The proposed TA will:
" support the operationalization of a Customs Subgroup of the SASEC Trade Facilitation Working Group for improved coordination and cooperation among customs officials in the SASEC countries;
" promote the exchange of experience in, and knowledge on international good practices on, customs reforms and modernization among South Asian countries; and
" help develop a framework for interface of modern customs administration systems between and among SASEC countries.
The expected impact of the TA is more efficient, transparent, secure and service-oriented processing of cross border trade in South Asia.
The intended outcome of the TA is modern and effective Customs administration and/or management in participating countries.
The planned outputs of the TA are as follows:
(i) Output 1: Enhanced cooperation between and among Customs agencies in South Asia
(ii) Output 2: Framework for interface of Customs administration systems in the SASEC countries
|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.