by NUR HANANI AZMAN & MUHAMAD AMIR AIMAN AZLAN / pic by BLOOMBERG
MALAYSIA and other Asia Pacific (APAC) countries will see more manufacturing and investment hubs post-pandemic which could change the regional trade dynamic.
United Nations (UN) Economic and Social Commission for Asia and the Pacific (ESCAP) director of trade, investment and innovation Rupa Chanda said it is difficult for many sectors to have the skills and capacity of the existing hubs but she does anticipate decentralisation of production.
“We already see many multinational corporations shifting their production area around.
“If countries need to leverage on this dynamic, they need to focus on their diversification strategy so they can participate and benefit from this,” she said in a webinar on Launch of the Asia-Pacific Trade Facilitation Report 2021: Supply Chain Resilience and Trade Facilitation amid the Covid-19 Pandemic yesterday.
The Covid-19 pandemic highlighted the importance of prompt international support and cooperation for continuous supplies of critical medical goods, more so given the need for doing so sustainably and inclusively.
The high cost of trade in APAC continues to rise, but ongoing efforts to facilitate commerce will help keep goods flowing throughout the region, according to a new report by the ESCAP and the Asian Development Bank (ADB).
Economies in the region have shown continued progress in streamlining trade procedures despite the Covid-19 pandemic and the subsequent supply chain disruptions and surge in shipping costs — which hit an all-time peak this year.
Implementation of 31 general and digital trade facilitation measures rose on average across the region to 64.9% in 2021, about six percentage points higher than in 2019.
UN Under-Secretary General and ESCAP Executive Secretary Armida Salsiah Alisjahbana said if countries speed up their implementation of digital trade schemes, average trade costs could drop by more than 13%.
“Besides digitalisation, there is also a need to pursue trade facilitation policies that make trade more sustainable and inclusive, leaving no one behind.
“Measures are specifically needed to support small and medium enterprises, women and the agricultural sector to make recovery more sustainable,” she said.
ADB VP for knowledge management and sustainable development Bambang Susantono said border closures, export controls, and health and safety protocols have disrupted production and the flow of goods across international boundaries, with dire effects on the supplies of critical goods such as food, personal protective equipment and vaccines, especially for the poor and vulnerable.
“The report further explained the role of the World Trade Organisation regarding the Trade Facilitation Agreement and the related UN treaty on cross-border paperless trade in Asia and the Pacific to accelerate recovery post-pandemic while trade openness remains a key element.
“As the pandemic has quickened the move to trade digitalisation, more work is needed to leverage digital technologies to streamline customs procedures and electronic exchange of information, and implement national and regional single windows for document submission and clearance,” he explained.
About two-thirds of 20 Asia-Pacific Economic Cooperation economies implemented new trade facilitation measures to mitigate supply chain disruptions.
Many countries in the region also accelerated measures related to transparency and institutional coordination, simplification of customs procedures and expedited clearance as the pandemic had shown the significance of prompt global and regional support and cooperation to ensure continuous supplies of critical goods.
According to the report, trade openness remains a key element for economic recovery.
“Countries should refrain from using export restrictions and other non-tariff measures. They should also increase transparency on trade restrictions implemented during and in the aftermath of Covid-19,” the report noted.