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Despite raging geopolitical turmoil, mainly due to the Russia-Ukraine war, global trade registered a modest growth last year. Its overall value reached US$32 trillion in 2022 with an around 10-percent growth in trade in goods and 15 per cent in trade in services. Though the trade growth in the last quarter of the past year was negative, it entered into positive territory in the first quarter of the current year, according to a report of the United Nations Conference on Trade and Development (UNCTAD). The UN agency has, however, projected that the trade growth may decline in the second quarter of the year and prospect for the rest of the year is painted bleak.
Nevertheless, annual trade growth in the last year also indicates that despite some obstacles, countries are trying to make trade procedures easier and less costly. The fifth United Nations Global Survey on Digital and Sustainable Trade Facilitation supports the proposition to a large extent. The survey, covering 161 countries, found progress in 'more efficient trade facilitation (TF) with the overall implementation rate of general-and digital trade- facilitation measures increasing by more than six-percentage points between 2021 and 2023. The survey is a joint initiative of the UN Regional Commissions and UNCTAD. The regional commissions are: Economic Commission for Africa, the Economic and Social Commission for Asia and the Pacific (ESCAP), the Economic Commission for Europe, the Economic Commission for Latin America and the Caribbean, the Economic and Social Commission for Western Asia.
The latest report on the survey, released in the first week of this month, showed the global average implementation rate of the TF measures currently at 68.7 per cent. The highest implementation rate is seen in developed economies (85.3 per cent), followed by countries in South-East and East Asia with 76.6 per cent.
Members of the World Trade Organization (WTO) in 2013 agreed to implement the trade facilitation agreement (TFA) to overcome 'bureaucratic delays and red tape' posing a 'burden for moving goods across borders for traders.' In a plain language, trade facilitation is the 'simplification, modernisation and harmonization of export and import processes.'
The core objectives of the agreement include rapid release and clearance of goods, easy availability of information on rules and procedures, automation and e-services, disciplines for fees and penalties, and harmonised processes and standards. To attain the objectives, various measures have been outlined and WTO members are now committed to adopting these measures so that international trade can be easier and faster. For instance, some of the TFA provisions facilitate faster movement of goods across borders like the release of products even before the final determination of customs duties. Again, there are provisions requiring WTO members to 'accept e-payments and electronic versions of certain documents where appropriate and possible.' Again, some of the TFA provisions facilitate faster movement of goods across borders, like the release of products even before the final determination of customs duties.
Thus, TFA becomes an umbrella agreement for all other agreements and initiatives related to trade facilitation. These include the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific (CPTA), the expansion of the ASEAN Single Window Agreement, and the African Continental Free Trade Area (AfCFTA) Agreement. According to the UN: "These initiatives could further support countries in gradually moving to less-paper and then to paperless and cross-border paperless trade by providing a dedicated, inclusive and capacity-building intergovernmental platform."
BANGLADESH SITUATION: The survey findings spotted Bangladesh in a position that the country has yet to improve in various areas of trade- facilitation measures significantly. The country's overall TF- implementation score remained unchanged in 2023, at 64.52 per cent, as it was in 2021. The survey identified 66 TF measures under eight broad categories.
Though the country's position in the area of transparency and formalities are satisfactory with average implementation rate being above 80 per cent, it lags behind in institutional arrangement and cooperation as well as paperless trade. Again, Bangladesh has failed to make any progress in cross-border paperless trade.
In fact, the country is yet to introduce electronic application and issuance of preferential certificate of origin, electronic application for customs refunds, and electronic exchange of certificate of origin. The electronic single-window system is now at planning stage and electronic submission of customs declarations is partially implemented. Electronic application and issuance of import and export permits is, however, fully implemented. Interestingly, Bangladesh's status in terms of paperless trade is not bad in comparison with South Asia.
The country's performance in terms of trade facilitation for SMEs remains ever so poor. It has, however, achieved some good progress in the areas of agriculture-trade facilitation and women-in-trade facilitation.
Nevertheless, the country needs to work rigorously to improve on the TF-implementation score so that it can be more competitive in the global market. Faster implementation of the trade- facilitation measures will be critical for Bangladesh in the post-LDC era where the country will no more enjoy the various preferential benefits. Moreover, faster implementation of TF will reduce the cost of doing business and cut the cost of trade. As the country's trade policy underscores the necessity of cost cutting, implementation of the WTO TFA will be instrumental. There is also a scope to get some financial and technical assistance as an LDC to implement the various TF measures.
A number of work-programmes are already there to implement the TF measures in the country. Development partners have also extended their cooperation in this connection. For instance, the Bangladesh Trade Facilitation (BTF) project, a five-year, $18-million USDA-funded initiative, is designed to help the country enhance its trade- facilitation system and expand regional and international agricultural-trade opportunities. Launched two years back, the project focuses mainly on reducing the cost of trade in agricultural goods. The better score in agriculture-trade facilitation of the UNTF survey may be linked to the project.