Connect with us

ENGLISH

Report: Reducing Supply Chain Barriers Could Increase Global GDP Up To 6 Times More Than Removing All Import Tariffs

Published

on

world bankReducing supply chain barriers could increase global GDP and world trade much more than reducing all import tariffs, according to a new report released today by the World Economic Forum in collaboration with Bain & Company and the World Bank.

Enabling Trade: Valuing Growth Opportunities finds that if all countries reduce supply chain barriers halfway to global best practice, global GDP could increase by 4.7% and world trade by 14.5%, far outweighing the benefits from the elimination of all import tariffs. In comparison, completely eliminating tariffs could increase global GDP by 0.7% and world trade by 10.1%. Even a less ambitious set of reforms that moves countries halfway to regional best practice could increase global GDP by 2.6% and world trade by 9.4%. Economic gains from reducing supply chain barriers are also more evenly distributed across countries than the gains associated with tariff elimination. Regions that stand to benefit in particular under these scenarios are sub-Saharan Africa and South East Asia. Such large increases in GDP would be associated with positive effects on unemployment, potentially adding millions of jobs to the global workforce.

According to the report, lowering supply chain barriers is effective because it eliminates resource waste and reduces costs to trading firms and, by extension, lowers prices to consumers and businesses. Supply chain barriers can result from inefficient customs and administrative procedures, complex regulation and weaknesses in infrastructure services, among many others. The supply chain is the network of activities involved in producing and getting a product to consumers, and spans the manufacturing process as well as transport and distribution services.

Enabling Trade: Valuing Growth Opportunities was initiated by the Forum’s Global Agenda Councils on Logistics & Supply Chains and Global Trade & FDI. The report provides a wealth of information regarding how policies can create unnecessary supply chain costs and inefficiencies based on 18 case examples spanning multiple industries and regions. The case examples highlight that clusters of policies jointly impact supply chain performance; that a concerted approach is needed to cut across different policy domains; that there may be specific tipping points that need to be achieved for reductions in supply chain barriers to have a significant impact on trade; and that small and medium enterprises (SMEs) tend to face proportionally higher supply chain barriers and costs.

The report recommends that governments create a focal point to coordinate and oversee all regulation that directly impacts supply chains; that public-private partnerships be established to undertake regular data collection, monitoring and analysis of factors affecting supply chain performance; and that governments pursue a more holistic, supply-chain-centred approach towards international trade negotiations to ensure that trade agreements have greater relevance for international business and do more to benefit consumers and households.

“The Forum’s Enabling Trade programme has endeavoured to highlight the fundamental attributes that enable a country to facilitate trade,” said Børge Brende, Managing Director, World Economic Forum. “Through a vivid repository of case studies, which provide an on-the-ground view of everyday barriers that companies face along trade lanes, this report shows that removing barriers to supply chains can enhance economic competitiveness and generate significant welfare benefits and jobs for countries.”

“The case studies show that countries can lose their competitive advantage in terms of factor costs, if the costs associated with their supply chain barriers are high,” said Mark Gottfredson, Partner, Bain & Company. “The lesson for companies is the importance of understanding supply chain barriers and how the associated costs and delays can erode other sourcing advantages. For example, a case study on the apparel industry illustrates how delays at the border, inconsistent application of regulations, and infrastructure issues completely offset significant labour cost advantages for many countries.”

“Supply chain barriers are more significant impediments to trade than import tariffs,” said Bernard Hoekman, Director of the World Bank’s International Trade Department, who is also the Chair of the Forum’s Global Agenda Council on Logistics & Supply Chains. “Lowering these barriers will reduce costs for businesses, and help generate more jobs and economic opportunities for people.”

Some examples from the 18 country and sector case studies in the report include the following:

  • In Brazil, managing customs paperwork for exports of agricultural commodities can take 12 times longer than in the European Union (a full day versus a couple of hours).
  • Poor quality infrastructure services can increase the input material costs of consumer goods by up to 200% in certain African countries.
  • In Madagascar, supply chain barriers can account for about 4% of total revenues of a textile producer (through higher freight costs and increased inventories), eroding the benefits of duty-free access to export markets.
  • Obtaining licenses and lack of coordination among regulatory agencies in the US lead to delays in up to 30% of chemical shipments for one company – each late shipment costs US$ 60,000 per day.
  • In Russia, product testing and licensing in the computer sector can lead to high administrative costs and delay time-to-market anywhere from 10 days to eight weeks.
  • Local content requirements, rule-of-origin restrictions and pilferage at the border, can increase costs by 6-9% of consumer technology products in the Middle East and North Africa.
  • Eliminating supply chain barriers in the South East Asian rubber market could reduce carried inventories by 90 days, representing a 10% reduction in product cost.
  • India’s Preferential Market Access regulation, which provides preference for locally produced high-tech products in government procurement, could increase costs by 10%, over the cost of imports.
  • Adopting electronic documentation for the air cargo industry could yield US$ 12 billion in annual savings and prevent 70-80% of paperwork-related delays.
  • Easing regulatory compliance of international trade that SMEs face when selling through the Internet could increase cross-border SME sales by 60-80%.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

ENGLISH

Foreign Affairs Minister Ramona Mănescu: The Strategic Partnership with the US is the central focus of the Romanian diplomacy, while the accession to Schengen remains a priority

Published

on

Foreign Affairs Minister Ramona Mănescu said on Thursday that Romania’s accession to Schengen remains a priority of the Romanian diplomacy.

“Evoking the period when I was MEP, I can certainly tell you that (…) all the time both [the European] Parliament and the Commission said Romania was prepared to join Schengen, from a technical and logistical point of view. (…) Practically, we function de facto as a Schengen member state, but de jure we are not regarded as such. Romania doesn’t ask anything but the observance of the Treaty, we are members with full rights, we met our commitments and we seriously continue to meet them, no one can challenge Romania’s contribution to the security space, because we are not talking only about the eastern flank of NATO, we are also talking about EU’s eastern flank,” Ramona Mănescu told Antena 3 private television broadcaster on Thursday, quoted by Agerpres.

She maintained that the Romanian citizens “have all the right to get this well-deserved position of Schengen member state.”

“This is not something we must beg for, or be made a favour. It is provided in the Treaty and it must be observed. (…) I assure you we keep this on the agenda as priority topic, and all bilateral and extended discussions will include the Schengen accession component, we won’t stop from telling our colleagues in the EU that the Romanian citizens have the same rights,” Mănescu underscored, mentioning that, at present, in the Council half of the states support Romania’s accession to the free movement area, and the others oppose.

The Foreign Minister also pointed out that the Strategic Partnership with the US must remain the central focus of the Romanian diplomacy.

She also showed that Romania has the same position towards Russia as NATO and the EU.

“Romania’s position towards Russia starts in the first place from the vicinity we are in, but it is also part of the EU’s position regarding Russia, as we are part of the EU, we must get in line with EU’s stand. I am referring to sanctions, to certain limitations that we have in the dialogue and cooperation with Russia and I am particularly referring to the firm position we have as EU member, which we have always had, of observing the international legislative framework. We don’t ask too much from Russia as an actor on the geopolitical stage if we ask them to respect the international legislative framework. (…) It is the principle which we start from and which we cannot fail to keep not even for Russia, which is here, close to us. We have no reason to make an exception, because nothing is negotiable in this story,” Ramona Mănescu said.

According to the Minister, the relation with Russia represents “a key point in the stability in the area, in securing NATO’s eastern flank, in the manner in which we can further manage the discussions in the Black Sea. “The threats and gestures which Russia has repeatedly done in the Black Sea space, from a military stand, have been sanctioned all the time. (…) Both NATO and the EU have the same discourse. Romania cannot have a different discourse, because it is both part of the EU and NATO, and we are at the Black Sea,” she added.

Mănescu also said that she expected “the energy diplomacy to have its word,” in regards to the resources in the Black Sea.

“Our desire is for a partner such as Exxon to stay here and continue to work together as much and as well as possible. This entails our making some steps in an expected direction. I believe things will settle in the end, enter the right track and I even want to clarify this position shortly and the US partners must be convinced that we’ll be keeping the same line. (…) Mrs PM wants this as well,” Mănescu said.

Continue Reading

ENGLISH

Romania has a new Foreign Affairs Minister. Ramona Mănescu took the oath of office

Published

on

Ramona Mănescu, Nicolae Moga and Mihai Fifor took the oath of office on Wednesday in the presence of President Klaus Iohannis for the Interior and Foreign Affairs Ministries office, Deputy Prime Minister for implementing Romania’s strategic partnerships office respectively.

The head of state wished success to the new three members of the Dancila Cabinet.

The swearing-in ceremony was attended by Prime Minister Viorica Dancila, ministers, Deputy Speaker of the Deputies’ Chamber Florin Iordache, Government Secretary General Toni Grebla and presidential advisors.

President Klaus Iohannis signed on Wednesday the decrees appointing Nicolae Moga as Interior Minister and Ramona Mănescu as Foreign Affairs Minister, according to a Presidential Administration release.

Through another decree, Mihai Fifor was appointed Deputy Prime Minister for implementing Romania’s strategic partnerships.

Furthermore, Iohannis took note of Carmen Dan’s resignation from the Interior Ministry and signed the decree dismissing Teodor Meleșcanu from the Foreign Affairs Minister office.

Ramona Mănescu is a Romanian politician and lawyer. She was a Member of the European Parliament serving 2007 to 2013 and 2014 to 2019 from the National Liberal Party (till July 2017), active within the European People’s Party group in the European Parliament.

As part of this group she is a member of the European Parliament Committee on Foreign Affairs, vice-chair in the Delegation for relations with the Mashreq countries and a substitute member in the Committee on transport and tourism and in Delegation for relations with the Arab Peninsula.

Between 2007 and 2014 she was part of the ALDE group in the European Parliament, where she also held the position of Vice-President (11 November 2012 – June 2014) of the ALDE Party (Alliance of Liberals and Democrats for Europe Party). As a member of this group she is a coordinator in the Regional Development Committee and a member in the Committee on Employment and Social Affairs.

At the European Parliamentary elections from June 2014, Mănescu renewed her mandate within European Parliament, where she became a member of the European People’s Party group in the Parliament European.

Continue Reading

ENGLISH

Romania: President Klaus Iohannis appoints former MEP Ramona Mănescu as the new Foreign Affairs Minister

Published

on

President Klaus Iohannis signed on Wednesday the decrees appointing Nicolae Moga as Interior Minister and Ramona Mănescu as Foreign Affairs Minister, according to a Presidential Administration release.

Furthermore, Iohannis took note of Carmen Dan’s resignation from the Interior Ministry and signed the decree dismissing Teodor Melescanu from the Foreign Affairs Minister office.

Through another decree, Mihai Fifor was appointed Deputy Prime Minister for implementing Romania’s strategic partnerships.

The swearing-in ceremony takes place on Wednesday at 11:00hrs, at the Cotroceni Presidential Palace. 

Ramona Mănescu is a Romanian politician and lawyer. She was a Member of the European Parliament serving 2007 to 2013 and 2014 to 2019 from the National Liberal Party (till July 2017), active within the European People’s Party group in the European Parliament.

As part of this group she is a member of the European Parliament Committee on Foreign Affairs, vice-chair in the Delegation for relations with the Mashreq countries and a substitute member in the Committee on transport and tourism and in Delegation for relations with the Arab Peninsula.

Between 2007 and 2014 she was part of the ALDE group in the European Parliament, where she also held the position of Vice-President (11 November 2012 – June 2014) of the ALDE Party (Alliance of Liberals and Democrats for Europe Party). As a member of this group she is a coordinator in the Regional Development Committee and a member in the Committee on Employment and Social Affairs.

At the European Parliamentary elections from June 2014, Mănescu renewed her mandate within European Parliament, where she became a member of the European People’s Party group in the Parliament European.

Continue Reading

Cum pot vota românii din diaspora la alegerile prezidențiale

Facebook

Advertisement
Advertisement

Trending