EXPORT EXPANSION THROUGH TRADE FACILITATION Bucharest Jon Walden www.ebrd.com/knowhow
Agenda 1. Why is trade facilitation important 2. What are the challenges 3. Current initiatives in global trade facilitation 4. How these initiatives open up new markets for Romania 5. Questions / Discussion www.ebrd.com/knowhow 2
Some headlines…… In 2016 Romania exported $63.4B, making it the 34th largest exporter in the world. During the last five years the exports of Romania have increased at an annualized rate of 4.92%, from $61.8B in 2011 to $63.4B in 2016. The most recent exports are led by Vehicle Parts which represent 10.5% of the total exports of Romania www.ebrd.com/knowhow 3
The top ten exports 1. Electrical machinery, equipment: US$12.3 billion (17.4% of total exports) 2. Vehicles: $11.5 billion (16.2%) 3. Machinery including computers: $7.8 billion (11%) 4. Mineral fuels including oil: $2.9 billion (4%) 5. Furniture, bedding, lighting, signs, prefab buildings: $2.7 billion (3.8%) 6. Rubber, rubber articles: $2.4 billion (3.5%) 7. Optical, technical, medical apparatus: $2.4 billion (3.4%) 8. Cereals: $2.3 billion (3.2%) 9. Clothing, accessories (not knit or crochet): $2.2 billion (3.1%) 10. Articles of iron or steel: $2 billion (2.8%) www.ebrd.com/knowhow 4
The current international trade environment involves complex international trade processes with disparate systems Each international trade transaction requires an average of 40 documents of 200 data elements, with 15% repeated at least 30 times and 60-70% repeated more than once. (UNCTAD) www.ebrd.com/knowhow
International Trade Supply Chain www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
International Trade International trade in the 21 st Century – the reality – Non-tariff Barriers • Increasing complexity of processes • Increasing commercial risk to traders • Increasing country risk to traders • Increasing banking risk to traders • Increasing supply chain security issues • Increasing trackability / traceability requirements • Decreasing availability of expertise www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
Ease of Doing Business • Romania is ranked 45 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Romania deteriorated to 45 in 2017 from 36 in 2016. Ease Of Doing Business in Romania averaged 38.25 from 2014 until 2017, reaching an all time high of 45 in 2017 and a record low of 35 in 2015. • Romania falls behind Moldova in Doing Business 2018 ranking www.ebrd.com/knowhow 8 www.ebrd.com/knowhow/romania
Market Access Database • http://madb.europa.eu/madb/indexPubli.htm www.ebrd.com/knowhow 9 www.ebrd.com/knowhow/romania
Market Access Database Applied Tariffs Database http://mkaccdb.eu.int www.ebrd.com/knowhow
Market Access Database Exporters’ Guide to Import Formalities http://mkaccdb.eu.int www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
TRADING GROUPS SUPPORT GLOBAL VALUE CHAINS • Customs Union • European Community – 28 members – ‘Free Circulation’ • East Africa Community • Free Trade Areas (FTAs) • European Economic Area – EEA • North American Free Trade Area – NAFTA • European Free Trade Area – EFTA • Asian Free Trade Area – AFTA – Brunei; Indonesia; Singapore; Malaysia; Philippines; Thailand; Vietnam • Asian Pacific Economic Cooperation Forum – APEC • Preferential Trade Agreements (PTA’s) www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
Current Initiatives and Trends in Trade Facilitation • World Trade Organisation Trade Facilitation Agreement – Ratified 5 October 2015 Notification 5 March 2018 • Migration to e-Commerce • Transport – multi-modal connectivity • Blockchains ?? • Availability of information www.ebrd.com/knowhow 13 www.ebrd.com/knowhow/romania
Why the TFA is important for Romania • EU Level • Romania level • Opening up emerging markets • Global networks and globally networked customs www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
The TFA in context 1. The Trade Facilitation Agreement is the first Agreement concluded at the World Trade Organisation (WTO) by all of its Members 2. It is a big deal in the context of the evolution of international trade law as it obliges WTO member countries to adopt, either as mandatory or as best efforts, recognised international best practice into national law concerning the control and regulation of trade across borders 15 www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
International Trade in Context Merchandise exports of WTO members totalled US$ 16.2 The share of developing trillion in 2015 economies in merchandise exports Merchandise trade between increased from 33% in developing economies has 2005 to 42% in 2015 increased from 41% to 52% of their global trade in the last ten years Source: WTO World Trade Statistical Review 2016 www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
Where the TFA will Impact Source: OECD www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
Objectives 18 www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
What does it all mean for Romania ? • Reduction in overhead cost of international business • Opening up of emerging markets • Increased export diversity • Promotion of ‘Brand Romania’ • Attract inward investment • Further expansion in global value chains All of which supports economic growth and increased prosperity! www.ebrd.com/knowhow 19 www.ebrd.com/knowhow/romania
Summary and Questions www.ebrd.com/knowhow www.ebrd.com/knowhow/romania
Thank You www.ebrd.com/knowhow
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