Archives For February 10, 2013

fair-trade-virtues-of-free-trade-image2A  new database developed jointly by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the World Bank has revealed that trade costs fall disproportionately on developing countries. This is despite the fact that the international economy has integrated considerably in recent decades.

Disclosing this in a statement issued yesterday, the World Bank  said the study noted that “although developing countries were becoming more integrated into the world trading system in an absolute sense, they are starting from a higher baseline and their relative position is deteriorating because the rest of the world is moving more quickly.”

The bank explained that the new Trade Costs database uses an innovative method to estimate trade costs in agriculture and manufactured goods, opening new analytical possibilities for policymakers and researchers interested in trade integration.

“According to the research, trade costs are influenced to varying degrees by distance and transport costs, tariff and non-tariff measures, and logistics. The new data, which cover the time period 1995-2010, stress the importance of supply chains and connectivity constraints in explaining the higher costs and lower levels of trade integration observed in developing countries.

“One of the key findings triggered by the database is that two areas amenable to policy interventions—maritime transport connectivity and logistics performance—are very important determinants of bilateral trade costs, with an effect comparable to that of geographical distance.”

Ravi Ratnayake, Director of ESCAP’s Trade and Investment Division, which partnered with the World Bank on the project, said, “Technological factors are responsible for a significant share of the differences in trade costs around the world. From a policy perspective, reforms in areas such as infrastructure, core trade-related services sectors, and private sector development can thus have significant benefits for countries in terms of lowering trade costs.”

The global database shows the pattern of trade costs across countries and through time by offering a comparison of pairs of countries, and an identification of those trade costs that are high. As such, the data set can be used to examine the policy factors and “natural” factors that contribute to the levels of trade costs observed around the world. One telling trend: for upper middle income countries, it is easier to trade with high income countries than among themselves. Source: Leadership (Nigeria)

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WEF - Building Resilience in Supply ChainsOn 24 January 2013, the Secretary General of the WCO, Kunio Mikuriya, participated in a press conference dedicated to the launch of the World Economic Forum’s (WEF) Building Resilience in Supply Chains 2013 report. Sander van ‘t Noordende, Accenture’s Group Chief Executive for Management Consulting, introduced the report and its major findings, such as the top supply chain risks that include extreme weather, natural disasters, physical and cyber security threats, along with economic and political volatility. He highlighted that the report argued the need for a coherent and consistent framework to deal with supply chain resilience, partnerships between government, Customs and businesses, and the sharing information flows for risk assessment purposes.

Secretary General Mikuriya pointed out that supply chain resilience is very important for Customs, whose functions include ensuring that legitimate trade continues even in cases of disruption, an issue which has been addressed by a set of standards and instruments developed by the WCO, in particular, the 2011 WCO Resolution on the Role of Customs in Natural Disaster Relief.  He also stressed the importance of public-private partnerships in order to share security responsibility with trusted traders through the implementation of the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade and its integral Authorized Economic Operator (AEO) programme.

Cooperation at intergovernmental level with longstanding partners of the WCO, such as the International Maritime Organization (IMO), the International Civil Aviation Organization (ICAO), the Universal Postal Union (UPU), the International Air Transport Association (IATA), the International Road Transport Union (IRU) and the World Shipping Council (WSC), was also emphasized by the Secretary General as being key to harmonizing standards and creating synergies among different stakeholders. In addition, he pointed out that transparency and trust among stakeholders in supply chains was of the utmost importance, as this led to a global cohesive approach and even stronger partnerships.

The Secretary General of the IMO, Koji Sekimizu, addressed the concerns of the maritime sector, in particular, the sustainability of international transportation within the context of supply chain resilience. He mentioned that along with the WCO, the IMO has built its approach on risk assessment and risk management, resulting in the adoption of the International Ship and Port Facility Security Code (ISPS Code), a comprehensive set of measures to enhance the security of ships and port facilities. He also touched on the issues of port infrastructure, piracy and port security, and underlined the importance of cooperation with other stakeholders, such as the WCO and ICAO. Source: WCO