Wednesday, February 11, 2009

Looking at "facilitation" in another light

Trade facilitation operates on four key principles: simplification, harmonization, standardization and modernization. These principles are applied to existing procedures and systems that govern the ingress and egress of goods from border to border. The faster and the simpler the process, theoretically, the less transaction cost it incurs.

Experts on the matter have argued that Information and Communication Technologies play a large role in trade facilitation as they hold the key to simplification and streamlining of these otherwise cumbersome procedures. There are talks of a paperless system wherein an importer need not have the analog documentation requirements with him at all times. A reliable ICT system also ensures transparency and predictability - qualities that trading partners look for. Some others argue that while ICT does play a large role, it is not indispensable and neither is it the magical cure to red-tape problems.

For the most part, I agree that trade facilitation measures can be supplemented by a good ICT system. The removal of the human element (or at least reduced participation) in the procedures that makes ICT so appealing. Less chances of corruption, continuous processing of requests (read: no lunch break, coffee break, etc.) Fully-automated systems don't need "palm oil" either. Still, I don't think that full automation is the way to go for all trade procedures. In choosing what kind of ICT system to use the needs of the particular state have to be the primordial consideration - not just the fastest and the latest technology out there.

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