INTRODUCTION

Trade facilitation is an ever-evolving term that has changed its elements and connotations as the world has become more integrated and production more fragmented.

Investing in trade facilitation creates benefits for the government as well as the private sector. Trade facilitation reforms can generate significant welfare gains for the economy as a whole. The APEC Economic Committee has estimated that trade facilitation measures committed to date will add 0.25% of real GDP to APEC (about USD$46 billion in 1997 prices) by 2010, compared to economic gains from trade liberalization measures (tariff removal) amounting to 0.16% of real GDP (about USD$30 billion)” (Wao and Wilson, 2000).

Reducing trade transaction costs is a necessary complement to economic liberalization for developing countries to effectively participate in regional and global markets.

TRADE FACILITATION IN ASEAN

The Association of Southeast Asian Nations (ASEAN) member countries, have made a series of commitments in order to be able to facilitate trade amongst themselves and more recently their main trade partners.

Decreasing tariffs and duties relieves some of the burdens existing for intra-ASEAN trade, but the core inconveniences are related to activities that need to take place in order for cargo to be mobilized amongst countries. As it will be noted below, non-tariff barriers, such as licensing, excessive cargo manipulation, red tape, and bureaucratic procedures can increase the cost of trading goods up to an additional 60% of the cost of cargo at origin. This is not a real issue when the goods traded are of high added value, i.e. electronics, technology goods, fine leather goods, but when the cargo traded is of low added value (agricultural goods, basic textiles and apparel) a steep increase in price caused by external factors can mean a decrease in competitiveness for the goods produced in these countries, or even worse, the complete shutdown of trade in those areas. Indeed, “software” issues — such as processing trade-related documents and fulfilling clearance requirements by customs and other technical control agencies — account for more than 50–60 percent of the total time to export and import in many countries around the world”.