Reducing 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%.
EC Communication chief warns: Disinformation is a real threat to public health during COVID-19 crisis
Disinformation has presented itself as a real threat to public health during the outbreak of the novel coronavirus, Pia Ahrenkilde Hansen, the head of the DG Communication of the European Commission, said on Wednesday.
During the conference “Communicating Europe: corona, recovery and beyond” the director of CaleaEuropeană.ro platform, Dan Cărbunaru, asked the Director-General of DG Communication of the European Executive, regarding the European Union instruments used in the hybrid warfare, but also how the European Commission intends to act through its expertise against misinformation and to protect the citizens against fears.
Pia Ahrenkilde Hansen, as Director-General DG Communication, explained to CaleaEuropeană.ro the steps that the European executive has taken, in order to take effective measures against disinformation and mitigate the real threat to public health.
Dan Cărbunaru: ”As you finished your presentation, initially, talking about misinformation, I would like to ask you something about it, because each crisis that hit Europe was treated as an opportunity usually to develop new tools for providing an increased European approach in solving European citizens problems. And in the last years, we saw the pressure, we felt the pressure heavily put by the propaganda and the tools of hybrid war. And my question for you is, as we know that we have some tools; EU is stuck on the task force, for instance, do you intend does the Commission intend to protect the public’s fears, using this expertise, this kind of expertise already, let’s say tested in combat, and which is on the European Union, the major risk identified so far in terms of hybrid war in Europe.”
Pia Ahrenkilde Hansen: Thank you very much for this very important question.
”Of course indeed as you also stressed there are several actors in this at the institutional level in the European Union. You are right, that it’s absolutely something that has grown very rapidly since the beginning of the crisis, and it has continued to spread, as we saw the crisis the coronavirus crisis, playout and indeed, it has been playing very much on people’s fears, in relation to this particular crisis and, and the increased use of social media. And it has, in the context of the coronavirus crisis, it has really even presented a real threat to public health, as well as, indeed, and that’s not new. Those who have propagated this information have taken advantage of the situation to sometimes push political agendas. As far as the action that we have been taken. We have definitely reverted also in this crisis many myths, a lot of misinformation because there’s misinformation and then there’s disinformation this deliberate malign attempt to manipulate opinion and information, but I mentioned, everything that has been circulating about the health aspects of the disease, of course, or the, the disease itself or the treatments or the vaccines I referred to it already, as well as also. And there are, indeed, some foreign actors have come in as well. When it comes to the perceived lack of EU response or perceived lack of solidarity.
Our president was very conscious of this from an early moment and asked us to have as part of this website that she asked us to create, to communicate what Europe is doing to fight the coronavirus crisis. She also asked us to have a disinformation section there.
So that we actually in all languages, and in a format that makes it very easy also to share these stories setting the record straight if you like on social media.
This is one part of the, of the strategy, it is of course to provide the stories, and the facts in a very accessible way also when it comes to the crisis but in a broader frame when it comes to dealing with this information it’s also about informing and educating the public about this disinformation itself, how it works as a phenomenon, and indeed the danger that it poses in this case both to public health, and to democracy, and this is something that this commission is also very concerned about, you will have heard our vice president Jurova also in addition to the president herself and other members of the college have been very strongly voicing their concern in this area. So, communicating actually very actively and regularly, about how you actually identify disinformation, and how a typical online user can protect himself from disinformation is also part of the response. So, without having the time to go into all the details, a very multifaceted approach is needed. Also involving working with platforms as we do and we have done for some time now, such as Facebook, Twitter, YouTube, and since this month, also Tick Tock on developing standards to maintain the online information environment clean from harmful misinformation and disinformation.
And then we have our code of practice which is actually the first of its kind of a self-regulatory effort in this area which is definitely called upon to grow even more important and ambitious as we as we go along, and we will see to which extent, it needs to be complemented with with with regulation.
We also need to fund, and that’s what we’re doing, we’re funding researchers and civil society organizations that are dedicated to studying also the phenomenon of disinformation and to finding solutions and, and fact-checking is also very independent fact-checking of course it’s not something we do, but we support it, as well as developing new technologies we will also be able to be helped by artificial intelligence in this respect, definitely. And therefore, and then also protecting elections and public information to do this.
You refer to the EEAS and it’s true that the EEAS has played a truly a crucial role in fighting disinformation as a foreign policy threat, you refer to that and that has expanded to now, including more teams that are focusing on different regions outside the EU, where this information might originate, and you will find in relation to the corona crisis, which quite comprehensive information on where we are stepping up the action, and this includes also doing more on social media in the debate and the Member States.
On the 10th of June when we published a document on how we intend to step up the action and learn the lessons, from the coronavirus crisis when it comes to disinformation. But by the end of the day, it’s also about building trust in institutions having a strong communications environment, and this support to independent media that I mentioned, in addition to because it happens, it starts with ourselves and how do we actually explain things that we know to our friends and families and how do we think about sharing social media posts that we see, this is something that all of us have to pay very much attention to. So, checking your sources and thinking before sharing I think is also the part of the reflex that everyone needs to embrace so promoting that is very important as well.”
MEP Vasile Blaga: The place of Romania is in Europe, so in Schengen
MEP Vasile Blaga (PNL, EPP) welcomes the European Parliament’s resolution on the Schengen area in the context of the crisis triggered by COVID-19 and stresses that “the rapid and complete restoration of free cross-border movement is necessary.”
In the statement offered exclusively for Caleaeuropeană.ro, the Romanian MEP mentioned that it is essential that the Council’s effort regarding the integration of Romania and Bulgaria in the Schengen area to be intensified.
According to the Liberal MEP, every day that passes with Romania and Bulgaria outside the Schengen area contradicts the fundamental values of the EU: “The place of Romania and Bulgaria is in Europe, so in Schengen. We are Europeans, equal in rights, in solidarity, and every day that passes with Romania and Bulgaria outside the Schengen area contradicts these fundamental values on the basis of which the European Union was built. ”
At the same time, Vasile Blaga reminds us that the pressures from the European Parliament, for Romania’s full integration into the European Union to become a reality, will not stop.
Last week, the European Parliament voted on a resolution calling on the Member States and the Council of the European Union to take the necessary measures to admit Bulgaria, Romania, and Croatia into the Schengen area.
MEP Vasile Blaga welcomes the European Commission’s plan for post-pandemic economic recovery: Romania on the 6th place in Union in budget size
MEP Vasile Blaga (PNL, EPP) welcomes the European Commission’s 750 billion euro plan for post-pandemic economic recovery: “The level of sums allocated to Romania for economic recovery shows that our place in the EU has strengthened. We are on the 6th place in the union in the size of the recovery budget after the COVID-19 crisis ”.
According to the MEP, this amount of 740 billion euros is “welcome for the recovery of the economies affected by the pandemic crisis.”
“The allocation of 750 billion EUR is a good signal that proves that European solidarity is not just a word in the wind that feeds the chorus of Eurosceptics. We also welcome the allocation to Romania of over 30 billion euros for economic recovery, an amount that puts us in sixth place in the top of budgets allocated post-pandemic “, he added.
Vasile Blaga emphasizes that out of the total of 750 billion EUR, 33 billion euros are allocated to Romania, approximately 19 billion EUR represent non-reimbursable grants: “In the next stage it is extremely important to develop the programs that make this budget an engine of the relaunch of the Romanian economy. There are major problems in the sectors that were automatically closed during the emergency and alert period – here we must work with priority “, the MEP noted.
For Romania to have a balanced reconstruction of the economy, Vasile Blaga claims that “the money must be spent in full.”
“Romania has the chance to restart large sectors – such as infrastructure – which may themselves be the spearheads to pull the economy in the coming years,” he said.
At the same time, Vasile Blaga hopes that the plan proposed by the European Commission will be accepted, even if there are different opinions among the 27 states of the Union regarding this ambitious economic recovery plan: “I bet, however, on a unanimous political agreement, which follows to be initialed at the next European summit, which will most likely t
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