UNCTAD hopes to launch Global Trade Facilitation index soon

Pull factor expected to trigger a race to simplicity among governments in trade facilitation Bidhu Bhushan Palo | @TheDollarBiz

Despite progerss in the last two decades, India stands at 134 and 179 in World Bank's Ease of Doing Business and Starting a Business 2014 rankings respectively out of the total 189 countries monitored.

“Simplicity is the most difficult thing to secure in this world; it is the last limit of experience and the last effort of genius.” This quote by author George Sand (Amantine-Lucile-Aurore Dupin) dates back to the 19th century, but perhaps no one understands this better than the World Trade Organisation (WTO). After the Bali conference in 2013, WTO claimed that the Trade Facilitation Agreement (TFA) agreed in the Bali Package was the biggest breakthrough since the formation of WTO, but has struggled to finalise the TFA months after the agreed deadline of July 31, 2014. However, help may be at hand. After the launch of the Global Enterprise Registration (GER) index, the United Nations Conference on Trade Development (UNCTAD) is hoping to launch a similar index for trade to provide global traders easy access to trade procedures in all parts of the world. UNCTAD, which is governed by its 194 member States, is a UN body that works on development issues related to international trade. It joined hands with the Global Entrepreneurship Week (GEW) to launch the GER index at the biennial UNCTAD World Investment Forum 2014 (13-16 October).

Ease of Doing Business - Within SA-TheDollarBusiness

Of the total 189 countries monitored by the World Bank, India stands at 134 and 179 in Ease of Doing Business and in Starting a Business 2014 rankings respectively. India holds the lowest rank (No.8) among South Asian countries in Staring a Business index (Source - World Bank)

The GER index portal (www.globalereg.co) aims to help improve ease of doing business worldwide and lists online business registration systems by country. It is backed by various UN member states including USA, Luxembourg, Netherlands, France, Switzerland, and several developing countries interested in knowing what the best practices are. The move is expected to encourage countries simplify procedures in registering a business, a crucial factor for economic prosperity. Jonathan Ortmans, President, GEW, said, “New firm formation is the primary driver of long-term economic growth – as well as innovation and wealth creation in all types of economies. As entrepreneurial ecosystems develop around the world, it will be those that simplify the process for entrepreneurs to start and scale their enterprises that are the most successful.” Kurt Tong, Principal Deputy Assistant Secretary of the Bureau of Economic and Business Affairs, USA, said. “It (GER) is a one-stop-shop to help entrepreneurs start businesses legally anywhere in the world.” Importantly, he added that the GER portal is expected to spur a "race to simplicity" among governments. UNTCAD hopes to launch a similar index -- tentatively called the Global Trade Facilitation (GTF) or Global Trade Procedures (GTP) -- for global traders. While pushing countries to adopt the Trade Facilitation Agreement (TFA) is proving to be difficult, a GTF may help pull countries towards this goal. “A TFA would probably significantly accelerate the simplification of trade procedures and the application of the WTO Bali agreement on Trade Facilitation,” Frank Grozel, Coordinator, Business Facilitation Programme, UNCTAD, told The Dollar Business.

GER team - Frank Grozel - TheDollarBusiness

(GER UNCTAD/GEW Team; Mr. Frank Grozel, 4th from left)

Finding the right online single window to begin business is still difficult. It takes days to find such a portal for countries like France, and there are often several such sites, but only one really allows to register a company. According to Frank Grozel, “GER should result in considerably easier procedures to register a business: one form, one fee and a few minutes. This is already clearly possible in several countries (including developing countries such as Tanzania, El Salvador and Guatemala), and there is no reason why a similar process couldn't be implemented everywhere.” Grozel adds, “The peer pressure might bring governments to radically simplify their business registration procedures. They will be able to see on the GER site what the best practices are and then replicate those easily.” A similar portal could help trade facilitation as well. Grozel says, “Once demonstrated that simplifying is not difficult, and that it mainly depends on the political will, traders will have a much better case in asking governments to simplify administrative procedures relating to import and export. First by detailing them clearly online (through information portals, such as those listed in the second index on the GER site); and hopefully by creating single windows allowing traders to apply simultaneously for all the necessary certificates and permits (previous licences, Customs clearance, port/airport authorities, technical controls, etc).”

This article was published on October 24, 2014.

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The Dollar Business Bureau - Oct 24, 2014 09:18 IST

UNCTAD hopes to launch Global Trade Facilitation index soon

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