Picard Conference, 28 Sept. 2017

9:00-10:30: Measuring Trade Facilitation and Border

Management Performance

Dr Andrew Grainger, Dr Duncan Shaw

“A proposed method for measuring

trade facilitation”

Contact details:

– Andrew: grainger [a] tradefacilation.co.uk

– Duncan: duncan.shaw [a] Nottingham.ac.uk

Contacts Dr Andrew Grainger

Dr Duncan Shaw

This is research in the making..

Page: 2

Aim

• Propose a method that can

measure the quality of trade

facilitation

We need you to:

• Comment on what is

proposed

• Contribute ideas and

suggestions

• Lend support and participate

BACKGROUND AND CONTEXT

Part 1:

Contacts Dr Andrew Grainger

Dr Duncan Shaw

Background: Measurement in Business and Customs

• “Reform by numbers”

– Thomas Cantens, Robert Ireland, Gaël

Raballand (2013)

– How measurement and various quantification

techniques may be used to fight against

corruption, improve cross-border celerity,

boost revenue collection, and optimise the

use of public resources

• “What cant be measured cant be

managed”

– “Scientific Management” à la Taylor (1912)

– Guiding premise in modern “Performance

management” practices

Page: 4

Contacts Dr Andrew Grainger

Dr Duncan Shaw

Well tested solutions..

• Benchmarking and Key

Performance Indictors (KPIs)

• Balanced Score Card (BSC)

– Accommodates different

perspectives

– Sets Goals

– Agree measures

– Take multiple perspectives

• E.g. Financial, Internal,

Customer, Learning and

Innovation

Kaplan, Robert S.; Norton, David P. (1992) “The Balanced Scorecard--Measures That

Drive Performance”. Harvard Business Review, Jan/Feb, Vol. 70 Issue 1, p71-79

Contacts Dr Andrew Grainger

Dr Duncan Shaw

Measurement in Trade Facilitation

• Country level (macro perspective) – Logistics Performance Index (WB)

– Trading Across Borders (WB)

– OECD Trade Facilitation Indicators

– UN Global Survey on Trade Facilitation and Paperless Trade implementation

– Global Enabling Report (WEF)

– Trade Restrictiveness Index (WB)

• Country level (micro perspective) – UN ESCAP Business Process Analysis (by selected

business sectors)

• Performance of border agencies – WCO Time Release Study

– Administration specific performance measurement instruments

Page: 6

Contacts Dr Andrew Grainger

Dr Duncan Shaw

WTO Trade Facilitation Agreement

• It is not enough knowing whether countries have implemented appropriate requirements – We would also want to know how well those measures

have been implemented

– Are there opportunities to facilitate trade outside the narrowly defined obligations of the WTO?

– What is the operational quality of the trade and customs environment?

• How should quality be measured and assessed?

• How can countries be held accountable to improving their trade facilitation related performance?

1.Publication and Availability of

Information

2. Opportunity to Comment, Information

Before Entry Into Force and

Consultation

3. Advance Rulings

4. Appeal or Review Procedures

5. Other Measures to Enhance

Impartiality, No-Discrimination and

Transparency

Control Intended for Import

6. Disciplines on Fees and Charges

Imposed on or in connection with

Importation and Exportation

7. Release and Clearance of Goods

8. Border Agency Co-operation

9. Movement of Goods under Customs

10. Formalities Connected with

Importation and Exportation and Transit

11. Freedom of Transit

12. Customs Co-operation

23. Institutional Arrangements

Page: 7

THE PROPOSED METHOD

Part 2:

Page: 8

Contacts Dr Andrew Grainger

Dr Duncan Shaw

Method Summary

i. Identify and describe

key transaction processes

ii. Identify and describe stakeholders

iii. Identify and describe stakeholder

needs

iv. Define key performance

indicators (KPIs)

v. System wide

consultation cycles

v. Continuous improvement by repeating steps

Page: 9

Contacts Dr Andrew Grainger

Dr Duncan Shaw

i. Identify and describe key processes

UNESCAP – Business Process Analysis

Page: 10

Contacts Dr Andrew Grainger

Dr Duncan Shaw

ii. Identify and describe stakeholders

Process of

transition for

supplier to buyer

Physical

movement

Seller

stakeholder

Buyer

stakeholder

stakeholderstakeholder

stakeholder stakeholder

stakeholder stakeholder

stakeholder

Physical movement of good or service

Activities required for good or service to get to buyer (physical and informational, serial and parallel)

Page: 11

Contacts Dr Andrew Grainger

Dr Duncan Shaw

ii. Identify and describe stakeholders

• Businesses – Traders

• Small, large, importers, exports, experienced, in-experienced, agents (direct or indirect representatives)

– Intermediaries

• Transport and related services

• Shipping Lines, Non Vessel Owning Common Carrier (NVOCC), Airlines, Charter Operators, Trucking and Haulage Companies, Railway Companies, Logistics Service Providers, Freight Forwarders, Customs Brokers, Banks and Finance Companies, Insurance Companies

– Facilities and infrastructure

• Seaports, Airports, Rail-terminals, Inland Container Ports, Port Operators and Stevedores, Cargo Handlers and Handling Agents, Warehouse Operators, Transit-shed Operators, IT Service Providers

Page: 12

Contacts Dr Andrew Grainger

Dr Duncan Shaw

ii. Identify and describe stakeholders

Regulatory Regimes:

Regulatory Category Examples of related activity

Revenue Collection Collection of Customs duties, excise duties and other

indirect taxes; payment of duties and fees; management

of bonds and other financial securities

Safety and Security Security and anti smuggling controls; dangerous goods;

vehicle checks; immigration and visa formalities; export

licences

Environment and Health Phytosanitary, veterinary and hygiene controls; health and

safety measures; CITES controls; ships’ waste

Consumer Protection Product testing; labelling; conformity checks with

marketing standards (e.g. fruit and vegetables)

Trade Policy Administration of Quota restrictions; Agriculture refunds

Page: 13

Contacts Dr Andrew Grainger

Dr Duncan Shaw

ii. Identify and describe stakeholders

• Government

– Customs

– Immigration

– Transport

– Quarantine services, including health, sanitary and

phytosanitary controls

– Standards and consumer protection

– Export Licensing

– Police and Security

– Etc.Etc.Etc.

Page: 14

Contacts Dr Andrew Grainger

Dr Duncan Shaw

iii. Identify and describe stakeholder needs

• Examples: – For Businesses:

• Reduction of noncompliance risks

• Costs that do not undermine competitiveness

• Predictable clearance times

• No surprises

– For Consumers

• Efficient markets

• Safe goods

– Society

• Safeguard regulatory objectives

• Economic growth

– For the Customs Administrations

• Best use of limited inspection resources

• Meet stakeholder expectations

Page: 15

Contacts Dr Andrew Grainger

Dr Duncan Shaw

iv. Define key performance indicators (KPIs)

• Likely to be very diverse

– Dependent on:

• Capabilities and supporting institutions

• Types of trades and business sectors

• Supply chain arrangements

• Different stakeholders will have different needs

– Multiple perspectives:

• Multilateral, Bilateral / Regional, National, Local

• Societal, Political, Administrative, Customer (i.e.. the private

sector; customs’ customers)

• Case-study: influencing UK customs procedures

Page: 16

HMRC (National

Level)

Customs in other

EU Member

States

US Customs and

Border Protection

European

Commission

DG TAXUD

UK Trade

Associations and

Interest Groups

Local Trade

Associations and

Groupings

WCO

European

Associations and

Interest Groups

International

Associations and

Interest Groups

Advise on

concerns

HMRC (Local

Level)

Share

concernsApply UK/EU procedures

Escalate issues

where they cannot be

resolved locally

- Share concerns

- Participate in

Consultation

Escalate issues

where it cannot be

resolved locally

Escalate issues

where they cannot be

resolved in the UK

- Share concerns

(e.g. through TCG)

- Participate in

consultations

Seek to influence

through agency

of members

Negotiate

UK position

Negotiate preferred

position

Cooperation

agreements

Escalate issues

where they cannot be

resolved in the EU

- Share concerns

(e.g. as NGOs)

- Participate in

consultation

- Share concerns

(e.g. as NGO)

- Participate in

consultation

Develop int.

instruments

Develop int.

instruments

Individual

Businesses

Send goods

Advise on

concerns

Operate

CTPAT Regime

Advise on

concerns

Cooperation

agreements

Coordinate

UK position with

other EU members

Operate

CSI Regime

Develop int.

instruments

Develop int.

instruments

International Level

EU Level

(Regional)

UK Level (National)

Third Country

Level (USA)

UK Level

(Local)

Develop int.

instruments

Develop int.

instruments

Develop int.

instruments

Abbreviations:

Int. International

Public Sector

Private Sector

Demarcation of policy levels

Legend:

Local Port

Local Port

Local Port...

Other International

Institutions

Other International

Institutions

Other International

Institutions

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Contacts Dr Andrew Grainger

Dr Duncan Shaw

v. System wide consultation cycles

• Multiple perspectives and reporting

requirements

• At different policy levels

– Local port user groups

– Joint Customs Consultative Committees

– National trade facilitation committees

– Regional trade facilitation bodies

– Global trade facilitation champions / WTO

Page: 18

TO DO:

Part 3:

Page: 19

Contacts Dr Andrew Grainger

Dr Duncan Shaw

To do: 1

• Build a directory that lists trade

facilitation related datasets

• Web-based

– A place to go to identify what types of

data and measures are already collected

– A place where one can quickly establish

what types of performance data that is

needed, is missing

Page: 20

A place from which to draw inspiration for

identifying relevant KPIs

Contacts Dr Andrew Grainger

Dr Duncan Shaw

To do: 2

• Develop a “Balanced Score Card” – That gives a dashboard type view about

the quality of the trade and customs environment

– Takes into account key perspective • E.g.: impact upon businesses, effectiveness of

administration, societal expectations, innovation

Page: 21

Contacts Dr Andrew Grainger

Dr Duncan Shaw

To do: 3

• Institutions to:

– agree and set KPIs

– periodically review KPIs

– hold stakeholders accountable to

KPIs

• Local, national, regional/bilateral,

international Define Target and

Procedures

Plan

Act

Check

Do Implement

Procedures

Evaluate

Performance

Priorities

Opportunities

Page: 22

Contacts Dr Andrew Grainger

Dr Duncan Shaw

To do: 4

• Apply an agreed method that:

– gives a view about the quality of trade

facilitation

– sets KPIs that are:

• relevant to the respective stakeholders

• achievable

• transparent

– needs Institutions that can:

• assess and review KPI

• hold stakeholders accountable to their

performance

Page: 23

Contacts Dr Andrew Grainger

Dr Duncan Shaw

And we need you to..

1. Answer the questions on the Feedback Form

2. Talk to us: • Is the method a good idea?

• Comment, make alternative suggestions

3. Suggest pilot studies and related activities • e.g. country specific, sector specific, administration

specific, trade lane specific

4. Pass on our presentation and Feedback Form

to other interested parties • email grainger [a] tradefacilitation.co.uk

5. Keep in touch!!!

24

Contacts Dr Andrew Grainger

Dr Duncan Shaw

Contacts

Dr Andrew Grainger

grainger [a] tradefaciliation.co.uk

Dr Duncan Shaw

duncan.shaw [a] nottingham.ac.uk

Page: 25