| Project Detail |
Project Name Support for Sustainable and Digital Trade Facilitation in Asia and the Pacific
Project Number 58087-001
Country / Economy Regional
Cambodia
Thailand
Project Status Active
Project Type / Modality of Assistance Technical Assistance
The knowledge and support technical assistance (TA) will support the implementation of sustainable and digital trade facilitation measures in the DMCs through research and capacity building. This will be done by collaborating with the United Nations ESCAP for the conduct of the APTFFs, and by complementing trade facilitation initiatives in other ADB departments through studies and capacity building activities. The TA will contribute to the achievement of the objectives of the subregional programs such as the CAREC, GMS, and SASEC, and the memorandum of understanding between ADB and ESCAP, in relation to trade facilitation and climate change concerns. It will, likewise, support the Operational Plan for Regional Cooperation and Integration, 20192024 which aims for expanded global and regional trade and investment opportunities through trade facilitation knowledge work.
Project Rationale and Linkage to Country/Regional Strategy
The implementation of trade facilitation measures in Asia and the Pacific increased from 64% in 2021 to 67% in 2023. However, subregional implementation rates vary, for example, Central Asia at 74%, South Asia at 65%, and the Pacific at 42%. Despite the overall upward trend, the implementation of measures for cross-border paperless trade and inclusive trade are still lagging behind, with cross-border paperless trade measures standing at only 42%. Furthermore, low implementation rates are observed in trade facilitation for SMEs (42%), female-owned firms (41%), and trade finance facilitation (29%).
Meanwhile, the role of trade facilitation is evolving, driven by the challenges posed by COVID-19, geopolitical tensions which revealed the vulnerabilities of global linkages and economic fragmentation. The emphasis on digitalization, inclusiveness, and environmental sustainability is redefining the globalization agenda. The impact of trade on climate change is becoming increasingly critical, with emissions from production and exports in the region rising by 150% and 250%, respectively, from 1995 to 2018. This underscores a substantial opportunity for targeted decarbonization efforts in trade.
Trade facilitation measures have a significant role in reinforcing both resilience and sustainability in global value chains. Enhanced customs procedures and better cross-border information flow increase transparency, helping in the identification and mitigation of logistical bottlenecks. These measures also support sustainable sourcing and improve the sustainability and resilience of supply chains.
The implementation of trade facilitation measures in Asia and the Pacific increased from 64% in 2021 to 67% in 2023. However, subregional implementation rates vary, for example, Central Asia at 74%, South Asia at 65%, and the Pacific at 42%. Despite the overall upward trend, the implementation of measures for cross-border paperless trade and inclusive trade are still lagging behind, with cross-border paperless trade measures standing at only 42%. Furthermore, low implementation rates are observed in trade facilitation for SMEs (42%), female-owned firms (41%), and trade finance facilitation (29%).
Meanwhile, the role of trade facilitation is evolving, driven by the challenges posed by COVID-19, geopolitical tensions which revealed the vulnerabilities of global linkages and economic fragmentation. The emphasis on digitalization, inclusiveness, and environmental sustainability is redefining the globalization agenda. The impact of trade on climate change is becoming increasingly critical, with emissions from production and exports in the region rising by 150% and 250%, respectively, from 1995 to 2018. This underscores a substantial opportunity for targeted decarbonization efforts in trade.
Trade facilitation measures have a significant role in reinforcing both resilience and sustainability in global value chains. Enhanced customs procedures and better cross-border information flow increase transparency, helping in the identification and mitigation of logistical bottlenecks. These measures also support sustainable sourcing and improve the sustainability and resilience of supply chains.
Digitalization, among other measures, is a key lever in trade facilitation, offering significant improvements in efficiency, particularly traceability, which can help reduce carbon emissions and bolster resilience. Digital strategies and adoption of technology have been promoted by the ADB-supported subregional programs, including CAREC, GMS, and SASEC.
Trade finance is also a critical component for enabling international trade. However, the demand for trade finance has consistently exceeded supply, with the trade finance gap reaching $2.5 trillion in 2022, representing 10% of global merchandise exports. The digitalization of global trade has the potential to narrow this gap, enhance transparency, and support more effective monitoring of environmental and social standards.
The evolving trade landscape, characterized by rapid shifts toward green trade, necessitates a robust knowledge base and enhanced capacity building for stakeholders, including customs and trade officials. DMCs will benefit from sustainable and resilient supply chains, supported by effective information sharing, ICT, and regulatory frameworks that support digital and green trade facilitation. |
