RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/154
8 June 1999
(99-2312)
Council for Trade in Goods Original:  English
THE UN/ECE CEFACT’S TRADE FACILITATION WORK
Communication by UN/ECE
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1. Introduction
Accelerating the growth and scope of world trade requires further reductions in tariffs, the
maintenance of the principles of free trade, the facilitation of new entrants, especially SMEs, as wellas a substantial improvement in the efficiency of the trading process.  The latter requires the
widespread implementation of trade facilitation concepts and techniques.
International trade transactions generate a massive transfer of information along the trade,
transport and payment chain.  Trade Facilitation involves all government regulations and all public
sector arrangements that affect international trade.  In order for this overall process to become moreefficient and to achieve effective customs and border-crossing procedures, it is necessary to identify
and remove procedural barriers to trade and standardize the information requirements.  This is done
by simplifying procedures, encouraging the use of best business and administrative practices and by
applying relevant information technology, especially electronic business applications such as
Electronic Data Interchange (EDI).
Successful companies have also found that to create effective supply chains, they need to
revise their business methods to implement modern and effective information systems and tradefacilitation techniques.
For well over 30 years, the UN/ECE has been developing trade facilitation techniques,
recommendations and norms, which have been impl emented in many governmental and commercial
sectors across the world.  The work is based on user requirements from both private industry and
governments in order to create solutions that are accep table to all parties involved in the process.  The
goal is to make international business simple and easy.
Over the years, the scope of UN/ECE’s trade facilitation activities has become global. This
has occurred because member states have realized that standards and procedures in international trade
need to be global, not just regional, and also because countries from outside the UN/ECE have found
the work very relevant to their needs. Member States have also recognised that creating real, practicalsolutions to trading problems requires private sector participation on a global scale.
The simplification and the rationalisation of procedures and practices is led by the Centre for
the Facilitation of Procedures and Practices in Administration, Commerce and Transport,
UN/CEFACT.  The Centre was created with the objective of bringing together all interested parties in
order to develop a thorough, practical approach to the policy and technical areas of trade facilitation.To achieve this goal, all delegations are treated as equals, including:G/C/W/154
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• all United Nations Member States;
• private sector associations recognized by the Economic and Social Council
(ECOSOC) of  the United Nations;
• inter-governmental organizations and other United Nations bodies
The Centre’s overall objective is to improve the ability of business, trade and administrative
organizations to exchange products and relevant servic es effectively. This in turn will stimulate the
growth of global commerce.
A key goal is to develop and promote simple, transparent, effective, processes for global
commerce. The benefits of such an approach accrue to enterprises and governments alike.
They include:
• simplified procedures;
• integrated supply chains;
• reduced trade cycle times;
• streamlined business; and
• lower costs.
UN/CEFACT’s working methods are designed to meet the needs of business and as a result,
in UN/CEFACT’s working groups, a great number of private-sector technical experts work together
with experts from government administrations. This  expert participation, together with the private
sector’s participation at a policy level, is a unique feature of the Centre, which is forging new co-
operative relationships between private business and public organizations.
UN/CEFACT focuses on removing procedural barriers to trade and delivers effective
solutions via (1) analysis; (2) simplification; (3) harmonization; and (4) standardization. Applying this
approach to procedures and information flows is key, because procedures often mark the points where
information is gathered, distributed, interpreted or acted upon.
The results of the Centre’s work are encapsulated in recommendations for best practices and
in standards for process-related information. The best known recommendations are: the UN Layout
Key for documents, UN Electronic Data Interchange for Administration, Commerce and Transport(UN/EDIFACT), and the UN Location code (UN/LOCODE) for the identification of trading locations
around the world.
2. Recommendations
UN/ECE has issued 26 Trade Facilitation Recommendations on how to eliminate
cumbersome trade procedures and then simplify, harmonize and standardize the remaining proceduresand data.
These steps not only facilitate traditional, paper-based trade, they are also a prerequisite to
computerization and the use of related techniques such as Electronic Data Interchange. Contradictory
procedures cannot be computerized; difficult to fulfil procedures are not any easier to complete when
computerized; and the automation of unharmonized procedures and data, leads to incompatiblesystems that cannot communicate with each other. These problems are eliminated when trade
facilitation principles are applied prior to automation.G/C/W/154
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(a) The UN Layout Key (UNLK)
The UN Layout Key is a guideline for designing documents, that allows the use of
rationalized methods for preparing documents where information is typed only once for a full set of
export documents. Today, as a reflection of the increasing automation of trade data flows, the UN
Layout Key is also used by information systems either for converting data records to printed output orin the screen displays used for data entry.
UN/CEFACT has not forgotten that much of the world’s trade and data exchange still takes
place on paper (even if the data are from, or are eventually stored, on a computer). Therefore, it
continues to develop recommendations, based on the UN Layout Key, for the design of key
international trade documents such as bills of lading, invoices, and purchase orders and dangerous
goods transport declarations.
Some well-known documents based upon the UN Layout Key include: the European Union’s
Single Administrative Document, the General System of Preferences Certificate, the IATA air waybill
and the International Bill of Lading.  In addition, many countries have based some or all of their
national administrative documents on the UN Layout Key including Canada, China, France, Japan,
India, the Philippines, Singapore and Tanzania.
The growing use of the UN Layout Key for electronic forms on the World Wide Web shows
that this is a valid approach, regardless of the technology in which it is implemented. UN/CEFACT’s
current work programme includes the development of electronic equivalents for all the major aligned
paper documents.
(b) Other Recommendations
Another well-known recommendation is the UN Location Code (LOCODE) which includes
codes for over twenty-six thousand specific locations around the world where international trade takes
place. These codes are widely used by companies in the banking, tourism and transport industries as
well as by statistical agencies.  Some other UN/CEFACT recommendations include the Country
Code, which has been adopted by ISO, Shipping Ma rks which are used almost universally within the
shipping industry, Units of Measure, and Guidelines for the agreements between organizations thatwish to exchange information using EDI.
3. Electronic Business
Based on constantly advancing telecommunications and computer technology, electronic
trading and electronic commerce are rapidly becoming commonplace. For the majority of these
activities, which are business-to-business exchanges, Electronic Data Interchange (EDI) is
fundamental. “Electronic commerce” is often used to refer to consumers buying from businesses via
the Internet and the Web), even though this is only one part of the overall picture. The Web provides ahuman to computer interface for the manual entry of data for one transaction at a time. This is suitable
for consumer to enterprise transactions but when  businesses communicate with one another, or with
an administration, the data to be exchanged often is of a large volume and already exists in one of
their computers. In this case, of business-to-business communications, EDI is the most effective
electronic commerce technology.
(a) UN Electronic Data Interchange for Administration, Commerce and Transport
(UN/EDIFACT)
The UN/ECE has developed, and maintains, the onl y international standard for EDI, which is
known as UN Electronic Data Interchange for Administration, Commerce and Transport orG/C/W/154
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“UN/EDIFACT”. There are now over 150 UN/ED IFACT messages covering many domains of
private and public sector interest.
In addition, UN/ECE is already looking towards new technologies and is working to develop
the next generation of EDI standards, which it expects, will be based upon new approaches both to
data representation and to its exchange.
Widely used in international trade, UN/EDIF ACT has been adopted and implemented by the
European Union as well as by many individual countries such as Australia, Brazil, Japan, and the
Republic of Korea and Singapore. It is also the preferred EDI standard within the US government as
outlined in the Federal Information Processing Standard FIPS 161-2 for EDI.
Other major users of UN/EDIFACT include:
• Banks who are members of the Society for World-wide Interbank Financial Telecommunications
(S.W.I.F.T.) who use it for communication between themselves and customers;
• The International Article Numbering Associatio n(EAN) and over 13,000 retail and wholesale
companies belonging to their national member associations;
• The international electronics industry; for example, IBM, HP and DEC;
• The shipping industry, supported by IC S (International Chamber of Shipping);
• The International Air Transport Association (IATA);
• The World Customs Organization (WCO) comprising 150 countries, recommends the use of
UN/EDIFACT to its members;
• National statistical administrations and central banks for the exchange of statistical data among
themselves and with organizations like Eurostat;
• The International Monetary Fund and the Bank for International Settlements;
• A variety of national administrations who us e UN/EDIFACT in areas including education,
transport, health care and taxation;
• The international Continuous Acquisition and Logistics Support (CALS) community.
Further, a really powerful combination exists when the Internet WWW and EDI are combined
and integrated. One example of this is WEB EDI where electronic forms are created for entering data
on the WWW. Subsequently, the data entered into the form is automatically translated into a
UN/EDIFACT message for sending. The two technologies complement one another, giving
consumers an easy to access and use interface, while providing data to companies in the same globalformat that they use with their business customers and suppliers.
4. UN/CEFACT’s international partnerships
In a world of increasing liberalization, trade facilitation has become an even more critical
factor in improving trade performance. At the same time, larger and larger trading areas are being
created, with enormous economic power.
This proliferation of trading areas could result in regional procedures and a variety of
overlapping and different agreements for improving trade procedures. Obviously, the national orregional use of different procedures and standards can create barriers to trade. Thus, the full benefits
of trade facilitation can be achieved only through worldwide partnership and co-operation.
Consequently, for some years now, the UN/ECE has be en giving a high priority to international
partnership, communications and co-ordination.
The creation of UN/CEFACT has provided an opportunity to renew and enlarge existing
partnerships with organizations that have provided a wide range of expertise to our work for manyG/C/W/154
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years, including: the World Customs Organization (WCO), the International Organization for
Standardization (ISO), the International Article Numbering Association (EAN) and the Society for
Worldwide Interbank Financial Transactions (S.W.I.F.T.). In addition, we have also worked on
strengthening close collaboration and co-ordinat ion with the other UN Regional Commissions and in
particular ESCAP and ESCWA, as well as UNCTAD, ITC and UNCITRAL. Several joint projectswith UNCTAD have been particularly fruitful, including the revision of UN/CEFACT
Recommendations and awareness ra ising activities.  In addition, the legal work programme has
benefited from the active participation of representatives from UNCITRAL.
In the field of standardization, the UN/ECE has a special relationship with ISO and IEC, (the
International Electrotechnical Commission). All three organizations are signatories of a Memorandum
of Understanding that establishes a framework for a highest level of co-operation and co-ordination in
their work on Electronic Business.  International industry groups as CALS are also participatingmembers.  The results of this co-operation are reflected in a number of joint groups and ISO’s
endorsement of the basic sta ndards underlying UN/EDIFACT.
Clearly, facilitating trade means facilitating “legitimate” trade. It is not the purpose of trade
facilitation to make it easier for “illegitimate tr ade.” For this reason, the UN/ECE maintains close
links with the World Customs Organization and the UN Office for Drug Control and CrimePrevention. Our conviction is that facilitating legitimate trade will free resources to focus on crime
and drug prevention.
5. Co-operation between UN/ECE and WTO
WTO participates in the work of UN/CEFACT and the UN/ECE is also committed to
working with the WTO to achieve increased simplificat ion and transparency in trade. In this context,
it is important to note that the UN/ECE has observer status with WTO’s Committee on Trade and
Development as well as its Committee on Technical Barriers to Trade where, in conformance with the
TBT Agreement of WTO, UN/ECE is recognized as an international standardization body.  In
addition, the process has been launched to grant observer status to the UN/ECE in other WTO
committees, notably the Council for Trade in Goods.
The following are some proposals on how the UN/ECE and WTO could co-operate to
promote and implement trade facilitation measures:
Over the years, a substantial amount of know-how on trade facilitation issues has been
developed by UN/CEFACT.  Its e xperts and the UN/ECE secretariat have technical expertise and, in
this area, are a centre of excellence within the UN.  In the WTO environment, circumstances will
often arise where recommendations or standards are required to provide solutions for imperfections in
the trading process.  In such cases, WTO could exploit UN/CEFACT’s competence in this area andget it to function as the expert body to whom requests for standards or procedural solutions are
addressed, much in the same way as it does with the WCO for the Technical Committee on Customs
Valuation.  In this case, rather than setting up an  alternative machinery, WTO could issue requests for
standardization or procedural actions which wo uld then be taken on board by UN/CEFACT and
addressed by its experts. These solutions could subsequently be issued as recommendations and,potentially, adopted as a code of practice or embedded in a WTO legal framework.
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