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Trading Across

Borders
Why does facilitating trading across borders matter?

Competitiveness: in a globalised world, making the ability to compete in the


global markets, and to become a part of global supply chains is important
Outdated regulations, inefficient customs administration,
excessive document requirements, inadequate
infrastructure, cumbersome port procedures, lack of
coordination at border posts all hinder a firms ability
to trade with the world

Grounded in economics literature:


More effective than tariff reduction - 10% reduction in exporting costs
increases exports by 4.7% (study on sub-Saharan Africa)
Good for SMEs cutting the days to clear exports by half could enable its
share of exports in total sales to increase from 1.6% to 4.5% (study on
APEC)

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Trading across borders measures the documents,
time and cost to export and import

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Four major steps in the trading process
EXPORTING

Customs and Ports and


Document
Transportation other border terminal
preparation
agency handling

Letter of Arranging for Waiting for vessel


Customs
Credit transport to berth/depart
Inspections
Other Transport Loading and
documents Technical/health unloading the
(customs Loading and container
unloading goods Security
declaration
Terminal handling
forms, etc)

Customs and Ports and


Document Transportation terminal
other border
preparation handling
agency

IMPORTING
Trading Across Borders - Case Study
Assumptions

Exporting and importing from the most populous city in the country
to/from the countrys largest overseas trade partner
via ocean transport using the primary seaport used for that city
in a dry cargo 20-ft full container load (FCL), weighs 10 tons and is valued
at US$20,000.
Product is one of the countrys leading export and import products, and is
o not hazardous
o not include military items
o not require refrigeration or any other special environment
o not require special phytosanitary or environmental safety standards
Payment is through a Letter of Credit
Company does not operate within an export processing zone or other
special export/import privileges

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Where is trading across borders easier?

Global good practice


Singapore
Paper-free electronic data interchange
Hong Kong SAR, China (EDI) system.
Estonia
Pre-arrival submission of customs
Korea, Rep. declaration and manifest.

United Arab Emirates Less than 10% of containers are


physically controlled, using risk based
Finland
inspection systems.
Denmark
Single Window for obtaining trade
Sweden documents and approvals
Norway
Efficient ports and transportation
Israel infrastructure

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Mozambique ranks 136th on the ease of trading
across borders
Mozambique ranks 136th on the ease of trading across
borders (cont.)
Administrative improvements at customs in 2009/10 helped
reduce the time required to clear goods traded in Mozambique
Questions?

For more information please visit:


www.doingbusiness.org