China must facilitate trade

Nation still needs to improve market access, ministry official says

China is actively open to advancing trade facilitation because not only is it in accordance with the country's reforms to its economic system but also helps it enhance its participation in global trade, a commerce official said on Friday.

"In terms of promoting trade facilitation, China holds an actively open stance," Chai Xiaolin, director-general of the Department of World Trade Organization Affairs at the Ministry of Commerce, told a forum on trade facilitation held by the ministry and the Organization for Economic Cooperation and Development.

"Trade facilitation is in line with China's future reforms in economic systems. In addition, China also needs an open and inclusive world trade mechanism for further expanding trade and participating in global governance," she added.

China's is the world's largest exporter and second-largest importer, but exports from the world's second-largest economy have been falling in recent years amid sluggish world demand and rising costs at home. In June, Chinese exports declined 3.1 percent from a year earlier after a 1 percent rise in the previous month.

"China will gain great benefit in expanding foreign trade and reducing trade costs if it can make progress in information availability, get more involved in the trade community, advance rulings, participate in the formalities of documents and encourage automation. It will receive more gains by simplifying the formalities of procedures and strengthening the internal cooperation of the border agency," Evdokia Moise, senior trade policy analyst at the Trade and Agriculture Directorate at the OECD, said during the forum.

The recent OECD Trade Facilitation Indicators, which covered 107 countries outside the OECD area, showed that China is doing well in fees and charges and governance and impartiality but fell behind the OECD average in simplifying document and automation formalities as well as in the internal cooperation of its border agency.

Reducing global trade costs by 1 percent would increase worldwide income by more than $40 billion, most of which would accrue to developing countries, according to Moise.

Chai added that members of the World Trade Organization are expected to reach an agreement on trade facilitation during the Ninth Ministerial Conference held in Bali, Indonesia, from Dec 3 to 6, 2013, an important part of the "early harvest" of the decade-long Doha Development Round of multilateral trade negotiations.

The comprehensive implementation of all measures currently being negotiated in the WTO's Doha Development Round would reduce total trade costs by 10 percent in advanced economies and by 13 to 15.5 percent in developing countries, according to the OECD.

Alan Bollard, executive director of the APEC Secretariat, and Pascal Lamy, director-general of the WTO, said in a recent article that international trade today is very different from what it was 20, or even 10, years ago.

"More open access to global markets has been proven to promote resilient growth and recovery, but this is dependent on certain pre-conditions. Keeping a lid on protectionism is one. The further reduction and elimination of barriers is another."

Shi Yonghong, vice-president of the China Chamber of Commerce for the Import and Export of Machinery and Electronic Products, said during the forum that some problems clouded China's advancement of trade facilitation.

"Trade frictions trend to increase and are shifting to high-tech sectors. Technical trade barriers greatly increased trade costs while some countries retained strict limits on high-tech exports to China," they said.

The first quarter of this year saw China receive a total of 22 trade remedy investigations from 12 countries including India, Brazil and Mexico, according to the customs agency. China was targeted in 77 trade remedy investigations in 2012 with export losses valued at $27.7 billion, up 369 percent year-on-year, according to the ministry.

"We believe that in the near future global trade facilitation will focus on enhancing efficiency of trade flows, widening IT use and accelerating regional trade facilitation," Shi said.

"China has made big reforms in trade facilitation but still needs to make further efforts on market access, transparency of border management and IT implementation.

"In addition to perfecting policies and improving services, the country should maintain an active stance in cooperating with other members of the OECD, the WTO and the APEC to enhance global trade facilitation."