Trade and Transport Facilitation Audit in South Asia: Dissemination of study findings

Mr. Suraj Vaidya, SAARC Chamber of Commerce and Industry president, highlighted the difficulties of cross-border trading within the South Asian region with examples in which his own business delegation had carried out field visits for first-hand information on the state of trade facilitation. He called on the political leadership for greater political will to remove the hurdles in the way of intra-regional trade.

Ms. L. Sabithri, director for trade, finance and economics at the SAARC Secretariat, said that the intentions of the member countries has been good, that the institutions are there but things have not been moving as well as expected, as “we have focused on cooperation rather than integration”. She talked about the disconnects plaguing the regional body, like the gap between commitment and practice, national and regional priorities and intra-governmental differences on the same issue.

Dr. Posh Raj Panday, executive chairman of SAWTEE, who also chaired the inaugural, said that there is real cost involved in having trade obstacles. Cross-border trade facilitation can benefit countries through a greater amount of trade and a diversified trade, not to mention the benefits it gives small and medium enterprises, he said and warned that without measures to do so South Asia’s existing competitive advantage could erode.

Working sessions followed these remarks. These sessions were divided into two categories, the first set  saw discussions on the issues of the non-landlocked South Asian countries and their traders’ plight. The second group, slated for the next day, was devoted to discussing issues of the landlocked SAARC members. The latter helped add depth to the connectivity issue by including transit problems. But, prior to discussing these two sets of country reports, a separate primer session was held to discuss the general issues of trade facilitation with references to the World Trade Organization (WTO) agreement and South Asia’s need to tackle the emerging concerns. These two presentations were done by Dr. Nisha Taneja of Indian Council for Research on International Economic Relations (ICRIER) and Dr. Prabir De, Professor, Research and Information System for Developing Countries (RIS) and Coordinator, ASEAN-India Centre, New Delhi.

Discussants focused on the non-tariff measures that hampered trade and the cost they were inflicting on intra-regional trade. They noted that the WTO TFA commitments of individual countries was speeding the implementation of different aspects of trade facilitation but that their being in different stages of doing so was also hampering efforts at harmonizing the procedural aspects within SAARC.  To resolve this, a participant said that an implementation deadline is needed so that harmonization can be smooth. Since these were uncharted territory for South Asians, participants also called for capacity building initiatives.

The country sessions charted out the issues regarding trade facilitation and the developments taking place in the area in each of the SAARC member states. Automation of customs services and one window customs clearance were found to be the primary focus of every SAARC member. Each was found by the audit to be in a different stage of implementing them. Sri Lanka appeared to be at the forefront on implementing the national single window while in automating customs clearance most members were already in the advanced stage of upgrading to Automated SYstem for CUstoms DAta (ASYCUDA) World were already enforcing it. The audit also found that India, on its part, had developed its own system called SWIFT.

The presentations devoted to non-landlocked SAARC members were tilted towards solving the infrastructure problems—over or undercapacity of ports, quality of roads, transport issues, integrated custom posts and the like. There were also voices raised regarding the shifting priorities of customs-from being revenue collectors to guardians of security, health, the environment and the like. For infrastructure, investment should be done on a private-public partnership basis, and that the model for that should be chosen carefully.

On the other hand, landlocked countries called for more points of entry and exit along their borders to open for transit, documentation and procedural hassles facing them in the ports of transit and transportation issues. Some of these problems were being transferred from SAARC to subregional forums like the BBIN (Bangladesh, Bhutan, India Nepal) for resolution and things were reported to be moving in the right direction here. One participant pointed out that freedom of transit is not enough and that reduction of transit costs and removal of transit hurdles should be the goal.

A discussant called for trial runs to be carried out so that the actual problems can be identified and resolved effectively. Having too many hurdles is not helpful. However, no matter how the obstacles are set up, traders will find a way to continue their business, several participants said, if not formally, then informally. “Like water, trade will keep on flowing”, said one.

Following the country presentations, another session was devoted to cobbling up a South Asian perspective on trade facilitation. The presentation was done by SAWTEE Chairman Dr. Posh Raj Panday where he outlined the objectives and justified the methodology followed by the audit, before rounding up with a comparative analysis of the country studies.

 The closing session tried to chart a future course for regional trade facilitation in South Asia. Here, too, the presentation was carried out by Dr. Panday. He gave an empirical twist to the attempt by using an econometric model to show the inverse relation between transaction costs and trade facilitation. To reduce the costs, he recommended several ideas and they included those at the bilateral and subregional levels. They were:     

• Regional framework for regional infrastructure like the subregional transport agreement  of BBIN which talks about at least the movement of trucks     
• Harmonization of customs procedure and documentation and classification of goods   
• Seamless connectivity among South Asian countries     
• A regional transit agreement for South Asia.       
• Investment on port and other infrastructure from government and private sector        
• Single window to be made more streamlined and advanced to the national level and, ultimately to, the SAARC levelC       
• Clearance procedures to be made more predictable and transparent        
• Have more integrated checkpoints at the bilateral level       
• Mutual recognition agreement for technical standards        
• Development and update of human resources for trade facilitation in an institutional manner
• Awareness among private sector stakeholders on the issue of trade facilitation provisions 

The dissemination meeting brought together government officials, practitioners, private sector representatives, media personnel, academics and various other stakeholders to share their knowledge and experience in trade and transport facilitation across South Asia.

The meeting was organized under the project “Trade and Transportation Facilitation Audit in South Asia” initiated in 2013 with support from the Australian Government’s Department of Foreign Affairs and Trade (DFAT). The project was implemented by SAWTEE with its member/partner organizations, namely Centre for Policy Dialogue (CPD) in Bangladesh; Consumer Unity and Trust Society (CUTS) International in India; Sustainable Development Policy Institute (SDPI) in Pakistan; and Institute of Policy Studies of Sri Lanka (IPS) in Sri Lanka. The overall goal of the project was to contribute in enhancing economic integration in South Asia by identifying trade- and transport-related bottlenecks in the region and estimating the required investment.

The inputs collected from the meeting shall add value to the draft reports.