Developments and challenges in trade facilitation
The Minister of Trade, Industry and Investment, the Honourable Vasant Bharath, recently announced plans to streamline the operations of several agencies with responsibility for trade, with the goal of removing impediments to doing business in Trinidad and Tobago.
This is welcome news, as Trinidad and Tobago continues to lag behind other countries in the world, and even in the Caribbean, in terms of ease of doing business. This country is ranked 68th out of 183 countries in the world, according to the World Bank's Doing Business 2012 Report.
The report states that on average, it takes 19 days to import goods into Trinidad and Tobago, and 14 days to export. Singapore, which is ranked at number one in terms of ease of doing business, takes just five days to process the documents necessary for the movement of goods.
While there have been some positive developments, the obstacles to doing business need to be eliminated to allow the manufacturing sector to fulfill its potential and become a major driver of economic growth.
TTMA is pleased to note the progress that has been made with the phasing in of ASYCUDA World thus far, after several years of lobbying by our Association and others within the business fraternity. It is the first clear sign that movements are being made to modernize the regulatory framework in which business people operate and thus to reduce the indirect 'cost' of doing business – i.e. the negative impact of inordinate delays at our nation's regulatory agencies. Its full implementation will depend critically on the successful passage of the Border Control Legislation, to which TTMA continues to look forward. In addition, the success of this platform depends on integration with the Single Electronic Window (SEW).
The Single Electronic Window
The Ministry of Trade, Industry and Investment is developing the TT Biz Link platform, a manifestation of the SEW, is a significant stride, along with ASYCUDA World, to a paperless trade facilitation environment. Much of the manual processing of documents for imports and exports, applications for licenses and setting up new or expansion of existing businesses are being facilitated by the SEW, which will jolt our business sector to new levels of efficiency.
The NAVIS system
TTMA is aware that both ports have transitioned to the NAVIS SPARCS N4 Terminal Operating System (TOS). One of the world's leading TOS, the expert utilization of this system will greatly improve efficiency and productivity. There have been teething problems in the transition, as expected, but reports suggest that improvements are underway.
It must be noted that some infrastructural issues continue to plague our ports, including equipment breakdowns, the absence of container scanners and congestion at berthing and in the warehouses.
Congestion remains the biggest challenge, especially during peak seasons. Ultimately, this problem has a negative impact on the cost of goods and services to local consumers as well as the cost of exported goods, which become uncompetitive.
Nevertheless, TTMA commends both ports for the upgrade work that has begun and reiterates its commitment to continuing the productive relationship with the Ports.
Food and Drug Approvals
Attaining approvals of imported raw materials in the areas of Food and Drugs in an efficient manner continues to be a challenge. Importers have complained of lengthy periods of little or no approval of drugs, to some extent attributable to inactivity of the Drug Advisory Committee of the Chemistry Food and Drug Division (CFDD).
Perhaps the more pressing issues pertain to the need for reform of the entire CFDD. While there have been periodic deliberations, consultations and reports done on its reform, little tangible action has been taken to suggest that the CFDD is moving in the right direction.
The Division continues to be plagued by severely outdated equipment and Information and Communications Technology Infrastructure, lack of trained personnel for testing of samples, and inconsistency in the application of international standards. All of these problems are to the detriment of importers, and again the final consumer is affected, both in terms of price and the availability of the product when it is demanded.
TTMA remains hopeful that a sustained solution will be found for this considerable problem in the near future.
There have been consistent increases in shipping charges within the recent past, in particular Terminal Handling Charges (THC) and General Rate Increases (GRI) by some of the major shipping lines. For a second time this year, THCs were set to increase on September 1 by US$20 per container.
TTMA concedes that individual shipping lines do not have absolute control over these increases, as they are imposed 'across the board' by an external entity. In addition, the lines are affected by congestion at the port, which is passed on as a charge to consignees.
These increases add to cost of inputs into manufacturing which will affect the cost of finished products, and this will likely be passed on to the consumers.
Trade Facilitation Forum
Ultimately, the business community depends on the support of proper systems and accurate information from all the border agencies mentioned above.
In this regard, the TTMA, in collaboration with the Shipping Association of Trinidad and Tobago, is hosting a trade facilitation forum on the theme: Facilitating Maritime Trade: Identifying Key Issues Affecting Efficient, Cost-effective, and Competitive Trading today at the Hyatt Regency Trinidad.
The challenges and impediments which stakeholders experience in trade facilitation, such as operational, regulatory and human resource constraints, will be discussed at this forum.
Other topics include Port productivity, efficiency and performance; labour productivity; intermodal transport/coastal trading/inter-port transshipment and Customs administration.