Automation of cargo clearance processes to improve trade facilitation: ADB
The pandemic has underscored the importance of trade facilitation within South Asia and with the region's neighbours, said the blog written by Aileen Pangilinan and Satish Reddy. "As national lockdowns begin to ease and supply chains resume operation, difficulties in cargo movement and clearance processes are expected to linger.PTI | New Delhi | Updated: 22-11-2020 11:54 IST | Created: 22-11-2020 11:38 IST
Expeditious cargo clearance with minimal physical interface for an efficient supply chain and quick adoption to digitisation would help countries within South Asia to improve trade amidst the pandemic even as the national lockdowns have begun to ease, according to an Asian Development Bank (ADB) blog post. The pandemic has underscored the importance of trade facilitation within South Asia and with the region's neighbours, said the blog written by Aileen Pangilinan and Satish Reddy.
"As national lockdowns begin to ease and supply chains resume operation, difficulties in cargo movement and clearance processes are expected to linger. "A look at the South Asia Subregional Economic Cooperation (SASEC) countries – Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal, and Sri Lanka – shows the importance to recovery of effective and modern trade facilitation measures," they said in the blog. Trade facilitation -- the measures to promote and ease trade -- was already underway in SASEC countries when the pandemic started. However, the customs agencies during the height of COVID-19 found it difficult to position staff at clearance locations, said the blog writers.
Thus border crossings couldn't function efficiently while the private sector, including importers, exporters, customs brokers and freight forwarders struggled to mobilise staff, as per the blog. They also experienced difficulties meeting clearance requirements like providing original documents and paying duties at the bank. These bottlenecks affected the movement of goods and services, including time-sensitive products like medicine and relief goods, it added.
"Automation of clearance processes, which should have played a greater role in helping cargo move seamlessly across borders, with limited need for human contact, affords an example of the gaps in trade facilitation progress. The writers said there is inadequate digitisation in many of the cross border regulatory agencies as well as lack of digital connectivity among these agencies, ports and terminal operators and shipping lines that has further hindered flow of cargo.
The pandemic has underscored the importance of trade facilitation, particularly for responding to crisis. "The need to clear cargo expeditiously, with minimum physical interface and to maintain efficient supply chains, has highlighted the need for an enhanced trade facilitation environment," they said.
Besides, the pandemic has highlighted the need to institutionalise business continuity protocols, cross-border pandemic management protocols, and workplace and staff safety procedures. Following advisory by SASEC Secretariat outlining measures to cope with the pandemic and facilitate trade, countries in the region simplified customs and regulatory procedures, waived the need for paper documents and reduced the scale of customs involvement.
Some also waived tariffs and fees on essential goods, deferring the payments and waiving terminal charges. Reforms such as automation and zero-contact customs clearance procedures , enhanced staff health protocols, new task forces to assist trade among others were deployed but the pandemic exposed core bottlenecks in trade facilitation processes across the subregion, ADB blog said. Although the SASEC countries have made progress in automation, there is still a need for physical interfacing and paper filings, which is difficult during the pandemic, the writers said.
Reddy is a trade facilitation expert and Pangilinan is the SASEC trade facilitation division of ADB.
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