Trade Facilitation - Impact and Potential Gains - Kommerskollegium

Trade facilitation does not ”merely” benefit the trade or investing companiesalone, but also all transport intermediaries who would otherwise not have hadthe opportunity to transport the goods to the ”new” markets, hereby creating achain effect.Efficient administration and trade procedures are key components in attractinginvestments that in turn will create new business opportunities. In an era ofoutsourcing and JIT production techniques, the need for an efficient cargoinfrastructure, the rapid passage of inputs and finished goods through Customscontrols and streamlined transactions procedures speak for itself. A delay candisrupt the whole production and transport chain and may result in several potentialopportunities being impossible to profit from. When asked to identify thereasons for investing in particular countries, companies frequently points toefficient trade and Customs procedures as a key component in the decision process.38Since the positive effects of a high inflow of foreign currency (via FDIs) indeveloping countries are much higher and also because SMEs in generalconstitutes the most significant share of their business sector, this means that thegains from improved market access are especially evident in developing countries.The present development and use of e-business means that regular business doesnot necessarily have to be physically present on the market. As a result, e-businesscompanies will be able to reach geographical markets, which were previously notaccessible. This means that SMEs will not have to move to more developed,larger, or more profitable areas (countries), in essence reducing the ”brain drain”by keeping innovative companies.Apart from gains of cost savings and utilising business opportunity by improvingexisting trade procedures, trade facilitation and especially electronic business isalso about the business development aspect of trade, creating new businessopportunities. The UN foresees that electronic business and the use of the InternetWorld Wide Web and associated standards, will bring new business opportunitiesand revenue streams that are linked to modern business and transport solutions,which are estimated to be worth trillions of dollars. 395.4 Customer ValueIn an international business environment that is getting ever more competitive,with shrinking margins and increased financial constraints, the need to beinnovative and to retain and generate value to the customer is essential. It is inbusiness terms estimated to be five times costlier to attract a new customer thanto retain a previous customer. With this in hindsight, creating customer value, byproviding accurate information and fast delivery at a low cost, is a vitalcompetitive edge.38WTO, 1999. ”Trade Facilitation in Relation to Development – communication from the EuropeanCommunities”, page 2.39UN/CEFACT, 2002. ”Trade Facilitation in a Global Environment”, page 10.22