Regional: Trade Facilitation in South Asia

Sovereign Project | 47016-001 Status: Active

Summary

South Asia is among the least economically integrated regions in the world. Only 5.4% of South Asia's trade is intraregional, compared with over 26% in Southeast Asia and 51% in East Asia. Despite progress made since 2005 in facilitating inland and cross-border trade (e.g., time for export was reduced from 35 days in 2007 to 32 days in 2011), key impediments remain, such as (i) large number of documents for border clearance; (ii) lack of streamlined customs and other border procedures; (iii) lack of efficient and modern customs facilities; (iv) lack of harmonized processes across countries; (iv) high inspection levels at borders; (v) needs for multiple transshipments due to limited transit rights; (vi) lack of mutual recognition of product testing certification; (vii) high uncertainty and costs for cargo clearances; (viii) need for well coordinated institutional arrangements for transport and trade facilitation at both national and regional levels, and more.

Latest Project Documents

Title Date
Trade Facilitation in South Asia Aug 2013

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Procurement Documents

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Project Name Trade Facilitation in South Asia
Project Number 47016-001
Country Regional
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8435-REG: Trade Facilitation in South Asia
Japan Fund for Poverty Reduction US$ 1.50 million
TA 8435-REG: Trade Facilitation in South Asia (Supplementary)
Technical Assistance Special Fund US$ 525,000.00
TA 8435-REG: Trade Facilitation in South Asia (Supplementary)
Regional Cooperation and Integration Fund US$ 500,000.00
Technical Assistance Special Fund US$ 250,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Industry and trade - Industry and trade sector development - Trade and services

Transport - Multimodal logistics - Transport policies and institutional development

Gender Equity and Mainstreaming No gender elements
Description
Project Rationale and Linkage to Country/Regional Strategy

South Asia is among the least economically integrated regions in the world. Only 5.4% of South Asia's trade is intraregional, compared with over 26% in Southeast Asia and 51% in East Asia. Despite progress made since 2005 in facilitating inland and cross-border trade (e.g., time for export was reduced from 35 days in 2007 to 32 days in 2011), key impediments remain, such as (i) large number of documents for border clearance; (ii) lack of streamlined customs and other border procedures; (iii) lack of efficient and modern customs facilities; (iv) lack of harmonized processes across countries; (iv) high inspection levels at borders; (v) needs for multiple transshipments due to limited transit rights; (vi) lack of mutual recognition of product testing certification; (vii) high uncertainty and costs for cargo clearances; (viii) need for well coordinated institutional arrangements for transport and trade facilitation at both national and regional levels, and more. Consequently, border crossings in South Asia are among the most congested in the world. It takes 32.4 days to export from South Asia, compared with 23.1 from East Asia and the Pacific.

Trade facilitation is key to addressing major nonphysical impediments to cross-border movement of goods and people across the South Asia region. It is needed to maximize the benefits of regional transport infrastructure being put in place along priority connectivity corridors in the region.

This TA will focus on improving Customs cooperation in the countries of the South Asia Subregional Economic Cooperation (SASEC) Program, which are carrying out, in varying degrees, reforms to modernize customs management and administration. It will also help build capacity in customs reforms and modernization in Maldives and Sri Lanka. The TA will provide support in the implementation of the SASEC subregional trade facilitation program loans/grant to Bangladesh, Bhutan, and Nepal approved in November 2012. The program loans/grant intend to increase trade, including intraregional trade, of SASEC countries by reducing or removing non-tariff barriers (NTBs), specifically institutional, administrative, and technical barriers to trade in Bangladesh, Bhutan and Nepal. The TA would support the implementation of the program loans through the facilitation of dialogue and information exchange among SASEC countries on modern customs administration along (i) modern and effective customs administration and/or management; and (ii) streamlined and transparent trade processes and procedures. Inefficient customs administrative procedures are considered a major NTB in South Asia.

This TA will build on an ongoing subproject on capacity building for SASEC trade facilitation (TF) being funded by the Australian Agency for International Development, and complement the planned national TAs to Bangladesh, Bhutan, and Nepal to support their respective participation in SASEC trade facilitation activities.

Increased coordination within and between SASEC countries and other South Asian countries is needed to ensure that existing and planned trade facilitation activities will be in line with the strategic priorities of the RCS. This will require the strengthening of capacities on trade facilitation in the participating countries, and a framework for regular consultations and dialogue at the subregional level to plan and coordinate activities as well as to monitor progress.

Impact More efficient, transparent, secure and service-oriented processing of cross border trade in South Asia

Project Outcome

Description of Outcome Modern and effective Customs administration and management in participating countries
Progress Toward Outcome

Agreement reached on a work plan for 2014-2015 for the SASEC customs subgroup in customs modernization and harmonization, which is in line with the SASEC Trade Facilitation Strategic Framework endorsed by all member countries in March 2014.

The Third and Fourth SASEC Customs Subcommittee Meeting was held on 11-12 March 2015 in Goa, India and 27-28 October 2015 in Cebu, Philippines.

Implementation Progress
Description of Project Outputs

Enhanced cooperation between and among Customs agencies in South Asia

An interface framework for customs administration systems in SASEC countries identified

Status of Implementation Progress (Outputs, Activities, and Issues)

Organized the SASEC customs subgroup wherein customs officials from the SASEC countries met and discussed their workplan and planned activities, including priority subregional capacity building initiatives.

Subregional workshops on good practices on customs modernization were held for officials of SASEC countries.

Agreement reached among SASEC countries to carry out a feasibility study of electronic exchange of trade related information. A regional workshop to discuss the findings of the study will be held on 7-8 April 2016 in New Delhi, India.

ADB-UN ESCAP Workshop to Finalize Feasibility Study on Pilot Implementation of ESCAP Secure Cross-border Transport Model along India-Bhutan Transit Corridor will be held on 10-12 December 2014 in Hua Hin, Thailand.

The RETA funded the finalization of the Motor Vehicle Agreement (MVA) of Bangladesh, Bhutan, India, and Nepal. This is in line with the transport facilitation pillar of the SASEC Trade Facilitation Strategic Framework. Protocols on the Movement of Cargo and Passenger Vehicles are now being negotiated.

Geographical Location

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Customs agencies in the SASEC countries have been closely consulted on the TA design and implementation arrangement. In addition, coordination other stakeholders, including other donor agencies were ensured.
During Project Implementation Relevant stakeholders are consulted and if necessary are invited to participate during meetings.

Business Opportunities

Consulting Services

The project will require the services of consultants, which will be engaged as individuals:

(i) International trade facilitation specialists (Key Deliverables: Framework for interface of Customs administration systems in the SASEC countries; draft strategy and road map for a feasible process of interface of customs administration systems; draft agreement reached on priority SASEC subregional customs projects or initiatives by 2015; initial agreement to pilot subregional initiatives to promote interface of Customs administration systems by 2015; 2 specialists for a total of 30 person-months)

(ii) Short-term experts/Resource persons (Key Deliverable: International experience on trade facilitation for consultation studies; Inputs: 5 resource persons with total combined inputs of 50 days or 2.27 person-months)

(iii) Domestic Trade Facilitation Coordinating Analyst (Key Deliverable: Progress Monitoring Reports, organization of workshops, meetings, supporting financial and accounting management; Inputs: 24 person-months)

Responsible Staff

Responsible ADB Officer Ronald Antonio Butiong
Responsible ADB Department South Asia Department
Responsible ADB Division Regional Cooperation and Operations Coordination Div, SARD
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines

Timetable

Concept Clearance 14 May 2013
Fact Finding -
MRM -
Approval 20 Aug 2013
Last Review Mission -
Last PDS Update 04 Mar 2016

TA 8435-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
20 Aug 2013 - 20 Aug 2013 31 Jul 2015 31 Dec 2018 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,275,000.00 1,500,000.00 0.00 0.00 0.00 0.00 2,775,000.00 20 Aug 2013 1,517,304.24
Title Document Type Document Date
Trade Facilitation in South Asia Technical Assistance Reports Aug 2013

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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