Plan. Reforms include upgrading physical facilities, administrative structure, automation of customs, and simplification and harmonization of procedure (Government of Nepal MoF). The reforms resulted in a revenue increase by Rs.900 million in the first six months of 2004 from the same period in the previous year ( _Gorkhapatra Daily_ , January 24, 2004).

Compared to East Asia, however, South Asia continues to lag behind in deploying technology in customs administration. For example, EDI is widely adopted in East Asian countries, such as Singapore, Thailand, the Philippines, and Indonesia (World Bank, 2003). In contrast, EDI systems are not yet to be implemented in Bhutan, Nepal, and Sri Lanka (UNESCAP, 2001).<sup>21</sup> India moved to adopt EDI systems in 1992 and the Confederation of Indian Industry has been promoting implementation of EDI in all major customs points (Hindu Business Line, July 5, 2004).

In order to advance reform, South Asia can learn from experiences in East Asia. One such example is the Philippines’ modernization of customs.<sup>22</sup> Like many countries in South Asia, the Philippines relied on multiple customs clearance documents to clear exports and imports. It was reported that customs clearance involved 10 separate documents in multiple copies, with over 90 steps, and more than 40 signatures (World Bank, 2001). By implementing the ASYCUDA system for customs clearance developed by UNCTAD, there has been a significant reduction in paper transactions. Another example is the customs administration reform in China. In October 2003, Shanghai customs began on a seven day schedule to reduce congestion and accelerate trade (Shanghai WTO Affairs Consultation Center, 2003). Together with the application of information technology, administrative reform contributed to Shanghai’s high efficiency rating among Chinese customs clearance posts.

# (4) Standards and Technical Regulations

Like other developing countries, those in South Asia confront challenges and can realize opportunities for market expansion in meeting standards and technical regulations. These measures are directly related to trade facilitation. Based on data in the World Bank Technical Barriers to Trade (TBT) database, South Asian firms in India and Pakistan report standards and technical regulations as very important to export success – at a higher percentage than countries in other regions (Figure 6). There are specific examples across the region in other countries which suggest standards as a means to facilitate trade are critical. For example, Nepal’s woolen carpets industry was severely affected when Germany, an importer of 90 percent of the products, required eco-labels on the products (Shrestha and Shakya, 2002). Nepalese exporters often fail to present “quarantine and health standard certificate” at the border with India (Shrestha and Shakya, 2002). Similarly, the Indian coffee industry has had difficulties in meeting market standards.<sup>23</sup>

> 21 Sri Lanka has been a member of the Asia Pacific Council for Trade Facilitation and Electronic Business (AFACT) since 1995 and sponsors the National EDI/EC Committee which promotes the application of EDI.

> 22 For an overview of reform efforts in the Philippines see Parayno (2004).

> 23 For an overview of standards and technical barriers in India see: Saqib (2003).

15