Saturday, 27 November, 2021

Trade costs on rise in Asia, Pacific

Says a new report, adding that cuts in red tape can help check the trend

  • Diplomatic Correspondent
  • 7 October, 2021 12:00 AM
  • Print news

High cost of trade in Asia and the Pacific continues to rise, but ongoing efforts to facilitate commerce will help keep goods flowing throughout the region, said a new UN and ADB report.

According to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the Asian Development Bank (ADB) report, economies in the region have shown continued progress in streamlining trade procedures despite the COVID-19 pandemic.

It said the progress continued despite supply chain disruptions and surge in shipping costs due to the pandemic - which hit an all-time high this year.

Implementation of 31 general and digital trade facilitation measures rose on average across the region to 64.9 percent in 2021, about six percentage points higher than in 2019.

The Asia-Pacific Trade Facilitation Report 2021 published on Wednesday also highlighted that cross-border trade digitalization has great potentials to help countries in Asia and the Pacific access critical goods, especially those most vulnerable to trade uncertainty and crisis.

If countries speed up their implementation of digital trade schemes average trade costs could drop by more than 13 percent, read the report.

 “In addition to digitalization, there is also a need to pursue trade facilitation policies that make trade more sustainable and inclusive, leaving no one behind,” said Armida Salsiah Alisjahbana, UN Under-Secretary General and Executive Secretary of ESCAP.

She added that measures are specifically needed to support small and medium-sized enterprises, women and the agricultural sector to make recovery more sustainable.

The ESCAP-ADB study underscored the need to strengthen the resilience of supply chains as the COVID-19 pandemic laid bare the vulnerabilities of concentrated trade networks, limited inventories and financing shortages.

High global value chain participation left Asia and the Pacific particularly vulnerable to restrictive trade policies.

“Border closures, export controls and health and safety protocols have disrupted production and the flow of goods across international boundaries, with dire effects on the supplies of critical goods such as food, personal protective equipment and vaccines, especially for the poor and vulnerable,” said Bambang Susantono, ADB Vice-President for Knowledge Management and Sustainable Development.

The pandemic spotlighted the importance of prompt global and regional support and cooperation to ensure continuous supplies of critical goods.

About two-thirds of 20 Asia-Pacific Economic Cooperation (APEC) economies implemented new trade facilitation measures to mitigate supply chain disruptions.

Many countries in the region also accelerated measures related to transparency and institutional coordination, simplification of customs procedures and expedited clearance.

The report further highlights the role of the WTO Trade Facilitation Agreement and the related UN treaty on cross-border paperless trade in Asia and the Pacific to accelerate recovery post-COVID-19 while trade openness remains a key element. As the pandemic quickened the move to trade digitalization, more work is needed to leverage digital technologies to streamline customs procedures and electronic exchange of information.Efforts are also needed to implement national and regional single windows for document submission and clearance.

The biennial report was launched at a webinar on “Supply Chain Resilience and Trade Facilitation amid the COVID-19 Pandemic.” The event was co-hosted by ESCAP, ADB and the International Chamber of Commerce (ICC). At the session, experts and government officials explored good practices in implementing digital trade and enhancing international cooperation towards a more responsive global trading system.