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United Nations Conference on Trade and Development - Institute for ...

United Nations Conference on Trade and Development - Institute for ...

Rutgers Model

Rutgers Model ong>Unitedong> ong>Nationsong> 2006 5 Constraints on Transit Trade States that must engage in transit trade, which hinders their access to global markets. Some of these constraints overlap and link with each other, but have their own characteristics. 8 In order to alleviate the added costs of this form of trade, these constraints must be addressed either by the landlocked states themselves, or by regional and multilateral trading organizations. Border and customs control affect the different safety, environmental and other standards and regulations. Put simply, every time cargo passes through a different border, it is subject to costs and delays as well as additional constraints placed by the state. Moreover, potentially dangerous goods, such as chemicals and pesticides, may be forbidden from entering certain states, further increasing transshipment costs by exporting states. Inadequate transport infrastructure often complicates the transport process because there may be times where a heavy influx of cargo may not be able to be accommodated by the existing transport systems and can cause bottlenecks Fourteen Major Constraints Facing Transit Trade • different safety, environmental and other standards and regulations; • inadequate transport infrastructure; • insufficient use of information and communication technology (ICTs); • visa and other requirements for drivers or crews; • protection of national operators; • risk and insurance; • security checkpoints; • lack of coordination; • transportation documentation; • inadequate legal framework; • inexistence of a national customs transit system; • border crossing formalities and delays; • transit fees; and • unilateral actions. causing the delay in shipment of other goods. Information and communications technology (ICTs) can affect the logistics of the transport system. The crews of the freight transport may also be subject to visa and customs regulations at national borders. Administrative issues, such as insurance and permits, can complicate the entire trade processes, as specific rules can very considerably among states. An adequate legal framework governing international trade needs to be developed to assist the states required to trade in this fashion. If the implementation of an international regulatory 8 Ibid, 5-7.

Rutgers Model ong>Unitedong> ong>Nationsong> 2006 6 system were in place, this would effectively solve the issues regarding the complicated customs issues. According to UNCTAD, transshipment costs relative to the costs of goods sold for African landlocked developing countries was “20.7%, which is four times as high as the average for developed market economic countries (5.1%) and almost twice the average of African developing countries(12.7%).” 9 It is no surprise that the cost of transporting freight is higher for landlocked countries, but the four-fold makes growth in these states difficult. If these costs were to be reduced, increased profits could be reinvested into infrastructure to better facilitate future trade. Automated Systems for Customs Data In 1981, benefiting from the advances in information technology the UN ong>Conferenceong> on Trade and Development developed the Automated Systems for Customs Data (ASYCUDA), a computerized management system “which covers most foreign trade procedures. The system handles manifests and customs declarations, accounting procedures, transit and suspense procedures.” 10 This system is configurable by individual countries to specific needs for their trade transactions. The goals of the ASYCUDA program are to reform “the customs clearance process. It [also] aims at speeding up customs clearance through the introduction on computerization and simplification of procedures and this minimizing administrative costs to the business community” and the country’s economy. 11 UNCTAD implements the ASYCUDA system at the request of a given nation, and most of the funding required for the implementation of the ASYCUDA system comes from UNCTAD. At the onset of systems implementation, all “procedures, documents, and codes are harmonized and the software is adapted to the country’s needs.” 12 The final step involves the training of customs officials and installment of systems. 9 TD/B/COM.3/EM.22/2 Design and Implementation of Transit Transport Arrangements” 10 “About ASYCUDA.” 11 “The ASYCUDA Programme,” ASYCUDA, http://www.asycuda.org/programme.asp, (accessed 1 March 2006). 12 “How ASYCUDA is implemented” ASYCUDA. http://asycuda.org/project.asp

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