The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian

Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI
does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology
used may not necessarily be consistent with ADB official terms.

Trade facilitation and regulatory management

in ASEAN: Insights from ERIA studies

Rashesh Shrestha, Economist

Economic Research Institute for ASEAN and East Asia (ERIA)

Presented at:
8TH OECD-AMRO-ADB/ADBI-ERIA Asian Regional Roundtable on Macroeconomic and
Structural Policies
13-14 February 2020, Tokyo
Context
• Tariffs are already at very low levels, so addressing other barriers
to trade should be a top priority.

• These reforms are central to enhance ASEAN trade, investment

and economic performance in the future.

• Both unilateral and coordinated ASEAN-wide efforts in

undertaking trade facilitation and reforms
– A target of 10% reduction in trade costs by 2020 set in 2017 by ASEAN
Economic Ministers
– Good Regulatory Practice: a key component to realize ASEAN Economic
Community 2015 Blueprint
SME participation in international trade
Country [Survey Small (5-19) Medium Large (100+) Percent of firms
Year] (20-99) exporting directly or
Brunei - - - indirectly (at least 10% of
Cambodia [2016] 10.7 19.6 59.6 sales) by size (number of
Indonesia [2015] 8.9 10.7 32.7 employees)
Lao PDR [2018] 14.1 6.8 17.4
Malaysia [2015] 11.2 33.8 74.8
Myanmar [2016] 1.3 10.7 42.6
Philippines [2016] 5.4 9.9 26.4
Singapore - - -
Thailand [2016] 2.2 4.5 29.5
Vietnam [2015] 6.4 15.4 42
China [2012] 14.3 24.8 40.5
India [2014] 2.7 10 23.4
Source: World Bank Enterprise Survey, various years
ERIA’s ASTFI-TTC project

1 2 3
Construct a Collect data in Analytical report
with policy
new set of each AMS recommendations
indicators
Conceptualizing trade costs

Trade cost
Costs associated with trading across borders, including language, culture, etc, for
example, cost associated with market research, contracts etc

Trading cost
The part of trade cost associated with moving goods across borders
including shipping, logistics, freight and insurance

Trade transactions cost

The part of trading cost that consists of time and
monetary cost of compliance with regulatory
process.
Current status of trade facilitation (secondary data)

• Singapore, Malaysia, and Thailand are front runners in TF

• Vietnam stands out for a sharp reduction in time for documentary

compliance for export and import in EODB-TAB 2015-2018.

• Mixed performance for Indonesia, the Philippines, and Brunei

• Highly challenging TF but largely improving situation in Cambodia,

Laos, and Myanmar
 Some measures of trade cost: UNESCAP
Viet Nam 96

Thailand 87

Singapore 142

Philippines 186

Myanmar 262

Malaysia 98

Lao PDR 314

Indonesia 161

Cambodia 193

284
Brunei Darussalam

0 50 100 150 200 250 300 350

2010 2015
Note: data above are the simple average of per country export to its ASEAN partners
Source: ERIA Staff Calculation based on UNESCAP Bilateral Trade Cost Data
World Bank Trading Across Borders data (2019)

• Documentary
compliance time
high in BN, KH,
ID, LA, PH, VN
• Border
compliance time
high in ID, MM,
PH
Trade facilitation and trade costs

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Elements of trade facilitation
• Transparency and information on laws, regulations and
procedures
• Communication with and active engagement of the private sector
• Release and clearance formalities
• Import/Export formalities
• Transit facilitation
• Transport facilitation
Some insights from ERIA studies on TF (1)
• AMSs do very well in transparency, information and
communication and engagement with private sector.

• More work needed in streamlining release and clearance

formalities and documentary procedure
– Some low-hanging fruit include dwell time and time release study
publication and self-certification; electronic system and single windows

• Cross border coordination and transit facilitation needs more work

– ASEAN transport facilitation agreements (AFAFGIT, AFAFIST and AFMT) yet
to be fully implemented (ratified but laws and regulations need updating)
Some insights from ERIA studies on TF (2)
• TF improvement is a long and continuous process for TF to be a
source of competitive advantage amidst changing environments.

• Strong political will and continuing policy focus at national level

important for accelerated improvement.

• Stronger commitment and concerted action at ASEAN level

needed

• Need to capture the quality of performance and TF environment

as well as differences in quality in operations and implementation
Regulatory management
• A good regulatory process is essential to ensure a good business
environment while achieving the intended regulatory objectives

• Good Regulatory Practice in the AEC Blueprint 2025

– GRP in the AEC Blueprint 2025
– Characteristic 2 – ‘A Competitive, Innovative and Dynamic ASEAN’
• Element B7 – ‘Effective, Efficient, Coherent and Responsive Regulations and
Good Regulatory Practice’
– Other elements:
• Element B6 - Good Governance;
• Element D2 - Strengthening the role of the private Sector;
• Element D5 - Contribution of Stakeholders on Regional Integration Efforts.
Worldwide Governance Indicator – Regulatory
Quality

Note: best score: +2.5; worst score: -2.5. Source: World Bank Worldwide Governance Indicators database
ASEAN Work Plan on GRP 2016-2025

Four Priority Areas of the

ASEAN Work Plan on GRP 2016-2025

1) Secure 2) Strengthen 3) Conduct piloting 4) Develop

commitments to strategic efforts to of GRP in strategic awareness and
GRP at the political implement GRP sectors at the capacity building
level regional level on GRP
➢HLTF-EI, Baseline
Study in RMS, ➢NTMs, business ➢Ongoing
➢GRP Core Principles Handbook facilitation, business
registration
ASEAN Good Regulatory Practice (GRP) Core
Principles
▪ Endorsed at 50th AEM, August 2018, Singapore
▪ Provides broad parameters for assessing the application of GRP in ASEAN
▪ Non-binding document to be implemented on a best-endeavor basis by each
relevant AEC sector body or AMS’ national regulatory systems
▪ To implement GRP Core Principles effectively, a coherent RMS is required.

ASEAN GRP Core Principles

1. Clarity in policy rationale, objectives, & institutional frameworks;

2. Produce benefits that justify costs & be least distortive to the markets
3. Be consistent, transparent, & practical
4. Support regional regulatory cooperation
5. Promote stakeholder engagement & participation;
6. Be subject to regular review for continued relevance, efficiency, & effectiveness.
Baseline Study on RMS in ASEAN
• Objectives of the Study:
– Review definitions used by different AMS;
– Review ongoing work on RMS at national & regional levels, & assess these
against ASEAN GRP Core Principles;
– Identify areas/case studies where RMS are observed, as well as challenges
that may limit GRP Core Principles implementation;
– Provide practical & specific recommendations to improve RMS for the
effective implementation of GRP Core Principles

• Study Approach
– RMS Baseline Study Survey Questionnaire
– Selected case studies in AMSs and regional initiatives
Status of GRP implementation in ASEAN (1)
• Great diversity of regulatory frameworks of AMS

• AMS are increasingly adopting or applying GRP more extensively.

– The drive toward a well-performing, requisite RMS takes time and its
evolution is shaped by the characteristics of each AMS.

• The use of rigorous regulatory impact assessment (RIA) varies

across AMSs.

• Various tools for regulatory review (e.g. regulatory guillotine) has

been applied by some AMS

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Status of GRP implementation in ASEAN (2)
• There is a need for greater capacity building by establishing
training institutions and/or institutionalised training programmes.

• A single national body mandated with oversight of regulatory

reform process within the country could help to accelerate
reform.

• More explicit government support is needed to further

institutionalize GRP as it requires a whole-of-government
approach.

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THANK YOU!

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