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SPECA Aid-for-Trade
Geneva, 10 July 2013
Regional Trade Integration:
Opportunities and Challenges for
Central Asia
Mario Apostolov, Regional Adviser UNECE Trade
[email protected]
Opportunities created by trade liberalization
1. Lower barriers to trade – higher growth, more
consumption
2. Lower cost of communication and transport
3. Global value chains to which producers and
consumers in less developed transition economies
can connect
4. Eurasian East-West Integration
5. Combine benefits from global and regional trade
liberalization (art.XXIV of the GATT 1994)
Challenges for the SPECA countries
1. Fallout from the world financial crisis / protectionism
2. Overly concentration on 1-2 commodities
3. Dutch disease (relationship between increase in
exploitation of natural resources and a decline in the
manufacturing sector)
e.g. KZ oil exports → high revenue → importation of
manufactured goods produced at lower cost in China and
South Asia → no stimulus for production
4. Low integration with regional and global value chains
5. No sense of regionalism & will for cooperation
6. Various schemes of cooperation with neighbours:
EEC, CAREC, ECO, TRACECA
Eurasia: 3 trading blocs
Source: Global Economic Outlook 2013
Annual GDP growth rates
in the SPECA region (in %)
2000-09 2010
Afghanistan
2011
2012
2013
2014
2015
..
8.4
7.0
11.8
3.1
4.9
6.3
Azerbaijan
14.4
5.0
0.1
2.2
4.8
4.8
2.9
Kazakhstan
7.5
7.3
7.5
5.0
5.0
5.3
5.5
Kyrgyz Republic
4.2
-0.5
5.7
-0.9
7.4
7.5
5.3
Tajikistan
7.7
6.5
7.4
7.5
7.0
6.0
6.0
Uzbekistan
6.1
8.5
8.3
8.2
7.4
7.1
6.7
China
9.4
10.4
9.3
7.8
7.7
8.0
7.9
Russian Federation
4.4
4.3
4.3
3.4
2.3
3.5
3.9
Turkey
3.0
9.2
8.8
2.2
3.6
4.5
4.7
Risks:
Gross average monthly wages by SPECA
country (US$»at current exchange rates)
Source: UNECE statistical data (http://w3.unece.org/pxweb/)
Growth in wages and labour productivity in
Eastern Europe and Central Asia, 2008–11 (%)
The way forward
1. Integrate with the global rules-based trading
system
2. Plug into global and regional value chains /
increase the value-added of your exports
3. Regional trade liberalization
4. Trade facilitation
Why regional trade liberalization
1. Need for modernization (CA development strategies)
2. Integrated regional market → attractive for investors
3. Investments bring new technologies, innovation,
resources, jobs, linkages to the world economy…
4. Scope: Only Central Asian or broader integration with
bigger neighbours?
5. ECE Analysis – FTAs have reduced tarriff barriers in
Central Asia => need for trade facilitation
Trade facilitation is high on the political agenda
The simplification, harmonization, standardization and automation of
trade procedures and the accompanying flows of information.
Benefits SMEs and LDCs
Over 2000 trade facilitation (TF) reforms in the world in the last 8 years. Why?
• From tariff barriers to non-tariff barriers
• Emergence of global value chains
• Need for more efficient, simple and transparent trade transactions
• Evidence of benefits:
• Expected WTO Agreement based on art. V, VIII, and X of WTO. A trade
facilitation deal could give a $1 trillion boost to world economy – Pascal Lamy,
1 February 2013
- 1 day to
export/import
…..+ 4%
international trade
- 4 days to
export/import
….+ 0.1 % GDP
per capita
growth rate
Source: WTO 2012, OECD 2012, WB DB Report 2013
National Trade Facilitation strategy
“as is” situation
“to be” situation
• Start with pre-Customs and Customs procedure reform
• Build interagency cooperation
• A Single Window/PCS – tools: elements of broader reform
• Change management
Sample strategy goals (over 5 years)
• Cut time to export (a container) by 50%; cost by 20%
• Cut rate of physical/documentary checks (to EU best practice rates)
• Increase number of registered Authorised Economic Operators (e.g.
to 50% of all traders)
• Create index on export competitiveness of companies in the country
UNECE Instruments in 4 Areas of TTF
1. Streamlining trade information exchange (UNLK,
codes, UNTDED, Single Window recommendations)
2. PPPs for trade facilitation (Recommendation 4)
3. Transit facilitation (TIR Convention)
4. Border-crossing facilitation
Trade Facilitation and inclusion in global value chains
Data Pipeline: Future Customs and International Trade Systems (David Hesketh, Customs-UK & Frank Heijmann, Customs-NL)
3rd Country
Regulation
Physical layer
Organisational
layer
Data & Document
layer
EU Regulation
Consignor or
Exporter
Freight
Forwarder or 3PL
Freight
Forwarder or 3PL
Container/Carrier
Port 1
Port 2
Country B
Country A
CARGO
Consignee or
Importer
CARGO
CARGO
CARGO
Value chains in the agri sector in CA
• Agri-sector in CIS: a mixture of small and large producers
• 5 types of processing companies:
–
–
–
–
–
Large, vertically integrated holdings
International manufacturers with headquarters in Moscow (eg.Danon)
Russian companies with foreign participation (e.g. Baltika)
Regional food companies from the Soviet times
Small regional producers
• Integration and enlargement (following Western models);
growing supply chain management sector
• Problem - low quality of materials (often due to slowdown in
exports of fresh produce) and companies such as Danon close the
manufacturing and supply chain
• Begin with Business Process Analysis
Dry fruit exports (apricots)
Countries producing dried apricots
% of world export
Turkey
75
Iran
7
Pakistan
4
China
3
others
11
Tajikistan: 8.1% of export – dried apricots
Kyrgyzstan: 3,1% of export
Exports into
• Europe
• Russia
• USA
Exports into EU
Production / preparations for export
Where to find information on Customs requirements?
Customs number (TARIC code for dried apricots:
0813100000), tarriff rates and quotas, import requirements?
What inport limitations exist?
Food safety limotations?
What package and markings are required?
What documents are needed for export?
• Invoice
Source: EU programme
• Transport documents
«Central Asia – Invest
II»: http://www.namsb.tj
• Packing List
• Insurance
• Certificate of Origin and confirmation
Form А
Safety and packing requirements
Thanks !
Mario Apostolov
Regional Adviser UNECE Trade
Palais des Nations, Room 431
CH-1211 Geneva 10, Switzerland
tel.: +41 22 9171134
fax: +41 22 9170037
e-mail: [email protected]
www.unece.org/trade & www.unece.org/cefact