ICC chief calls for Asean trade facilitation reform
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THE INTERNATIONAL Chamber of Commerce is calling on Asean and Thailand to speed up trade-facilitation reform and increase trade financing, especially for small and medium-sized enterprises.
During a mission to Bangkok this week, John Danilovich, secretary-general of the ICC, said that with the Asean Economic Community (AEC) coming up, many countries, mainly in Asean and Thailand as the centre of the region, should implement the Trade Facilitation Agreement.
Thailand has shown great leadership in recent years in implementing trade-facilitation reforms such as the single-window customs programme for the AEC, he said.
The ICC urges the Thai government to consider ratifying and implementing the Trade Facilitation Agreement as quickly as possible, as it will help boost Thai firms’ expansion in global and regional markets.
Although the pact was agreed by World Trade Organisation members in December 2013, progress has been slow in implementing it in many countries.
The ICC estimates that if every WTO member implemented the agreement it would help boost global gross domestic product by some US$1 trillion (Bt32.7 billion) in five years. However, only a handful of countries have ratified it.
The ICC also claims that ratification could create up to 21 million jobs worldwide, of which 18 million would be in developing countries, mainly in Asia.
In the meantime, Asean, especially Thailand, should be slashing customs red tape, as Asean integration will be highly efficient if customs regulations are clearer and bureaucratic procedures not so complicated, Danilovich said.
Many trade regulations and the customs bureaucracy have hindered trade, since many people are involved and that could lead to corruption, he claimed.
The ICC, which counts some 6 million members in more than 130 countries, also encourages banks to increase trade financing and provide more loans to help SMEs.
Since currencies began fluctuating, the trade finance market has seen tremendous volatility in recent years.
At the height of the financial crisis in 2009, the WTO estimated a $1-trillion shortfall of trade finance globally.
According to the Asian Development Bank, that gap has widened and now stands at $1.6 trillion – with as much as $900 billion of it in developing Asian economies alone.
Several surveys have shown recently that access to trade finance is the single biggest barrier to SME exports.
“So it’s clear that a shortage of trade finance is stifling the numerous opportunities international trade provides for growth, job creation and poverty reduction,” Danilovich said.
Policy-makers, banks and agencies need to address some of the supply-side constraints in the financial industry, particularly the effect of changes in financial regulation on the ability of banks to finance trade, he said.
