RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/148
8 April 1999
(99-1401)
Council for Trade in Goods Original: English
TRADE FACILITATION
Communication by the UNCTAD Secretariat
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I. INTRODUCTION
1. International trade of a country is a key element of its national economy.  It requires simple trade
formalities, procedures and operations, co-operative customs administration's attitude, and efficient
transport operations necessary in today’s modern door-to-door logistics chains.
2. Trade facilitation covers any possible measure that would lead to a reduction in the various costs
that are included in the sales price of consumer goods.  In addition to the costs of raw materials,
components and labour incorporated in export products, there are hidden costs related to the regularity
and strict conformity with the delivery plan requested by the buyer such as: costs of time lost in getting
the necessary authorizations, of delays in deliveries (which affect production plans), of trucks idling at
borders, etc.
3. It is important that small potential exporters are not discouraged by the complexity of operations
and formalities involved in interna tional trade.  Trade facilitation contributes to increasing the number of
participants in international trade, when a growin g number of small and medium-sized enterprises, able
to produce manufactured quality goods, do not find it too complicated to compete in foreign markets.
4. Computerization can provide solutions to some procedural or documentary problems.
UNCTAD’s development and implementation of computerized systems such as ASYCUDA and ACIS
are a major step in the right direction.  However, computerizing the activities of the various parties
involved in the control or monitoring of extern al trade flows will be beneficial only if existing
administrative and commercial practices are reformed in depth prior to the procedures being
computerized.
II. UNCTAD’S WORK IN THE FIELD OF TRADE FACILITATION
5. The work of the UNCTAD Secretariat in the field of trade facilitation has four equally important
aspects:
(a) Participation in the development of trade facilitation measures;
(b) Technical assistance in the implementation of trade facilitation measures;
(c) Work in the field of multimodal transport; and
(d) Cooperation with other institutions on trade facilitation and customs reform and
modernization.G/C/W/148
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6. In other words, UNCTAD does not develop trade facilitation measures, nor does it make rules on
trade facilitation, but it participates in the work of the other organizations that do.
7. In addition to this, the UNCTAD Secretariat, fro m time to time, also participates in some WCO
meetings that may deal with trade facilitation measures , for example, considerations of the revision of the
Kyoto Convention and customs valuation.  In this connection, when UNCTAD in its regular technical
assistance work, finds a need for particular training in these fields, it asks WCO to undertake the actual
training, particularly in customs valuation.
8. The UNCTAD Secratariat’s main concern in trade facilitation is to provide technical assistance
to developing countries and transition economies with the actual implementation of trade facilitation
measures.  This takes the following aspects:
(a) Implementation of ASYCUDA and ACIS;
(b) Implementation of basic trade facilitation measures; and
(c) Implementation of Trade Points.
9. This paper deals exclusively with the second of these three aspects, since it is the one on which
the least has been set out in other UNCTAD documents.  A graphic representation of the issues which
may fall under trade facilitation is attached.
III. UNCTAD’S PARTICIPATION IN THE DEVELOPMENT OF TRADE FACILITATION
MEASURES
10. The UNCTAD Secretariat has for the last 15-20 years actively participated in the work of the
UN/ECE’s work in trade facilitation, with the Chief of FALPRO acting as the Technical Advisor of WP-
4 Group of Experts on simplification of documents, wi th the development of the UN-LOCODE etc.  This
cooperation continues with the UNCTAD Secretariat participating actively in UN/CEFACT meetings and
with the updating of the Trade Facilitation r ecommendations, for example, Recommendation No. 4
(National Trade Facilitation Bodies) which has ju st been approved by UN/CEFACT.  Furthermore,
through UN/CEFACT, the UNCTAD Secretariat works in close collaboration with the International
Organization for Standardization (ISO) in the field of trade-related codes a nd norms. UN/CEFACT trade
facilitation standards and recommendations for reducing and automating procedures and paperwork
complement UNCTAD trade facilitation activities to provide delivery mechanisms and assistance for the
UN/ECE "products".  The standards elaborated by  the UN/ECE WP.4/CEFACT such as the UN Layout
Key for forms, or the UN/EDIFACT rules and dictionaries together with ISO standards for codes
(country, currency, etc.) form an integral part of UNCTAD’s introduction of Trade Facilitation measuresin developing countries.
IV. UNCTAD’S TECHNICAL ASSISTANCE
11. The UNCTAD Secretariat provides - on request and subject to funding -  technical assistance to
developing countries and transition economies.  Technical assistance projects in trade facilitation aim at
promoting a sustainable growth of a country’s foreign trade by correcting inefficiencies inbred in the
trade and transport system.  This involves the identification of impediments to international trade andtransport and the elaboration of specific proposals to facilitate the movement of goods.  It leads to the
streamlining and simplification of transport, cust oms and trade procedures, information flows and
documentation, along the lines recommended by UN/ CEFACT.  It is also complementary to the
implementation of large, e.g. World Bank financed, transport infrastructure projects, as well as of the
ASYCUDA and ACIS systems.  Furthermore, these projects create awareness of practical andcommercial measures to foster foreign trade and assist in identifying new market opportunities.
12. UNCTAD’s trade facilitation projects include the compilation, review and implementation of a
number of measures to facilitate trade flows, to promote national transport activities, to increaseG/C/W/148
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awareness on efficient commercial practices in international trade, to provide the customs administration
with proper working tools with a view to increasing  efficiency and transparency in customs clearance
time and revenue collection and in generating timely and reliable trade data.  These projects develop the
necessary synergies for the co-ordination and im plementation of ASYCUDA and ACIS.  Their major
expected results are: the establishment of legal and institutional frameworks, of commercially viable
reforms and instruments to foster efficient trade and transport operations (with direct and active
participation of various public and private agencies and operative Trade Points, and  through National
Facilitation Bodies representing all functional interests); and the establishment of adequate training
programmes.
13. The UNCTAD Secretariat has carried out a number of trade facilitation projects (e.g. Colombia,
Ethiopia, Indonesia, Mozambique, Nepal, Pakistan, th e Andean Pact, etc.), in close collaboration with
regional UN Commissions (in particular ESCAP), wi th financial support from the UNDP, the World
Bank and the countries themselves.  UNCTAD has also established a partnership with the private sectorby supporting the activities of a non-governmental, private-sector driven forum for the promotion of
multimodal transport.
V. UNCTAD’S WORK IN THE FIELD OF MULTIMODAL TRANSPORT
14. The UNCTAD Secretariat has, for the past 25 years been leading research and technical
assistance in the field of multimodal transport and ha s a considerable in-house expertise on this subject.
It is presently contributing to the work of the UN/ECE (Working Group on Combined Transport) and the
International Chamber of Commerce (Cargo Coordinating Forum) on the legal aspects of multimodal
transport.  The UNCTAD Secretariat considers that the solution to the complex issue of a regulatory
framework for multimodal transport calls for careful study of all the possible solutions, including a
possible review of the United Nations Conventi on on International Multimodal Transport of Goods
(1980) which has not yet entered into force.
15. At the Second meeting of the Council on Trade in Goods informal group on Trade Facilitation
(7 December 1998), the European Community presented a communication on “Issues Relating to the
Physical Movement of Consignments (Transport and Transit) & Payment, Insurance and Other Financial
Questions Affecting Cross-border Trade in Goods” (G/C/W/133).  This communication stressed that
work in the field of multimodal transport, including negotiable transport documents in electronic form as
well as other simplification measures, are important aspects of trade facilitation.  This also goes for the
need to harmonize legal regimes in the field of multimodal transport.
16. In Section 3 (Intermodal/Multimodal Cooperat ion) of this communication, the EU suggested
“considering a WTO-led programme to centrally review  the current regulatory framework, with the aim
to coordinate and oversee the development of a single  set of international regulations for goods moving
intermodally ”.  The paper continued: “ The WTO is in our view uniquely well positioned to carry out this
task as it is not captive to any particular intere st group and can achieve the optimum balance between
public and commercial interests..... The Community believes that the proposed review is best carried out
within the framework of WTO trade facilitation, so as to ensure the right focus on movement of goods ”.
17. However, this issue is primarily one which deals with private law contracts.   A thorough review
of the current regulatory framework of multimodal transport would require the participation of both
NGOs and all United Nations Member States.  It would consequently seem that UNCTAD or another
United Nations body, such as UNCITRAL, might be a more appropriate forum for such a review, since
meetings of those bodies are open not only to Governments, but also to a very important number of otheractors, such as NGOs and States not members of the WTO.G/C/W/148
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VI. UNCTAD’S COOPERATION IN TRADE FACILITATION AND IN CUSTOMS
REFORM/MODERNIZATION
United Nations
18. As mentioned above, the UNCTAD Secretariat is cooperating with the UN/ECE on trade
facilitation issues.  In this way, the UNCTAD Trade Efficiency Initiative has proved to be a very
powerful tool to increase substantially the use of internationally agreed standards.  Both the ASYCUDA
and ACIS programmes (which build on international codes and standards) and the UN/ECE outputs (e.g.
the UN lay-out key or the programme of work on Combined Transport) are examples of such
cooperation.  The UNCTAD Secretariat also cooperates with the other regional commissions in the field
of Trade Facilitation.
19. The United Nations Statistical Office and individual countries benefit from UNCTAD’s Trade
Efficiency initiative through the introduction of Trade Facilitation measures and the implementation ofASYCUDA projects through the availability of up-to-da te reliable national foreign trade statistics from
some of the ASYCUDA user countries.  There is a large potential to increase further these benefits if
solutions could be found to relational difficulties which exist in many countries between statistical
departments and customs administrations, and which inhibit the flow of data.
World Customs Organization
20. UNCTAD’s Trade Facilitation efforts, have a long-standing history of close cooperation first
with the Customs Coordination Council and now with the World Customs Organization (WCO).  More
recently, the cooperation has been reinforced through common efforts in the field of WCO’s Customs
Reform and Modernization Programme (CRM).  Further joint action is under review on the dissemination
of the WCO’s CD-ROM based classification data base.
World Bank and International Monetary Fund
21. Both the World Bank and the IMF are strongly supporting the implementation of Trade
Facilitation measures to reform, and modernize customs administrations clearance procedures.  Jointmissions have also been organized on one or two occasions with the Fiscal Affairs and Statistical
departments of the IMF.  In many countries the World Bank and the IMF can now use data available
from ASYCUDA for their analytical work.
World Trade Organization
22. Last but not the least, the UNCTAD Secretaria t actively participates in the WTO’s analytical
work on trade facilitation aimed at assessing the scope for WTO rules in this area, as set out in the WTO
Singapore Ministerial Declaration of December 1996.  In the future, the UNCTAD Secretariat would be
pleased to extend this technical assistance work to include assistance to these countries with regard to the
implementation of WTO trade facilitation rules should such rules be agreed within the WTO.G/C/W/148
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National
Facilitation
BodyWorkshops
and seminars
on
International
Trade
Identification of
major issues affecting
international trade and transport
Operational
issuesLegal
issuesCommercial
issues
CustomsBank
Insurance
Transport
liability
Others...Foreign
exchangeIncoterms
Documentary
credit
Organization of
Prof. A ssoc.Documentation
Use of EDI
Others...AutomatizationPhysical
problems
Documents
Transit issues:
operational agreements
between CustomsTransportBorder
crossing
Mode s  &
InterfacesOperators
SeaRoad
Rail
Terminals
(and ICDs)AirMarketingKnow-how
Prof.
association
Us e of EDI
(cargo tracking)Equipment
Others...Others...
Elaboration of
possible solutions acceptable by all parties concerned
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