by non-EC countries through the IPPC ePhyto Hub. Source: ECE, 2021, Sustainable Mobility and Smart Connectivity, available at https://unece.org/sites/default/files/2021-04/ 2015779_E_web.pdf [Pacific Alliance] Since 2016, the four members of the Pacific Alliance (Chile, Colombia, Mexico and Peru) have been exchanging preferential certificates of origin and SPS certificates through their respective electronic Single Windows. They are now working on enabling the cross-border electronic exchange of customs declarations. Source: Country responses in the UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. [Central America] Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama electronically exchange Customs declarations and preferential certificates of origin. They are now working on enabling the cross-border electronic exchange of SPS certificates. Source: Country responses in the UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. 28 Digital and sustainable trade facilitation: Global Report 2021 3.3 Sustainable trade facilitation issues, bribery and corruption, time-consuming trade procedures, and documentary requirements. 16 In today’s interconnected world, Governments face To make trade facilitation more sustainable and new regulatory challenges in managing issues arising inclusive and mainstream trade facilitation to attain from trade disruption as well as ensuring that the sustainable development goals in the digital era, opportunities and benefits from international trade “Sustainable Trade Facilitation” is an essential pillar can be realized and shared inclusively, especially in of the UN Global Survey, incorporated since 2017. the digital trade environment. Digital trade provides Measures under three sub-groups ‘Trade Facilitation an opportunity for sectors and groups with special for SMEs’, ‘Agriculture Trade Facilitation’ and ‘Women needs to gain better access to international markets in Trade Facilitation’ are included in this group. and global supply chains. On the other hand, it could widen inequalities among people, firms and locations. 3.3.1 Trade facilitation for SMEs Many SMEs are lagging in digital transformation in that they do not have enough capabilities or financial A trade agenda that explicitly recognizes and acts on resources to access and effectively use digital the facilitation of SMEs can be a strong force for instruments. Gender inequalities also exist in many inclusive trade. Figure 20 shows the average scores different areas, creating distinct barriers to women for implementing the ‘Trade Facilitation for SMEs’ and preventing integration into international trade. measures across regions. The implementation of A recent ECA study in the Economic Community measures in this sub-group is generally low and of West African States (ECOWAS) region showed varies widely across regions. Developed economies, that female small-scale traders, often informal, face which have achieved higher implementation rates for gender-related non-tariff barriers more often than other sub-groups, have received comparatively lower their male counterparts. Such barriers include rates for measures under this sub-group (see box 3 physical and sexual harassment, personal safety for good practices). Figure 20. Global implementation of trade facilitation for SMEs measures in various regions Trade-related information measures for SMEs 100% 80% 60% 40% Other special measures for SMEs SMEs in AEO scheme 20% 0% SMEs in National Trade SMEs access Single Window Facilitation Committee Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 16 ECA, 2020, Africa Trade Report 2020: Informal Cross-Border Trade in Africa in the Context of the AfCFTA. Available at https://afr- corp-media-prod.s3-eu-west-1.amazonaws.com/afrexim/African-Trade-Report-2020.pdf Implementation of trade facilitation measures: A closer look 29 Box 3. Good practices on trade facilitation for SMEs SMEs in AEO Scheme [Australia and Hong Kong, China] SMEs in Australia have access to their AEO programme. The Government of Australia distinguishes SMEs from other actors and provides a risk profile for SMEs that is different from the one for larger businesses. Hong Kong, China grants additional benefits to AEO-certified companies that actively promote AEO certification among SMEs providers and which have developed outreach strategies to promote the inclusion of SMEs. Source: Inter-American Development Bank, 2020, AEO in APEC Economies: Opportunities to Expand Mutual Recognition Agreements and the Inclusion of SMEs. Source: https://publications.iadb.org/publications/english/document/AEO_in_APEC_Economies_Opportunities_to_Expand_Mutual_ Recognition_Agreements_and_The_Inclusion_of_SMEs.pdf SMEs in NTFC [India] In India, many actions have been taken to benefit SMEs. Webinars are conducted regularly by the Directorate-General of Tax Payer Services (DGTS) and the Directorate-General of Foreign Trade (DGF) create awareness among SMEs. The dedicated outreach working group is part of the National Committee on Trade Facilitation that is responsible for driving such agendas. Source: Webinars available at https://www.dgft.gov.in/CP/?opt=webinar-under-niryaat-bandhu-scheme; Directorate General of Taxpayer Services, GST MSME, available at https://www.cbic.gov.in/resources//htdocs-cbec/gst/MSME_Flyer.pdf SME access to a Single Window [Azerbaijan] Business incubators created by the Small and Medium Business Development Agency of the Republic of Azerbaijan offer various services to business start-ups, and each incubator’s services differ. Primary business incubator services mainly provide necessary office equipment, maintenance of accounting and filing, advice on business development strategy, exploration of investment opportunities, and various training workshops and seminars on successful business operations. The Center for Analysis Economic Reforms and Communication has also made the Single Window more accessible to SMEs. Source: Country responses in the Global Survey on Digital and Sustainable Trade Facilitation 2021; see also https://azexport.az/ https://smb.gov.az/en https://dth.az/ Other measures for SMEs [Paraguay] The EXPORTAFACIL (Easy Export) system simplifies exports for SMEs by using the postal system´s logistics infrastructure. Beneficiary firms must be SMEs registered in the Export Single Window. Benefits include reduced shipping rates, simplified export procedures and technical support, among others. Source: Country response in the Global Survey on Digital and Sustainable Trade Facilitation 2021 and EXPORTAFACIL´s website https://www.mic.gov.py/exporta_facil/marcolegal.html (in Spanish). [COMESA] Trade Information Desk Offices (TIDOs) have been set up under the Great Lakes Trade Facilitation Project (GLTFP) to continue facilitating cross border trade beyond the timelines of the main project to boost trade. Busia and Malaba are among the border points where officials are stationed to assist traders, especially small-scale traders to use physical and modern ICT tools to make trade easier. The TIDOs also collect vital information on small scale cross-border trade which would otherwise be missed by Customs. Source: https://www.comesa.int/study-on-the-sustainability-of-trade-information-desk-underway [Republic of Moldova] The Republic of Moldova announced a new measure for Digitalization of the economy and public services, supported by a large number of ministries and government authorities, and also a new initiative to support in particular the digitalization of SMEs. It also launched a virtual platform for SMEs to facilitate e-commerce, to mitigate the effect of the disruption in supply chains during the COVID-19 pandemic. The Ministry of Economy and Infrastructure’s initiative to support digitalization of SMEs aims to expand their access to both the domestic and the global market. Source: UNECE, based on United Nations Global Survey on Digital and Sustainable Trade Facilitation, 2021. 30 Digital and sustainable trade facilitation: Global Report 2021 Figure 21 shows that although 80% of the countries a limited basis. Albeit the number of AEO Mutual have, to varying extents, introduced trade-related Recognition Agreements signed during past years information measures for SMEs, less than half of the has increased considerably, the position of SMEs countries surveyed have included SMEs in their vis-à-vis AEO has been recognized as a special case NTFCs. Measures that specifically target SMEs to and warrants attention. The entry barriers to SMEs’ overcome the challenges they face in trade such as AEO certification could be disadvantageous for the Facilities for SMEs access to Single Window, SMEs participation of SMEs in AEO certification and access to Authorized Economic Operator (AEO) diminish the effects of AEO benefits. There is a clear scheme, and other special measures for SMEs (such need to enhance AEO training for SMEs and to assist as the provision of deferred duty payment or their involvement in the AEO programmes, so that developing a specific action plan dedicated to trade they can contribute better to supply chain security, facilitation measures for SMEs) are carried out on integrity, and resilience. Figure 21. State of implementation of trade facilitation for SMEs measures globally Trade-related information measures for SMEs SMEs in National Trade Facilitation Committee Other special measures for SMEs SMEs access Single Window SMEs in AEO scheme 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 3.3.2 Agricultural trade facilitation measure. However, for other measures, the Pacific Islands are still lagging. Much of the agricultural trade in certain regions is informal trade and, as such, not captured formally. Figure 23 shows that many of the countries surveyed Targeting the agricultural sector, which represents a have, to some extent, implemented the measures considerable proportion of small-scale traders and under ‘Agriculture Trade Facilitation’ (see box 4 for SMEs, can also increase the positive impact of trade good practices). Priority treatment of perishable facilitation on sustainable development. Measures in goods is a core obligation provided by Article 7.9 of this sub-group are generally better implemented than the TFA. More than 80% of the countries have other measures in “Sustainable Trade Facilitation” implemented this measure on a pilot basis. Behind except for the measure for electronic application and border procedures, such as meeting SPS standards issuance of SPS certificates, which is also relevant and testing methods, are also critical for agricultural to paperless trade (figure 22). The swift movement products. Therefore, national standards and of trade goods may be more important for agricultural accreditation bodies to facilitate compliance with SPS products, especially perishable ones, than other standards as well as testing and laboratory facilities industrial products. Agriculture is the backbone available to meet SPS requirements of main trading industry of Pacific Island economies, which have partners measures have been implemented at least achieved a considerably good rate for the special on a pilot basis in more than 75% of the countries treatment for perishable goods at border-crossings surveyed, although implementation is mainly Implementation of trade facilitation measures: A closer look 31 Figure 22. Global implementation of agricultural trade facilitation measures in various regions Testing and laboratory facilities available to meet SPS of main trading partners 100% 80% 60% 40% 20% Special treatment for perishable goods 0% National standards and accreditation bodies to facilitate compliance with SPS Electronic application and issuance of SPS certificates Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org incomplete. The electronic application and issuance echoes findings of several cross-border paperless of SPS certificates is particularly challenging. Full trade readiness assessment studies that the implementation of this measure is only slightly over Customs are much more advanced than other 10%. This may be partly explained by the fact that trade-related government agencies in using the current common practices on the import side electronic and automated systems for facilitating remain for accepting only paper certificates. The low trade. SPS certificates are, in many countries, issued implementation level, when it comes to the electronic by agencies such as Ministries of Food and application and issuance of SPS certificates also Agriculture.17 Figure 23. State of implementation of agricultural trade facilitation measures globally Special treatment for perishable goods National standards and accreditation bodies to facilitate compliance with SPS Testing and laboratory facilities available to meet SPS of main trading partners Electronic application and issuance of SPS certificates 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 17 Readiness Assessment for Cross-border Paperless Trade country reports are available at https://www.unescap.org/resources/readiness- assessments-cross-border-paperless-trade 32 Digital and sustainable trade facilitation: Global Report 2021 Box 4. Good practices on agricultural trade facilitation National standards and accreditation bodies to facilitate compliance with SPS [India]: The Bureau of India Standards (BIS) has signed bilateral agreements with the national standards bodies of Afghanistan, Bhutan, Brazil, France, Germany, Israel, Mauritius, Nigeria, South Africa, the United Arab Emirates and the United States of America. BIS has also inked 21 Memorandums of Understanding (MoUs) in “standardization and conformity assessment”. BIS has also actively engaged in regional forums, such as the South Asia Regional Standards Organization (SARSO) and the Pacific Asia Standards Congress. Source: ADB, SASEC, 2020, Potential Exports and Non-Tariff Barriers to Trade: India National Study. Available at https:// www.adb.org/sites/default/files/publication/559296/india-exports-nontariff-barriers-trade-study.pdf see also: https://bis.gov.in/ index.php/standards/technical-information-services Special treatment for perishable goods [Bangladesh]: The National Board of Revenue (NBR) is finalizing a Statutory Regulatory Order to facilitate a faster release and disposal of perishable goods from ports. Customs will also be able to sell or transfer seized and unreleased perishable goods that could not be disposed of through auction due to various reasons to the State-owned agencies. Source: NBR to frame rules for quick release of perishables, Maritime Gateway, 25 August 2020. Available at https:// www.maritimegateway.com/nbr-frame-rules-quick-release-perishables/ Other agricultural trade facilitation measures [Peru] Peru has integrated 12 agriculture-related trade procedures into its Single Window. Measures include the sanitary authorization of an establishment dedicated to the primary processing of agricultural food and animal feed, the inspection and verification report for the importation of agricultural inputs, and the certificate of sale of primary agricultural food and animal feed, among others. Source: Available at https://elperuano.pe/noticia/126621-mincetur-brinda-mas-facilidades-para-empresas-del-sector-agropecuario [Paraguay] Paraguay has launched a new platform and mobile application, “INTN Servicios”, to enhance transparency and facilitate trade in agriculture products. It will also provide technical assistance to simplify, modernize and harmonize the processes for the export, import and transit of agricultural products in Paraguay. Source: Available at https://www.ip.gov.py/ip/intn-lanza-plataforma-y-aplicacion-movil-para-agilizar-procesos-comerciales/ 3.3.3 Women in trade facilitation facilitation (see box 5 for good practices). Measures include women membership in NTFC or similar body, Empowering women to engage in trade will lead to TF policy incorporating special consideration of stronger growth and a more prosperous society. women traders and TF measures benefiting women However, reducing gender inequality in trade involved in trade (i.e., training programmes in place facilitation is difficult because inequalities are to ensure equal access to trade and related job not explicitly declared in trade procedures. The opportunities). Figure 24 shows the global average COVID-19 pandemic has further magnified the level of implementation of three measures in inequalities experienced by many vulnerable and ‘Women in Trade Facilitation’ is somewhat limited disadvantaged communities, including women. (less than 40%). Developed economies are also Therefore, the inclusion of the gender dimension in facing significant challenges in implementing trade facilitation is essential, with a wide range of measures under this sub-group. solutions to reduce inequalities for women in trade Implementation of trade facilitation measures: A closer look 33 Figure 24. Global implementation of women in trade facilitation measures in various regions Trade facilitation policy/strategy incorporates special consideration of female traders 100% 80% 60% 40% 20% 0% Women’s membership in the National Trade Facilitation Committee or TF measures to benefit women similar bodies involved in trade Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and East Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Figure 25 shows that approximately 50% of countries. Implementation of all three measures the countries have implemented women membership is mostly on a partial and pilot basis, while full in NTFC or similar bodies and TF measures to implementation is very limited. There is a strong benefit women involved in trade. The measure indication that current policies are insufficient regarding how special consideration is given in to ensure women’s rights, and more efforts are trade facilitation policies/strategies of female needed to emphasize gender inequality in trade traders is only implemented in less than 40% of the facilitation. Figure 25. State of implementation of women in trade facilitation globally Women’s membership in the National Trade Facilitation Committee or similar bodies TF measures to benefit women involved in trade Trade facilitation policy/strategy incorporates special consideration of female traders 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 34 Digital and sustainable trade facilitation: Global Report 2021 Box 5. Good practices in women in trade facilitation Women membership in NTFC or similar bodies [Kiribati] National Women’s Organization namely Aia Mwaea Ainen Kiribati (AMAK), coordinates the women’s group under the direction of the National Council of Women. AMAK has representation in the National Trade Advisory Committee. Source: Country response in the Global Survey on Digital and Sustainable Trade Facilitation 2021 Trade facilitation strategy incorporates special consideration of female traders [India] The National Trade Facilitation Action Plan 2020-2023 promotes gender inclusiveness in trade. The Action Plan has conceptualized and developed a “Women in Global Business Program” that provides information, resources and mentoring programme to Indian businesswomen. Implementation of the action points under the NTFAP 2020-2023 has the following performance indicators: sharing of inclusiveness report; number of outreach programs conducted; and number of female members participating in Customs Clearance Facilitation Committee meetings Source: India NTFC, Implementation of Trade Facilitation Agreement: National Trade Facilitation Action Plan 2020-2023, available at https://www.cbic.gov.in/resources//htdocs-cbec/implmntin-trade-facilitation/NTFAP2020-23jk.pdf TF measures to benefit women involved in trade [Australia] The Australian Government supports developing countries in addressing trade barriers and integrating into the global trading system. The South Asia Regional Trade Facilitation Program (SARTFP) supported with Australian investment, promotes gender-sensitive trade facilitation, infrastructure connectivity, improved livelihoods, and enterprise development. It challenges the assumption that trade is gender neutral and demonstrates why gender equality matters in regional trade facilitation and infrastructure connectivity. The program implements initiatives that promote women’s participation in activities such as cross-border tourism, transport and infrastructure. It also includes initiatives that support female traders at selected land ports through public information campaigns on safety issues and education programs on trade legislation and their rights. Source: Australian Government Department of Foreign Affairs and Trade (2017) Australia Advancing Women’s Economic Empowerment Through Aid, Trade and Economic Diplomacy, available at https://www.dfat.gov.au/sites/default/files/australia- advancing-womens-economic-empowerment-aid-trade-economic-diplomacy.pdf [Kenya-Uganda] At the Busia border crossing, the needs of women traders addressed by installing sex-differentiated toilets, together with resting areas and dustbins, has helped to improve health and environmental conditions; constructing border markets for women traders – the vast majority of whom trade in agricultural goods – facilitates the selling and buying of goods at locations close to the border. Source: Asmita Parshotam and Samuel Balongo, 2020, Women traders in East Africa: The case study of the Busia One Stop Border Post, available at https://saiia.org.za/research/women-traders-in-east-africa-the-case-study-of-the-busia-one-stop-border- post/ Implementation of trade facilitation measures: A closer look 35 18 3.4 Implementation of digital 55% and 53%, respectively. In general, countries achieving higher implementation rates for “Digital versus sustainable trade Trade Facilitation” have also performed eminently in facilitation “Sustainable Trade Facilitation”, suggesting a highly positive correlation between the two groups. Overall, developed countries have performed better in both Digitalization and sustainability are the two digital and sustainable dimensions than less interrelated components of trade facilitation. Digital advanced countries. Most developed countries are transformation to (cross-border) paperless trade is positioned in quadrant I, where the digital and the key to sustainability, while sustainable trade sustainable implementation rates are above average. facilitation helps go reap the full development-related Most of the least developed countries fall into benefits from trade facilitation reforms. Given the quadrant III, where the implementation rates of both linkage of the “Digital Trade Facilitation” and are below average. Some developing countries, such “Sustainable Trade Facilitation”, it is necessary to as China and India, are among the best performers compare how countries have been implementing in sustainable trade facilitation, while the Republic of these two groups of trade facilitation measures. Korea and Singapore are top performers for both groups (figure 26). Figure 26 shows that the global average implementation rates for digital and sustainable are Figure 26. Implementation of digital and sustainable trade dimensions of trade facilitation 100% Ave sustainable TF = 53% New Zealand Singapore Australia 90% Belgium Mexico Korea (Rep. of)II I Japan Netherlands Ecuador Uruguay China Thailand India Spain Turkey 80% Morocco Canada Switzerland Argentina Chile Ireland Peru Estonia Costa Rica Indonesia Brazil Azerbaijan Panama Philippines United Kingdom Malaysia Norway 70% Italy Russian Federation Saudi Arabia Saint Kitts and Nevis Finland Lithuania Guatemala Georgia Dominican Republic Tunisia Kyrgyzstan Sweden 60% Mauritania Jordan Kazakhstan Serbia Armenia Avg digital TF = 55% El Salvador MontenegroViet Nam Cameroon 50% TogoLao PDR Zambia Sri Lanka Nepal Bangladesh Cote d'IvoireNigeria Albania Malawi Bahrain Namibia Burundi Trinidad and Tobago 40% Cuba Congo Lebanon Maldives Burkina FasoBelize Tanzania 30% BhutanTonga Bosnia and Herzegovina Egypt Mongolia Gabon Guinea Antigua & Barbuda Guinea - Bissau 20% Saint Vincent and the Guyana Timor Leste Tuvalu Comoros Grenadines Palestine Afghanistan Nauru 10% Ethiopia Somalia III IV South Sudan Iraq Kiribati 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sustainable trade facilitation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Note: For the sake of comparability, the study calculates implementation rate of sustainable trade facilitation by using data from 2 sub- groups, namely, ‘Trade Facilitation for SMEs’ and ‘Agricultural Trade Facilitation’. Rate of implementation is computed only if level of implementation (0-3) is available for all questions associating to both aforementioned sub-groups. For digital trade facilitation implementation, DK and NA are treated as zero and rate of implementation is calculated for all countries. 18 Data for Women in Trade Facilitation are not adequate enough to do an analysis. Therefore, it is excluded from calculating the implementation rate of the Sustainable Trade Facilitation group in this section. Digital trade facilitation 36 Digital and sustainable trade facilitation: Global Report 2021 3.5 Other trade facilitation successfully collected for some trade finance measures in more than 40% of the countries surveyed. The most implemented measure is variety 3.5.1 Trade finance facilitation of trade finance services available. Data suggest that at least some trade finance services are available in Trade finance has been a key catalyst in the about 80% of the countries for which data could be expansion of international trade during the past obtained. Fewer than 10 countries for which data are century. Access to trade finance is a key to available have fully implemented authorities engaged developing and including importers and exporters in in blockchain-based supply chain project covering regional and global supply chains. Given its trade finance and Single Window facilitates traders’ importance as an enabler of international trade access to finance. Customs in most countries are transactions,19 trade finance was incorporated for the taking the lead in developing Single Window systems first time into the 2019 survey on a pilot basis. It was to simplify trade procedures and expedite clearance. further updated and included in the 2021 Survey in However, financing payments for international collaboration with the ICC. trade transactions may fall outside the mandate of Customs. The high “don’t know” rates also reveal that Despite the importance of trade finance in boosting trade facilitation experts and officials who provided trade and the global economy, the global trade or validated the survey are often unfamiliar with trade finance gap before the COVID-19 pandemic was finance. The Single Window is an automated system estimated to be US$ 1.5 trillion, mainly affecting linking relevant agencies with different roles through SMEs in developing economies.20 In the wake of electronic means, whereas the connection of financial the pandemic, access to trade finance has become institutions (banks) and authorities (Foreign Exchange even more difficult and costly. The priorities are to Authorities etc.) may not be readily available in reduce trade costs for traders through easily available many countries. Survey results suggest a need trade finance channels and more efficient trade for greater coordination and cooperation between facilitation and logistics. border agencies and those involved in developing financial and payment services (see box 6 for good Interpretation of results under this sub-group is practices). subject to caution as information could not be Figure 27. State of implementation of trade finance facilitation measures globally Variety of trade finance services available Authorities engaged in blockchain-based supply chain project covering trade finance Single window facilitates traders access to finance 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 19 Trade finance enables the flow of money from buyer to seller and mitigation of associated risks, which greatly facilitates the flow of goods from seller to buyer. The flows of both money and goods are themselves enabled by the flow of data and documents between buyer and seller. 20 ADB, 2019, Trade finance gaps, growth and job survey, ADB Brief 113. Implementation of trade facilitation measures: A closer look 37 Box 6. Good practices in trade finance facilitation [Bangladesh] The Bangladesh Single Window supports banks in assessing information easily to support financing of exporters and importers. The Bangladesh Bank considers the Import Registration Certificate (IRC) and Export Registration Certificate (ERC) in order to easily identify traders applying for trade finance. Source: Country responses in the UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. [Singapore] The Singapore Customs Electronic Banker’s Guarantee (eBG) Programme was implemented in November 2020 to provide a BG with a more efficient lodgement process. Under the eGB Programme, a participating bank will seek the entity’s written consent of their clients, as the principal of the BG, in order to issue and digitally send the BG in electronic form (eBG) directly to Singapore Customs as soon as it is issued by the bank, instead of hardcopy BG. Source: Available at https://www.customs.gov.sg/businesses/new-traders-and-registration-services/registration-services/security- lodgement/electronic-bankers-guarantee-programme 3.5.2 Trade facilitation in times of crisis the 2021 survey, with a set of five measures covering both immediate crisis response and long-term The COVID-19 pandemic has revealed the fragility resilient measures. of global supply chains. Supply chain disruptions have had a devastating impact on global trade. Most of the countries for which data are available Against this background, the global community has have implemented, to some extent, the measures of widely recognized that keeping trade flowing is agencies in place to manage trade facilitation in times essential to saving lives.21 Since the outbreak of of crisis and emergencies, coordination between COVID-19, Governments, border agencies, logistics countries on emergency trade facilitation measures companies and traders have been exploring how they and online publication of emergency trade facilitation can leverage existing trade and transport facilitation measures. When it comes to long-term preparedness measures to keep goods moving across borders. The for a future crisis, only 23 countries have confirmed crisis has also stimulated the implementation of trade that they have a plan in place to facilitate trade during facilitation measures, especially when it comes to such a case. Another 36 countries have already digitalizing trade procedures (see box 7 for good started to explore (partially/on a pilot basis) how they practices). can set themselves on the right trajectory to resilient recovery and preparation for future crises. One of the Based on good practices identified in 2020, a short big lessons learnt is how to improve resource survey on “Trade Facilitation in Times of Crisis and allocation to better prepare for future crises beyond Pandemic” was designed and pilot-tested in the Asia COVID-19.23 This should be a policy priority for Pacific.22 Building upon it, a sub-group on ‘Trade countries that have not yet started making such Facilitation in Times of Crisis’ was incorporated into plans. 21 See Asia-Pacific Trade Facilitation Report 2021: Supply Chains of Critical Goods Amid the COVID-19 Pandemic — Disruptions, Recovery, and Resilience, available at https://www.unescap.org/kp/2021/APTF 22 ESCAP, 2021, Trade Facilitation in Times of Crisis and Pandemic: Practices and Lessons from the Asia Pacific Region, available at https://www.unescap.org/sites/default/d8files/knowledge-products/Regional%20report-Trade%20facilitation%20in%20 times%20of%20crisis%20and%20pandemic_0.pdf 23 Ibid. 38 Digital and sustainable trade facilitation: Global Report 2021 Figure 28. State of implementation of Trade Facilitation in Times of Crisis measures globally Agency in place to manage TF in times of crises and emergencies Coordination between countries on emergency TF measures Online publication of emergency TF measures Additional trade facilitation measures to facilitate trade in times of emergencies Plan in place to facilitate trade during future crises 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Box 7. Good practices in trade facilitation in times of crisis [Indonesia] To facilitate international trade during the COVID-19 pandemic, Indonesia intends to receive electronic/ scanned Phytosanitary Certificates from all countries. Indonesia also kindly requests trading countries to officially inform Indonesia about implementing electronic/scanned Phytosanitary Certificates for their products exported to Indonesia. Electronic certificates will be supported with access to validate the document. This aims to accelerate inspection works of import documents at entry points in Indonesia. In line with this measure, Indonesia kindly requested reciprocal measures from trading partner countries to receive the electronic/scanned Phytosanitary Certificate from Indonesia and has developed a technique for validating the certificate through the IAQA portal. Source: Available at https://ppkonline.karantina.pertanian.go.id/checkcert [Georgia] For ensuring business continuity and providing information to economic operators, the Revenue Service has used all possible communication channels as a 24/7 operated hotline, SMS, e-mail, website, Facebook and TV programmes. Information leaflets are published in Georgian, English, Turkish, Azeri, Russian and Armenian languages and provided to all truck drivers. The Government of Georgia has set up a website to inform the public of all measures taken. The Revenue Service website provides practical information for traders and travellers during the COVID-19 pandemic, including temporary trade facilitation measures. Source: Available at https://rs.ge/Covid19-en?cat=1&tab=1 [India] A centralized helpdesk for COVID-19 response to trade was established by the Central Board of Indirect Taxes and Customs (CBIC). COVID-19 Helpdesk for “International Trade Issues” was also established on 26 March 2020 by the Directorate-General of Foreign Trade for extending immediate support to the trading community. Of 1,300 requests received by the helpdesk more than 900 were resolved. In the face of COVID-19, India has implemented an E-delivery PDF-based Gatepass, and Out of Charge copy of the Bill of Entry (BoE) to custom brokers/ importers across India to support and expedite the contact-less Customs clearance process. A machine-based automated release of import consignments has also been launched across India. Sources: Available at https://www.cbic.gov.in/resources//htdocs-cbec/Indian-Customs-Fighting-COVID-19-summary.pdf; Paperless Customs – Electronic Communication of PDF based Gatepass, and OOC Copy of Bill of Entry to Custom Brokers/Importers, available at https://www.cbic.gov.in/resources/htdocs-cbec/customs/cs-circulars/cs-circulars-2020/Circular-No-19-2020.pdf Implementation of trade facilitation measures: A closer look 39 Box 7. (continued) [Australia] Australia introduced temporary alternative arrangements to use original paper import certificates for a range of imported plant-based, animal, biological and animal-based goods. Where an importer is unable to supply the original paper document from the exporting country as a result of the COVID-19 pandemic, the electronic copy is accepted. Following the outbreak, in January 2020, the “Human coronavirus with pandemic potential” became a “listed human disease” by the legislative instrument under the Biosecurity Act. In accordance with subsection 477(1) of the Act, the Health Minister has made the Biosecurity (Human Biosecurity Emergency) (Human Coronavirus with Pandemic Potential) (Essential Goods) Determination 2020 (the Determination), which clearly defines “essential goods” and prohibits the practice of price gouging, and imposes requirements to ensure that those who breach relevant restrictions surrender these goods to law enforcement. Sources: Department of Agriculture, Water and the Environment Australia, available at https://www.agriculture.gov.au/import/ industry-advice/2020/97-2020; Australia Federal Register of Legislation, Explanatory Statement, available at https:// www.legislation.gov.au/Details/F2020L00355/Explanatory%20Statement/Text [Azerbaijan, Kazakhstan, Republic of Moldova] In March/April 2020, the Republic of Moldova adopted measures with regard to public digital signatures. Azerbaijan set up services to verify the authenticity of digitally signed documents, one of the earliest of its kind in their subregion. As part of the Law on Consumer Protection in Kazakhstan, the Government plans to launch a unified platform for receiving complaints from consumers based on the Single Window principle. Source: ECE (2021) Regional Report on Post-Pandemic Recovery: E-commerce and Trade Facilitation, available at https:// unece.org/sites/default/files/2021-04/ECE_TRADE_C_CEFACT_2021_15E_RegReport-eCommerceTF.pdf [Botswana and Zambia] The two countries cooperated in clearing traffic, which had built up at Kazungula during the first week that member States implemented national COVID-19 measures, by joint clearance and collaboration between border agencies as well as the use of a temporary construction bridge. Source: SADC, 2020, SADC Regional Response to COVID-19 Pandemic, Bulletin No. 6. [Kenya] According to the COVID-19 Supply Chain and Markets Update of 5 June 2020 by the World Food Programme’s Kenya Country Office, four of the eight assessed customs border stations reported completely normal operations, i.e., Busia (Kenya–Uganda), Lokichogio (Kenya – South Sudan), Moyale (Kenya – Ethiopia) and Lunga Lunge (Kenya – United Republic of Tanzania). For example, the Kenyan Ministry of Health sent a taskforce to the Webuye-Malaba highway to collect samples from queuing truck drivers. The samples are taken to either Moi Teaching Referral Hospital in Eldoret or Kisumu District Hospital for test results that require between 24 and 48 hours to process. This has reduced the length of the queues. An accelerated lane for truck drivers with a valid COVID-19 certificate has also been created, and the movement of inbound trucks into Kenya has been completely cleared. Source: WFP, 2020, Kenya Country Office, COVID-19 Supply Chain and Markets Update, 5 June 2020. [Kyrgyzstan] To combat and respond to the consequences of the COVID-19 pandemic, the Government of Kyrgyzstan has taken several measures. Among others, it established the State Council to implement economic measures to minimize the consequences of external shocks and stimulate economic development. A “green corridor” was created for imports of food and essential goods. Customs barriers, inspections and cost controls have been eliminated. As part of the “Plan of Measures” of 6 May 2020, the Government created an anti-crisis fund to subsidize domestic entrepreneurs, especially export-oriented companies. In addition, within the framework of the Act, “Towards New Economic Freedom and Development”, adopted on 30 April 2020, the long-term activities include simplifying the procedure and reducing the time for inspections by 2.5 to 3 times. Source: National Trade Facilitation Roadmap of the Kyrgyz Republic, 2021-2025, available at https://unece.org/sites/default/ files/2021-06/ECE_TRADE_464E.pdf 40 Digital and sustainable trade facilitation: Global Report 2021 Box 7. (continued) [European Commission] The European Commission has issued guidance on Customs issues related to the COVID-19 emergency in order to provide solid and practical solutions for all stakeholders in such exceptional circumstances and to ensure a uniform application of the Union Customs Code (UCC) even during this time of crisis. Source: Available at https://ec.europa.eu/taxation_customs/business/covid-19-customs-guidance-trade_en#heading_6EU [Collective Response] As part of the collective response to combat COVID-19, Australia, Brunei Darussalam, Canada, Chile, the People’s Republic of China, the Lao People’s Democratic Republic, the Republic of the Union of Myanmar, Nauru, New Zealand, Singapore, the United Arab Emirates and Uruguay have jointly committed to keep supply chains open and to remove any restrictive trade measures on essential goods, especially medical supplies. Source: https://www.mfat.govt.nz/en/trade/covid-19-and-trade/ [Collective Response] To build resilience and safeguard from a future crisis, the Green Corridor has been formed between CEFTA/Western Balkan region and the European Union member States to support trade and transport facilitation and ensure a fast flow of goods during the COVID-19 pandemic and beyond. Some crossing points at which Customs and other inspection agencies are present, have been designated as points at which the traffic flow of all essential goods is guaranteed 24/7, forming the so-called “Green Corridor” in the region. Prioritized movement of essential goods is secured through electronic dissemination of pre-arrival information within the IT system named “System of Electronic Exchange of Data” (SEED) used in the whole region. Source: https://www.wb6cif.eu/2021/04/27/establishment-of-green-corridors-between-cefta-wb6-and-eu-member-states/ [COMESA] On 14 May 2020, Ministers responsible for commerce, trade and industry in the COMESA region agreed on guidelines to facilitate coordination and uniform application of measures across borders while ensuring public safety and safe trade. The Ministers agreed that the guidelines would be applicable during the COVID-19 pandemic period and reviewed as and when necessary. This has led to tripartite guidelines trade and transport facilitation adopted in July 2020, harmonising best practices in movement of goods and people across three regions: COMESA, the East African Community (EAC), and the South African Development Community (SADC). The African Union Commission has further built upon the success of this harmonisation to issue and adopt continental guidelines to facilitate free and timely flow of cross-border trade during the pandemic. Sources: Common Market for Eastern and Southern Africa, 2020, Guidelines for the Movement of Goods and Services Across COMESA Region During the COVID-19 Pandemic, 10 June 2020. Available at www.comesa.int/wpcontent/uploads/2020/06/ Guidelines-for-the-Movement-of-Goods-Services-Across-COMESARegion.pdf ; https://covid.comesa.int/wp-content/uploads/2021/ 06/TRIPARTITE-GUIDELINES-29-JULY-2020-signed-Aug-2020.pdf ; https://www.uneca.org/storys/africa%E2%80%99s-customs- chiefs-commit-implementing-new-continental-covid-19-trade-facilitation Conclusion and the way forward 41 4 Conclusion and the way forward This report presents data on trade facilitation and paperless trade implementation from 144 countries around the world. The survey covers the implementation of general trade facilitation measures, including many of those featured in the TFA, as well as advanced ICT-based measures, sustainable trade facilitation measures catering to the special needs of SMEs, the agricultural sector, women and other measures that link trade finance and trade facilitation measures supporting inclusive and resilient trade. Figure 29 confirms the strong negative relationship between international trade costs and the implementation of general and digital trade facilitation measures (also see box 8 for the impact of digital trade facilitation measures in trade cost reduction). In turn, based on the data collected, a strong positive relationship can be observed between logistics performance and trade facilitation implementation (figure 30). The global average trade facilitation implementation rate stands at 64.7%. Most countries across the globe have implemented general trade facilitation measures to improve transparency, expedite and streamlining formalities, and develop adequate institutional frameworks. This reflects the country commitments to implementing the WTO TFA.24 The report reveals that most countries have been actively 24 A total of 17 of the 31 common measures discussed in this report can be directly related to TFA commitments (both binding and non-binding). This implies that the minimum implementation rate that an economy would need to achieve to be fully compliant with the TFA stands at almost 55% (17/31=54.8%). See also Annex 5 on the state of implementation of WTO TFA-related measures. 42 Digital and sustainable trade facilitation: Global Report 2021 Figure 29. Trade facilitation implementation and trade costs 500% 400% 300% 200% 100% R2 = 0.5358 0% 0% 20% 40% 60% 80% 100% 120% Trade facilitation implementation Source: ESCAP-World Bank Trade Cost Database and the UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Figure 30. Trade facilitation implementation and logistics performance 5.0 4.5 4.0 3.5 R2 = 0.5356 3.0 2.5 2.0 1.5 1.0 0% 20% 40% 60% 80% 100% 120% Trade facilitation implementation Source: World Bank Logistics Performance Index 2018 and the UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Trade costs, excluding tariff (ad valorem equivalent) Logistics performance index: 2016 (1 = worst performer; 5 = best performer) Conclusion and the way forward 43 Box 8. Assessing the impact of trade facilitation Based on the survey data presented above, the impact of the implementation of trade facilitation measures on trade costs is estimated. Following ADB/ESCAP (2021), two econometric models are estimated to quantify the potential effects of different groups of trade facilitation measures (general and digital trade facilitation measures, as defined in table 2) on trade costs. Model 1 captures the impact of the overall implementation rate of 31 main trade facilitation measures, while model 2 separates general and digital trade facilitation measures. Results are presented in table 4. The estimated trade cost reductions are calculated based on all countries considered achieving different levels of trade facilitation implementation. The first two levels include partial and full implementation of only binding trade facilitation measures under WTO TFA, while the following two levels assume partial or full implementation of both binding and non-binding WTO TFA measures. The third level goes beyond the WTO TFA measures, with additional paperless and cross-border paperless trade facilitation measures implemented.25 Model 1 shows that the implementation of WTO TFA binding measures only leads to a limited decrease in trade cost, with a 3.76% reduction when full implementation is achieved. This limited impact is explained by the fact that many countries have already implemented these measures. Non-binding measures under WTO TFA still have the potential to facilitate trade further and reduce unnecessary trade costs, as reflected by the moderate decreases in trade costs of 2.96% and 6.78% when partially and fully implemented, respectively. The most significant change in trade costs is estimated when paperless and cross-border paperless trade measures are incorporated into the scope of trade facilitation efforts, as the trade cost reductions reach 7.62% and 13.47%, respectively. Indeed, model 2 confirms that digital trade facilitation measures serve as a greater catalyst for trade cost reduction than general measures do. Table 4. Changes in trade costs resulting from the implementation of trade facilitation and paperless trade (per cent) WTO TFA+ (binding + WTO TFA WTO TFA non-binding + other Global: trade (binding only) (binding + non-binding) paperless and cross-border costs model paperless trade) Partially Fully Partially Fully Partially Fully implemented implemented implemented implemented implemented implemented Model 1 Overall trade -1.52 -3.76 -2.96 -6.78 -7.62 -13.47 facilitation Model 2 General trade -0.55 -1.34 -0.89 -2.09 -1.06 -2.33 facilitation measures Digital trade -1.27 -2.42 -8.13 -12.54 facilitation measures Source: ADB/ESCAP, 2021, Asia-Pacific Trade Facilitation Report 2021. Figure 31 presents estimated trade cost reductions in various regions. Noticeably, differences in levels of trade cost reductions are pronounced, especially in the third scenario when paperless and cross-border paperless trade measures are implemented. Full implementation under WTO TFA + scenario, on average, could reduce trade costs 25 In the partial implementation scenario, all countries who have not yet implemented any of the considered facilitation measures or are currently at the pilot stage, act and achieve at least partial implementation of these measures. In the full implementation scenario, all countries that have not yet fully implemented any of the considered trade facilitation measures act and achieve full implementation. 44 Digital and sustainable trade facilitation: Global Report 2021 Box 8. (continued) by 13 percent, ranging from 7 percent in Developed Economies to 26 percent in Pacific Islands. The varying extent of trade cost gains suggests that there is considerable room for improvement in terms of trade facilitation, such as streamlined processes and interoperability between Customs, among others. These improvements require strong cooperation between countries, which could be supported by regional initiatives such as the Framework Agreement on Facilitation on Cross-Border Paperless Trade in Asia and the Pacific. Figure 31. Impact of trade facilitation implementation on trade costs in various regions South and East Europe, Latin America Middle East Global Pacific Sub-Saharan Caucasus and and the and South-East Developed Average Islands South Asia Africa Central Asia Caribbean North Africa and East Asia Economies 0% -5% -3% -5% -6% -6%-7% -7% -10% -8% -11% -11% -12% -12% -15% -13% -13% -13% -20% -18% -21% -20% -25% -26% -30% Effect of implementation of WTO TFA binding + non-binding + other paperless trade measures Effect of implementation of WTO TFA binding + non-binding measures Effect of implementation of WTO TFA binding measures Source: United Nations Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org engaged in implementing measures to facilitate trade, global average implementation level of ‘Cross-Border despite the ongoing disruptions that COVID-19 Paperless Trade’ remains substantially lower than the pandemic put on international trade. As a result, the other trade facilitation sub-groups considered in the global average implementation rate has increased by survey. However, significant progress has been made approximately 5 percentage points compared with the in ‘Cross-Border Paperless Trade’ during the past two 2019 survey result, suggesting a stable upward trend years. For example, the ASEAN Single Window has during the pandemic.26 progressively expanded its scope and coverage during the pandemic, including more partners and While the global average implementation of enabling the exchange of more trade documents. ‘Paperless Trade’ measures has exceeded 60%, the That said, the implementation of ‘Cross-Border 26 The evolution is calculated based on the common 88 countries that participated in both the 2017 and 2019 surveys. The average implementation rate of those 88 countries in 2017 and 2019 was 56.3% and 64.4%, respectively. Partial implementation Full implementation Partial implementation Full implementation Partial implementation Full implementation Partial implementation Full implementation Partial implementation Full implementation Partial implementation Full implementation Partial implementation Full implementation Partial implementation Full implementation Partial implementation Full implementation Conclusion and the way forward 45 Paperless Trade’ remains largely incomplete in many implementation of trade facilitation as a step-by-step regions and countries. This is not surprising given process,28 based on the groups of measures included that, on one hand, many developing countries are at in this survey. Trade facilitation begins with the setting an early stage of developing paperless systems. On up of the institutional arrangements needed to the other hand, more advanced countries face prioritize and coordinate the implementation of trade challenges in changing their existing systems for facilitation measures. The next step is to make trade readily interoperable ones. In that regard, given the processes more transparent by sharing information large potential benefits associated with the cross- on existing laws, regulations and procedures border digitalization of trade procedures – amounting as widely as possible, and consulting with to US$600 billion for the Asia-Pacific region alone.27 stakeholders when developing new ones. Designing It is in the interest of all countries to work together and implementing simpler and more efficient and develop the regulatory framework and technical trade formalities is next. The re-engineered and protocols needed for the seamless exchange of streamlined processes may first be implemented trade-related data and documents in electronic form based on paper documents but can then be further along the international supply chain. improved through information and communications technologies and the development of paperless trade While new technologies such as blockchains can systems. help, strong political will and intergovernmental cooperation are essential to making real progress. Sustainable and digital are highly correlated Efforts in this regard include the Framework dimensions of trade facilitation. When it comes to Agreement of the Pacific Alliance (which covers trade “Sustainable Trade Facilitation”, the implementation facilitation and Customs cooperation), the expansion of inclusive measures to promote SMEs and the of the ASEAN Single Window Agreement, the participation of women in trade remains low. SMEs Framework Agreement on Facilitation of Cross- represent about 90% of businesses and more than border Paperless Trade in Asia and the Pacific, and 50% of employment worldwide,29 yet trade facilitation the African Continental Free Trade Area (AfCFTA) measures tailored to SMEs are insufficient. SMEs are Agreement – which apart from removing tariffs on still facing disproportionate barriers to trade due to 90% of goods and services – requires the member inadequate access to digital infrastructure, insufficient States to implement trade facilitation reforms to IT skills and a lack of financial resources. This is remove non-tariff barriers and harmonize some of particularly the case in the context of COVID-19.30 these areas. These initiatives promote the exchange Recommendation 33 of UN/CEFACT recognizes the and mutual recognition of trade data and documents significance of the single window for trade generally in electronic form and strengthen the compatibility and SMEs specifically. Facilitation for AEOs is also between national and subregional paperless trade one of the two TFA measures that specifically systems. They will further enrich the cooperation in mention SMEs. Therefore, building the capacity of trade facilitation, enhance trade connectivity and SMEs and taking them into account in trade contribute to faster post-COVID-19 economic facilitation policies are of critical importance in recovery. achieving sustainable trade facilitation. Moving forward, digitalization offers immense Similarly, there is a lack of awareness regarding the potential for improving trade facilitation implementation importance of gender mainstreaming in trade and further reducing trade costs. Figure 32 shows the facilitation. Guiding women in understanding trade 27 See, ESCAP, 2017, Digital Trade Facilitation in Asia and the Pacific. Available at https://www.unescap.org/publications/digital-trade- facilitation-asia-and-pacific-studies-trade-investment-and-innovation-87 28 This step-by-step process is based on, and generally consistent with the UN/CEFACT step-by-step approach to moving trade facilitation towards a Single Window environment. In practice, however, trade facilitation measures are often very much interrelated across borders. It is not necessary to implement all measures in one category before moving to the next and, as explained in UNNExT Brief No.17 (see https://unnext.unescap.org). Much time and cost can be saved by adopting a more integrated approach based on a long-term vision. 29 ITC, 2021, SME Competitiveness Outlook: Empowering the Green Recovery. 30 WTO, 2020, World Trade Report 2020: Government policies to promote innovation in the digital age, available at https://www.wto.org/ english/res_e/booksp_e/wtr20_e/wtr20_e.pdf 46 Digital and sustainable trade facilitation: Global Report 2021 Figure 32. Moving up the trade facilitation ladder towards seamless international supply chains Cross-border paperless trade 100 Paperless trade 80 60 Formalities 40 Transparency Institutional 20 arrangement and cooperation 0 Performance area Frontier (full implementation) Global Average Developed Economies Latin America and the Caribbean Middle East and North Africa Pacific Islands South and Europe, Caucasus and Central Asia South Asia South-East and East Asia Sub-Saharan Africa Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Note: Figure 31 shows global cumulative trade facilitation implementation scores for different regions for five groups of trade facilitation measures included in the survey. The scores are based on the equally weighted implementation of 31 trade facilitation measures, but the number of measures varies in each of the five groups. Full implementation of all measures = 100. procedures, setting guidelines for standards bodies times of crisis, trade facilitation strategies should be to ensure a more balanced representation of the designed in a more holistic and inclusive manner. interests of women and men, and promoting the participation and decision-making of women in trade The availability and adequate provision of trade facilitation and standards-related activities, could finance is essential for a healthy trading system. This have a significant impact on increasing exports is particularly true for developing economies and and enabling women to achieve higher income SMEs seeking to benefit from trade opportunities. opportunities.31 Given the importance of these groups However, in the wake of the COVID-19 pandemic, with special needs in achieving sustainable and access to trade finance has become more difficult inclusive development of economies, particularly in and costly. Awareness of trade finance processes 31 ECE, 2017, Briefing note on the contribution of UN/CEFACT to United Nations Sustainable Development Goal 5, Executive Committee, Centre for Trade Facilitation and Electronic Business, twenty-third session. Conclusion and the way forward 47 appears to be limited among trade policy and trade countries are not sufficiently prepared at the national facilitation specialists. Therefore, trade facilitation or regional levels, especially when it comes to policymakers need to work together with stakeholders long-term measures for a resilient recovery. It is in the financial sector to see how trade finance can imperative for regional connectivity to be enhanced be made more easily available and integrated into through coordinated trade facilitation actions at trade facilitation implementation strategies, including this pivotal time. Continued and sustained efforts Single Window development plans. should be made to further enhance cooperation, make trade information transparent, and strengthen Last, the COVID-19 pandemic has undoubtedly countries’ capacity to contribute to recovery and exposed the weaknesses of the global trading prepare adequately for future crises. This includes system. Results of the newly incorporated Trade the climate crisis, in which trade facilitation certainly Facilitation in Times of Crisis group show that has a mitigating role to play.32 32 Duval and Hardy, 2021, A primer on quantifying the environmental benefits of cross-border paperless trade facilitation., ESCAP Working Paper No. 206. Available at https://artnet.unescap.org/publications/working-papers/primer-quantifying-environmental-benefits-cross-border- paperless-trade 48 Digital and sustainable trade facilitation: Global Report 2021 Annexes Annex 1. Definitions of the various stages of implementation Stage of implementation Coding/Scoring Full implementation: The trade facilitation measure implemented is in full compliance 3 with commonly-accepted international standards, recommendations and conventions such as the Revised Kyoto Convention, UN/CEFACT Recommendations, or the WTO Trade Facilitation Agreement (TFA); it is implemented in law and practice; it is available to essentially all relevant stakeholders nationwide, and supported by adequate legal and institutional frameworks as well as adequate infrastructure and financial and human resources. A TFA provision included in the commitments given under Notifications of Category A may generally be considered as a measure that is fully implemented by the country, with a caveat that the provision will be implemented by a Least-Developed Country (LDC) member within one year of the TFA agreement coming into force. If a country registers a positive response for all sub-questions concerning a given trade facilitation measure, that measure should be considered fully implemented. Partial implementation: A measure is considered to be partially implemented if at least 2 one of the following is true: (1) the trade facilitation measure is in partial – but not in full – compliance with commonly-accepted international standards, recommendations and conventions; (2) the country is still in the process of rolling out the implementation of the measure; (3) the measure is being used but on an unsustainable, short-term or ad-hoc basis; (4) the measure is implemented in some – but not all – targeted locations (such as key border crossing stations); or (5) some – but not all – targeted stakeholders are fully involved. Pilot stage of implementation: A measure is considered to be at the pilot stage of 1 implementation if, in addition to meeting the general attributes of partial implementation, it is available only to a very small portion of the intended stakeholder group (or at a certain location), and/or is being implemented on a trial basis. When a new trade facilitation measure is at the pilot stage of implementation, the old measure is often continuously used in parallel to ensure that the service is still provided even when there has been a disruption with the new measure. This stage of implementation also includes relevant rehearsals and preparation for the full implementation. Not implemented: A measure has not been implemented at this stage. However, this 0 stage may still include initiatives or efforts towards implementation of the measure. For example, under this stage, (pre)feasibility studies or planning for the implementation can be carried out; and consultation with stakeholders on the implementation may be arranged. Annexes 49 Annex 2. Groupings of countries with special needs The following countries are included in the three groups of countries with special needs considered in the survey.32 Least Developed Economies (30): Afghanistan, Bangladesh, Bhutan, Burkina Faso, Burundi, Cambodia, Comoros, Ethiopia, Guinea, Guinea -Bissau, Kiribati, the Lao People’s Democratic Republic, Madagascar, Malawi, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Senegal, Sierra Leone, Solomon Islands, Somalia, South Sudan, Sudan, Timor-Leste, Togo, Tuvalu and Zambia. Landlocked Developing Countries (24): Afghanistan, Armenia, Azerbaijan, Bhutan, Botswana, Burkina Faso, Burundi, Ethiopia, Kazakhstan, Kyrgyzstan, the Lao People’s Democratic Republic, Malawi, Republic of Moldova, Mongolia, Nepal, Niger, Paraguay, North Macedonia, Rwanda, South Sudan, Tajikistan, Uzbekistan, Zambia, Zimbabwe. Small Island Developing States (26): Antigua and Barbuda, Bahrain, Belize, Cabo Verde, Cuba, Dominican Republic, Fiji, Guinea-Bissau, Guyana, Kiribati, Maldives, Mauritius, Micronesia, Nauru, Palau, Papua New Guinea, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Samoa, Singapore, Solomon Islands, Timor-Leste, Tonga, Trinidad and Tobago, Tuvalu and Vanuatu. 32 More details are available at http://unohrlls.org/ 50 Digital and sustainable trade facilitation: Global Report 2021 Annex 3. Trade facilitation implementation by countries in different groups (%) Figure 33. Average implementation rates of trade facilitation measures in developed economies 100% 80% 60% 40% 20% 0% Transparency Formalities Institutional arrangement Paperless trade Cross-border paperless trade and cooperation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Figure 34. Average implementation rates of trade facilitation measures in Latin America and the Caribbean 100% 80% 60% 40% 20% 0% Transparency Formalities Institutional arrangement Paperless trade Cross-border paperless trade and cooperation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Andorra Antigua & Barbuda Australia Argentina Austria Belize Belgium Bulgaria Brazil Canada Chile Croatia Cyprus Colombia Czechia Costa Rica Estonia Cuba Finland France Dominican Republic Germany Ecuador Greece Hungary El Salvador Ireland Guatemala Italy Guyana Japan Lithuania Mexico Luxembourg Panama Malta Paraguay Netherlands New Zealand Peru Norway Saint Kitts and Nevis Poland Saint Vincent and the Portugal Grenadines Spain Trinidad and Tobago Sweden Uruguay Switzerland Latin America and the United Kingdom Caribbean Developed Economies Annexes 51 Figure 35. Average implementation rates of trade facilitation measures in the Middle East and North Africa 100% 80% 60% 40% 20% 0% Transparency Formalities Institutional arrangement Paperless trade Cross-border paperless trade and cooperation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Figure 36. Average implementation rates of trade facilitation measures in the Pacific Islands 100% 80% 60% 40% 20% 0% Transparency Formalities Institutional arrangement Paperless trade Cross-border paperless trade and cooperation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Fiji Bahrain Kiribati Egypt Iran, Islamic Micronesia Republic of Nauru Iraq Palau Jordan Papua New Guinea Lebanon Samoa Morocco Solomon Islands Palestine Tonga Saudi Arabia Tuvalu Syria Vanuatu Tunisia Middle East and Pacific Islands North Africa 52 Digital and sustainable trade facilitation: Global Report 2021 Figure 37. Average implementation rates of trade facilitation measures in South and East Europe, Caucasus and Central Asia 100% 80% 60% 40% 20% 0% Transparency Formalities Institutional arrangement Paperless trade Cross-border paperless trade and cooperation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Figure 38. Average implementation rates of trade facilitation measures in South Asia 100% 80% 60% 40% 20% 0% Transparency Formalities Institutional arrangement Paperless trade Cross-border paperless trade and cooperation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Albania Afghanistan Armenia Azerbaijan Bangladesh Belarus Bosnia and Herzegovina Bhutan Georgia Kazakhstan India Kyrgyzstan Republic of Moldova Maldives Montenegro North Macedonia Nepal Russian Federation Serbia Pakistan Tajikistan Turkey Sri Lanka Ukraine Uzbekistan South Asia South and East Europe, Caucasus and Central Asia Annexes 53 Figure 39. Average implementation rates of trade facilitation measures in South-East and East Asia 100% 80% 60% 40% 20% 0% Transparency Formalities Institutional arrangement Paperless trade Cross-border paperless trade and cooperation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Figure 40. Average implementation rates of trade facilitation measures in Sub-Saharan Africa 100% 80% 60% 40% 20% 0% Transparency Formalities Institutional arrangement Paperless trade Cross-border paperless trade and cooperation Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Burkina Faso Botswana Brunei Darussalam Burundi Cabo Verde Cambodia Cameroon Comoros China Congo Cote d’Ivoire Indonesia Equatorial Guinea Ethiopia Lao PDR Gabon Guinea Guinea - Bissau Malaysia Kenya Madagascar Mongolia Malawi Mauritania Myanmar Mauritius Mozambique Philippines Namibia Niger Republic of Korea Nigeria Rwanda Singapore Senegal Sierra Leone Somalia Thailand South Sudan Sudan Timor Leste Togo Zambia Viet Nam Zimbabwe Tanzania South-East and East Asia Sub-Saharan Africa 54 Digital and sustainable trade facilitation: Global Report 2021 Annex 4. Trade facilitation implementation: Full dataset versus limited dataset To track the progress made by countries in implementing trade facilitation measures since 2019, the analysis was limited to 128 countries that participated in both the 2019 and 2021 surveys (tables 5). It was also checked whether the implementation rates of these 128 countries are a good representation of the entire dataset (144 countries). Table 6 shows that the difference is minor, indicating that these 128 countries were good representatives of the survey results of the 2021 survey. Table 5. Breakdown of countries that participated in the 2019 and 2021 survey South and East Europe, Latin America and South-East and Developed Economies Caucasus and Central the Caribbean East Asia Asia 1 Andorra* 1 Antigua & Barbuda 1 Albania 1 Brunei Darussalam 2 Australia 2 Argentina 2 Armenia 2 Cambodia 3 Austria 3 Belize 3 Azerbaijan 3 China 4 Belgium 4 Brazil 4 Belarus 4 Indonesia Bosnia and 5 Bulgaria 5 Chile 5 5 Lao PDR Herzegovina 6 Canada 6 Colombia 6 Georgia 6 Malaysia 7 Croatia 7 Costa Rica 7 Kazakhstan 7 Mongolia 8 Cyprus 8 Cuba* 8 Kyrgyzstan 8 Myanmar 9 Czechia 9 Dominican Republic 9 Republic of Moldova 9 Philippines 10 Estonia 10 Ecuador 10 Montenegro 10 Republic of Korea 11 Finland 11 El Salvador 11 North Macedonia 11 Singapore 12 France 12 Guatemala 12 Russian Federation 12 Thailand 13 Germany 13 Guyana 13 Serbia 13 Timor-Leste 14 Greece 14 Mexico 14 Tajikistan 14 Viet Nam 15 Hungary 15 Panama 15 Turkey 16 Ireland 16 Paraguay 16 Ukraine 17 Italy 17 Peru 17 Uzbekistan Saint Vincent and 18 Japan 18 the Grenadines 19 Lithuania 19 Trinidad and Tobago 20 Luxembourg* 20 Uruguay* 21 Malta 21 Saint Kitts and Nevis* 22 Netherlands 23 New Zealand 24 Norway 25 Poland Annexes 55 Table 5. (continued) Developed Economies Pacific Islands South Asia Sub-Saharan Africa 26 Portugal 1 Fiji 1 Afghanistan 1 Botswana 27 Spain 2 Kiribati 2 Bangladesh 2 Burkina Faso* 28 Sweden 3 Micronesia 3 Bhutan 3 Burundi* 29 Switzerland 4 Nauru 4 India 4 Cabo Verde* 30 United Kingdom 5 Palau 5 Maldives 5 Cameroon 6 Papua New Guinea 6 Nepal 6 Comoros 7 Samoa 7 Pakistan 7 Congo 8 Solomon Islands 8 Sri Lanka 8 Cote d’Ivoire 9 Tonga Middle East and 9 Equatorial Guinea* 10 Tuvalu North Africa 10 Ethiopia 11 Vanuatu 1 Bahrain* 11 Gabon 2 Egypt 12 Guinea 3 Iran (Islamic Rep. of) 13 Guinea - Bissau 4 Iraq 14 Kenya* 5 Jordan 15 Madagascar 6 Lebanon* 16 Malawi 7 Morocco 17 Mauritania 8 State of Palestine* 18 Mauritius 9 Saudi Arabia 19 Mozambique 10 Syrian Arab Republic 20 Namibia 11 Tunisia 21 Niger* 22 Nigeria* 23 Senegal 24 Sierra Leone 25 Somalia 26 South Sudan 27 Sudan 28 Rwanda* 29 Togo 30 Tanzania 31 Zambia 32 Zimbabwe * Note: these countries participated in the 2021 survey but not in 2019 survey. 56 Digital and sustainable trade facilitation: Global Report 2021 Table 6. Comparison of regional average – full versus limited dataset South Latin Middle and East Developed America East and Pacific Europe, South South- Sub- Global 2021 data Economies and the North Islands Caucasus Asia East and Saharan Average Caribbean Africa and Central East Asia Africa Asia Limited sample (128) 83.7% 71.7% 63.3% 40.1% 68.8% 58.5% 75.3% 49.6% 66.1% Full sample (144) 81.8% 72.1% 58.7% 40.1% 68.8% 58.5% 75.3% 49.1% 64.7% Annexes 57 Annex 5. Implementation stages of selected WTO TFA-related measures globally Figure 41. Implementation stages of selected WTO TFA-related measures in general trade facilitation and paperless trade globally Art. 7.4: Risk management Art. 7.3: Separation of Release from final determination of customs duties, taxes, fees and charges Art. 2.2: Stakeholders' consultation on new draft regulations (prior to their finalization) Art. 4: Independent appeal mechanism Art. 1.2: Publication of existing import-export regulations on the internet Art. 8: National legislative framework and/or institutional arrangements for border agencies cooperation Art. 7.5: Post-clearance audits Art. 23: National Trade Facilitation Committee or similar body Art. 7.1: Pre-arrival processing Art. 2.1: Advance publication/notification of new trade-related regulations before their implementation Art. 3: Advance ruling on tariff classification and origin of imported goods Art. 7.7: TF measures for authorized operators Art. 10.2: Acceptance of copies of original supporting documents required for import, export or transit formalities Art. 7.8: Expedited shipments Art. 7.2: E-Payment of Customs Duties and Fees Art. 7.9: Special treatment for perishable goods Art. 7.6: Establishment and publication of average release times Art. 10.4: Electronic Single Window System 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org 58 Digital and sustainable trade facilitation: Global Report 2021 Figure 42. Implementation stages of selected WTO TFA-related measures in transit facilitation globally Art. 10.5: Limit the physical inspections of transit goods and use risk assessment Art. 8: Alignment of working days and hours with neighbouring countriest at border crossings Art. 11: Cooperation between agencies of countries involved in transit Art. 8: Alignment of formalities and procedures with neighbouring countries at border crossings Art. 11: Supporting pre-arrival processing for transit facilitation 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fully implemented Partially implemented Pilot stage of implementation Not implemented Don’t know Not applicable Source: The UN Global Survey on Digital and Sustainable Trade Facilitation, 2021. Available at untfsurvey.org Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021 i