Trade Facilitation - Impact and Potential Gains - Kommerskollegium

Companies, especially larger companies are sometimes reluctant to implementnew international systems and standards, because of the existence of companyinternalwell-integrated administrative systems. Changing all or parts of afunctioning internal system and implementing a new standardised system willconstitute a direct cost (sometimes perceived to be higher than the gain for theindividual company). This might deter companies from implementing tradefacilitatingmeasures, even if the business community as a whole has great gainsto make. It is thus important to include the business community at an early stagein the development process of trade facilitation in order to create legitimacy andownership and make the process as smooth and effective as possible.The increased transparency that often follows trade facilitation might also unveilpreviously invisible costs, which can deter companies from getting involved in orcontinuing a trade facilitation process, it is thus necessary to stress that thesecosts were present beforehand and should not be attached to the costs of tradefacilitating measures. 51Another challenge is the problem of cause and effect. What in one part of a tradenetwork may appear to be a trade facilitation measure can in other parts createdifficulties in other parts. 52 It is very important to work with an internationalperspective and use international standards when facilitating national tradeprocedures. It must be stressed that there is no blueprint of a perfect tradefacilitation programme that fits all countries, on the contrary, trade facilitativemeasurers must be adapted to each country’s individual needs, capabilities andgeneral situation, but it must have an international perspective in order to createthe highest positive impact on economic development.It is relatively easy to measure the cost of trade facilitation in developingcountries if only looking at the costs of the current aid programmes. It musthowever be emphasised that the costs of not facilitating trade procedures will bemany times higher and in the long run unbearable.51An example could be the cost of implementing and using an EDI-system. Costs gets visualisedin the accounting and can be mistaken for an added cost, when it in reality substitutes costs related tophone, paperwork and postage.52It can be argued that PSI may be a solution to the costs of Customs in an importing country. Howeverit will firstly create an additional problem and cost in the exporting country and secondly, the exporterwill include this cost in its export price, resulting in the cost finally being borne by the consumers inthe importing country.26