Edited by Sultan Hafeez Rahman, Sridhar Khatri and Hans-Peter Brunner
Chapter 4: Trade Facilitation Issues in South Asia
Deshal de Mel, Suwendrani Jayaratne and Dharshani Premaratne BACKGROUND Increased trade flows, developments in transportation and sophisticated information technology have changed the environment in which economies and businesses operate in the modern world. As tariffs across the globe have been reduced due to unilateral, plurilateral and multilateral trade liberalization, global competition in trade has increased substantially. In this context, inefficiencies in placing orders, delivering goods and making payments for internationally traded goods seriously undermine the competitiveness of businesses and overall economies, with adverse impacts extending to consumers and governments as well. Furthermore, delays at border crossings, harbours and docks caused by cumbersome procedures and excessive paperwork constitute an additional burden for businesses, particularly in light of global trends towards production fragmentation and the increased importance of maintaining low lead times. The hidden costs for trade are high; studies reviewed by the Organisation for Economic Co-operation and Development (OECD) in 2002 indicated that trade transactions costs amount to as much as 2 to 15 per cent of the value of goods traded globally (Wilson, 2006). In this context, the role of trade facilitation in increasing and maximizing the benefits of trade has been widely acknowledged.1 Indeed, trade facilitation has become a crucial element of the current trade and development agenda. Improved trade facilitation measures can contribute to the creation of a consistent, transparent and predicable environment for moving goods across borders smoothly. Further, well-targeted trade facilitation measures bring significant benefits to governments, businesses and consumers. Governments benefit from enhanced revenue collection...
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