Time savings reduce trade transaction costs
Trade transaction costs across the Asia-Pacific region have fallen 5 percent between 2006 and 2010, resulting in savings of $58.7 billion for businesses, according to a new report prepared on behalf of the Asia-Pacific Economic Cooperation.
APEC said an independent research team has investigated whether the organization has met its target of reducing trade transaction costs between 2007 and 2010, after implementing a comprehensive action plan to facilitate trade in the Asia-Pacific region.
The report found that although fees and charges for importers and exporters increased across the region between 2006 and 2010, the amount of time taken to clear goods across borders decreased, resulting in an overall drop of 5 percent in trade transaction costs.
“The reduction is good news for businesses and economies in the Asia-Pacific region,” said Denis Hew, director of the Policy Support Unit, the team responsible for the report. “Given the uncertainty of the global economy, trade facilitation is now even more crucial to supporting sustainable economic growth. Reducing trade transaction costs boosts the profitability of businesses and helps create jobs. Introducing measures so that goods flow more easily at, across and behind borders also increases the competitiveness of markets and brings lower prices for consumers.”
The report is being circulated to APEC trade ministers and senior officials for discussion in Honolulu this week.
It shows total fees and charges rose in real terms across the region by $6.3 billion between 2006 and 2010 for importing and exporting all merchandise, an increase of 4.8 percent. However the amount of total time taken to complete trade-related procedures dropped 6.2 percent, which represents a decrease in costs of $65 billion. Thus, overall trade transaction costs resulted in total savings for businesses of $58.7 billion.
The costs – the fees and charges plus the monetary value of the time spent getting goods to market – relate to document preparation, customs clearance and technical control, ports and terminal handling and inland transport and handling.
Monica Contreras, chair of APEC’s Committee on Trade and Investment, welcomed the findings, which she said showed APEC has successfully identified obstacles that hinder trade and implemented actions and measures to address them.
The new report shows that by 2010, net savings were realized in most stages of the logistics chain across the APEC region. The average time spent to prepare documentation, for example, was reduced by two days for both imports and exports.
On average it took 17 days and $842 to complete an APEC export transaction for a single, standard container of goods in 2006, and 17 days and $941 for an import transaction. In 2010, it took 15 days and $856 for an export transaction and $15 days and $923 for an import transaction.
To see the report, click here