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Regional customs integration lagging: Asean secretariat

Publication Date : 28-02-2014

 

Facilitating trade for the Association of Southeast Asian Nations (Asean) must go beyond administrative streamlining to integrate key services markets across the region, the secretariat said in a recent report.

The regional bloc’s secretariat recently published an online report monitoring the progress of Asean in its integration agenda slated for 2015, where it stated that logistics and air transport services have “already seen considerable progress being made within the region, but much remains to be done in terms of creating single regional markets for these services”.

In one of the chapters of the report focusing on trade facilitation and logistics, the secretariat found that the Asean trade facilitation agenda is not only about customs reform.

It acknowledged the progress made in modernising customs and implementing National Single Windows, though noted that full implementation is still pending in most countries.

“However, customs integration is still held up. There has been a decline in overall trade costs and improvement in logistics performance. But import and customs documentation requirements and freight and import costs are still high,” the secretariat stated.

“While progress in air connectivity has been notable, the larger connectivity agenda is still pending.”

Making additional progress towards the Asean Economic Community (AEC) Blueprint’s goals in non-tariff measures and services is an important part of improving the broader trade facilitation environment, the secretariat said.

“Faciliation is also about ensuring that implementation of product standards and phytosanitary measures, and the provision of transport and logistics services do not unduly impede trade,” the secretariat stated in the report, produced in collaboration with World Bank.

It added that the streamlining of standards, while clearly identified, has recorded modest and limited progress.

“It should become a focus of future work with emphasis on sectoral approach and results, starting with transparency.

In its identification of logistics services as a key component, Asean is a precursor,” said the report.

Apart from logistics and air transport services, it is “notable” that maritime transport is currently “not part” of the Asean integration agenda and potentially foregoing significant welfare gains particularly for the archipelagic member states of the regional grouping.

“Integration of regional trade services markets could help reduce prices, expand the range of services available, and improve efficiency. One part of a successful integration strategy will be openness to investment from outside the region in key areas of transport and logistics services.

The secretariat cited Japan as an example of a country investing heavily in core service markets in Asean with the aim of creating regional hubs that would then supply services across the region.

“The result of more integrated regional services markets would be an increase in regional goods trade, and particularly trade within production networks that rely on well-functioning services markets for their growth,” the report stated.

Continued liberalisation of key services markets is therefore an important aspect of trade facilitation, which overlaps with the services component of the Asean Economic Community Blueprint, it added.

In transport, progress has been inconsistent, the secretariat said.

“In the air transport sector there has been very good progress and good growth of the air transport industry, but the slow implementation of the multilateral agreements by some Asean member states has impeded rapid progress towards the Asean open sky regime, which is scheduled to be achieved by 2015,” it pointed out.

Trade facilitation should be addressed comprehensively, from a supply chain perspective, it added.

“Asean is increasingly becoming a regional production platform through the international integration of supply chain processes. That trend can only continue and intensify if policy attention is given to the full range of determinants of supply chain performance, focusing on time, cost, and, above all, uncertainty,” it said.

“Addressing the root causes of delays and uncertainty — including logistics regulation, transport markets, infrastructure, and governance — will be important priorities for Asean member states moving forward.”

IIt is important for member states to exploit synergies between their work on trade facilitation and work in other areas, in particular non-tariff measures and services in a bid to ensure maximum progress, the secretariat suggested.

 

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