WTO TRADE FACILITATION SUPPORT PROGRAM Gerard McLinden International Trade Department The World Bank Needs and Priorities/Implementation Costs and Challenges.

WTO TRADE FACILITATION SUPPORT PROGRAM

Gerard McLinden International Trade Department

The World Bank

Needs and Priorities/Implementation

Costs and Challenges Study

26 July 2006

Outline OverviewOverview Progress to dateProgress to date Key Issues identifiedKey Issues identified ConclusionsConclusions Next StepsNext Steps

Overview Annex D – Clear role for the World Bank (during and after Annex D – Clear role for the World Bank (during and after

negotiations)negotiations) Six country studies designed to identify probable costs and Six country studies designed to identify probable costs and

implementation difficulties associated with a new Trade Facilitation implementation difficulties associated with a new Trade Facilitation AgreementAgreement

Support provided by EC, DFID (UK) and SwedenSupport provided by EC, DFID (UK) and Sweden MethodologyMethodology

Partnership with the WCO and IMFPartnership with the WCO and IMF Country assessment visits – Experienced TF specialists Country assessment visits – Experienced TF specialists Development of a practical assessment tool (Based on TN/TF/W43 Development of a practical assessment tool (Based on TN/TF/W43

– Compilation of Proposals) – Compilation of Proposals) Individual reports prepared for each countryIndividual reports prepared for each country Consolidated report for NGTF membersConsolidated report for NGTF members Self assessment toolSelf assessment tool

Overview ScopeScope

Regulatory/Legal FrameworkRegulatory/Legal Framework NeedsNeeds Administrative Policy and Procedure NeedsAdministrative Policy and Procedure Needs Human Resource NeedsHuman Resource Needs Training NeedsTraining Needs Equipment/Infrastructure NeedsEquipment/Infrastructure Needs Organizational NeedsOrganizational Needs Change Management NeedsChange Management Needs

Focused on WTO NGTF Agenda – Not wider capacity building Focused on WTO NGTF Agenda – Not wider capacity building needs and prioritiesneeds and priorities

Customs Customs and other border management agenciesand other border management agencies

Progress to Date Detailed assessments conducted in:Detailed assessments conducted in:

RwandaRwanda Sri LankaSri Lanka ParaguayParaguay SenegalSenegal EgyptEgypt

Philippines late JulyPhilippines late July

Key Issues Identified

Specific needs and priorities differ but many common concerns Specific needs and priorities differ but many common concerns and challengesand challenges

Majority of proposals considered positive and practical by Majority of proposals considered positive and practical by government officials and the business communitygovernment officials and the business community

A new agreement seen by many as a catalyst for building A new agreement seen by many as a catalyst for building political will and momentumpolitical will and momentum

Little new – most proposals already part of the suite of good Little new – most proposals already part of the suite of good practice promoted by WCO, UNECE, WB, IMF and donorspractice promoted by WCO, UNECE, WB, IMF and donors

No country is starting from scratch – much donor support already No country is starting from scratch – much donor support already provided and more in the pipelineprovided and more in the pipeline

Key Issues Identified

All countries studied have made good progress already. All All countries studied have made good progress already. All currently: currently: Maintain websites containing most required information in a Maintain websites containing most required information in a

WTO languageWTO language Have formal appeal mechanisms in placeHave formal appeal mechanisms in place Utilize some form of risk management and selectivityUtilize some form of risk management and selectivity Accept security to release goods prior to final resolution of Accept security to release goods prior to final resolution of

import transactionsimport transactions Provide advice on tariff classification in advance of Provide advice on tariff classification in advance of

importationimportation Have IT systems for processing import/export transactionsHave IT systems for processing import/export transactions Possess adequate technical know how in key TF areasPossess adequate technical know how in key TF areas Have established post clearance audit unitsHave established post clearance audit units

Key Issues Identified

Many of the implementation challenges and barriers Many of the implementation challenges and barriers identified do not lend themselves to resolution by TA identified do not lend themselves to resolution by TA (regardless of its quality or quantity)(regardless of its quality or quantity) Competition between government agenciesCompetition between government agencies Poor quality of public/private relationshipPoor quality of public/private relationship Revenue maximization focus at expense of all other Revenue maximization focus at expense of all other

prioritiespriorities Low levels of voluntary complianceLow levels of voluntary compliance Under developed private sector (Banking, ICT, Under developed private sector (Banking, ICT,

Customs brokers)Customs brokers) Lack of sustained political will and commitment Lack of sustained political will and commitment

Key Issues Identified

Customs typically far ahead of other agencies:Customs typically far ahead of other agencies:

Customs in all countries have IT systems in placeCustoms in all countries have IT systems in place Customs already use some form of risk management and Customs already use some form of risk management and

selectivityselectivity Customs typically have some form of active cooperation and Customs typically have some form of active cooperation and

information sharing with neighboring countriesinformation sharing with neighboring countries Customs have received bulk of donor support to dateCustoms have received bulk of donor support to date Customs attempt to measure performanceCustoms attempt to measure performance Customs understand the TF agendaCustoms understand the TF agenda Customs have agreed international instruments and blueprints Customs have agreed international instruments and blueprints

to work fromto work from

Conclusions WTO TF agenda typically welcome and in line with existing WTO TF agenda typically welcome and in line with existing

modernization plans and strategies (with some exceptions)modernization plans and strategies (with some exceptions) Little new TA needed for Little new TA needed for mere compliancemere compliance with likely with likely

provisions of a new agreement provisions of a new agreement High costs associated with IT (single window) and border station High costs associated with IT (single window) and border station

refurbishment refurbishment TA needed for effective implementation – particularly in areas TA needed for effective implementation – particularly in areas

such as:such as: Drafting of legislative amendmentsDrafting of legislative amendments Developing new administrative systems and proceduresDeveloping new administrative systems and procedures IT system migration/upgradeIT system migration/upgrade Risk management – ‘control mindset’Risk management – ‘control mindset’ Activity based costing methods Activity based costing methods

Conclusions But, WTO TF agenda can’t be seen in isolation from wider But, WTO TF agenda can’t be seen in isolation from wider

reform and modernization needs reform and modernization needs Many needs similar across countries – potential for economies of Many needs similar across countries – potential for economies of

scale in design and provision of TA – potential for regional scale in design and provision of TA – potential for regional solutions and programssolutions and programs

S&DT must take into account individual circumstances of S&DT must take into account individual circumstances of members: members: Level of sophistication of private sectorLevel of sophistication of private sector ICT infrastructureICT infrastructure Revenue mobilization implications (rationalization of Revenue mobilization implications (rationalization of

charges, consularization fees, etc)charges, consularization fees, etc) Geography Geography

Next Steps … Finalize reports for six case study countries (August)Finalize reports for six case study countries (August) Prepare consolidated report and cost tables for distribution to Prepare consolidated report and cost tables for distribution to

NGTF members and donors (after recess)NGTF members and donors (after recess) Convert current country study tool into a practical self Convert current country study tool into a practical self

assessment tool assessment tool Currently exploring possibility of providing training to national Currently exploring possibility of providing training to national

officials to assist them to undertake detailed needs and priorities officials to assist them to undertake detailed needs and priorities assessments using the self assessment tool and methodology assessments using the self assessment tool and methodology

Benefits for Government and TradersLow High

Lo

wIm

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men

tati

on

D

iffi

cult

y/C

ost

Hig

h

Reject Proposal ?

Don’t Care ? Support Proposal

Support Proposal

But …

Consider S & DT and TA/Capacity Building ?

WB/WCO PROPOSAL ANALYSIS GRID