Trade Facilitation Needs Assessment in South Asia

Supported By

Regional Centre, Colombo

About the Project

The project, “Trade Facilitation Needs Assessment in South Asia”, is a field-based extensive research project based on Article 8 negotiations of South Asia Free Trade Agreement (SAFTA). The issues covered under the project include: a) transportation; b) border measures c) port efficiency; and d) standards related procedure. The project aims at exploring and analysing the trade related issues other than the tariff related barriers that impact export and import from the Eastern Sub-Region of South Asia comprising of the select countries viz. Bangladesh, Bhutan, India (West Bengal) and Nepal. Given the attempts to increase trade volume from the region under the ages of World Trade Organisation (WTO), major policy issues would be explored and approaches would be suggested that would fit with the interests and priorities of these countries of South Asia.

The project is a commissioned study supported by United Nations Development Programme (UNDP) Regional Centre, Colombo.

Background

Multilateral trade negotiations, together with preferential trading arrangements (PTAs) and unilateral liberalisation efforts, have succeeded in bringing down tariffs and establishing rules on non-tariff barriers (NTBs), not only in developed countries but also in the developing world, including the South Asian nations. However, despite that, trade performance of South Asian countries over the past two decades has been poor relative vis-a-vis other regions. The low level of intra-regional trade has contributed to weak export performance in South Asia. Intra-regional trade in the region is extremely limited, albeit geographic proximity and levels of gross domestic product (GDP) are taken into account.

Though ‘traditional’ trade barriers have gradually disappeared to a great extent, the costs of inefficient administration and cumbersome trade procedures in South Asia have become increasingly visible. Given these concerns, issues on Trade Facilitation negotiated as part of the Doha Development Round of the WTO have become increasingly important. Collective and concrete action to lower trade barriers, advance domestic reform, and support capacity building in the region is the need of the hour.

In particular, measures to facilitate trade and lower logistics costs in South Asia are among the most important steps to promote intra-regional trade and economic integration. A review of trade facilitation and transport logistics in the South Asian region illustrates weaknesses, including delay at ports and poor transport infrastructure, inadequate regulatory environment, and inept service sector infrastructure. Improving the standards, practices and procedures in customs, which sometimes add significantly to the cost of doing business, whether for local markets or for re-export are also very much required. Furthermore, landlocked countries like Nepal, Bhutan confront additional delays due to congestion at roads and transits caused by poor communication infrastructure and networks. With recent additional controls put in place, especially on security grounds, the delays for exporters, in particular, have become even longer and more problematic.

Objectives

The project has the following interrelated objectives:

  • To facilitate cross-fertilisation of experiences and lessons learnt on trade facilitation by the South Asian countries to develop appropriate policy response;

  • To explore these trade facilitation policy issues and suggest approaches that would fit in the interests and priorities of the South Asian countries;

  • To facilitate the synergy between governments, civil society organisations (CSOs) and other stakeholders to strengthen their collective perspectives and positions on trade facilitation needs of the South Asian countries;

  • To prepare an advocacy document to provide inputs to the relevant stakeholders from research and other activities, taking into account the interests and priorities on trade facilitation of all the South Asian countries; and

  • To advocate some scenario planning by these countries, as a prelude to further action by the respective government on trade facilitation.

Methodology

The project is based on analytical and field research and will encompass dual level of analysis of the trade facilitation issues – needs assessment through diagnostic interviews. The crux of the study would be the needs assessment that would help in identifying most urgent trade procedural problems in these countries of South Asia. The survey will be conducted by holding targeted interviews with the stakeholders (exporters and importers to begin with and then to commission agents, port officials, etc) on the basis of set target questionnaire. After the identification of the procedural problems, diagnostic interviews will be held by talking to relevant government departments and other experts in the respective countries. This will facilitate in identifying answers to the trade facilitation problems, along with segregating the problems between domestic issues and international issues, and whether a multilateral platform is the right place to address some of these problems.