ADB and AusAID Strengthen GMS Transport and Trade Facilitation

MANILA, PHILIPPINES (8 December 2010) - A $5.7 million technical assistance grant from ADB will help to improve transport and trade facilitation between countries in the Greater Mekong Subregion (GMS).

The grant is financed by the Government of Australia, through the Australian Agency for International Development (AusAID), and will be administered by ADB.

The assistance will enable cheaper and faster transport across borders by improving border management and transit procedures, and streamlining the exchange of traffic rights between GMS countries.

Despite significant investments in infrastructure, including the upgrade and construction of new roads and rail, and a rapid increase in trade between GMS countries in the past 10 years, nonphysical barriers to trade remain high. Improving transport and trade facilitation will hasten the development of the subregion's key transport routes into vibrant economic corridors, specifically the East-West Economic Corridor, North-South Economic Corridor, and Southern Economic Corridor.

"These transport corridors provide a bedrock for economic corridor development, which is dependent on the development of more efficient forms of transport facilitation," said Pradeep Srivastava, Senior Regional Cooperation Specialist in ADB's Southeast Asia Department.

Mr. Srivastava said that the need for improved trade facilitation is likely to increase in Asia as it moves towards a greater reliance on new markets through increased intra-regional trade and domestic consumption. This includes enhanced market access for products from the smaller economies to alternative markets in the region.

As part of the overall efforts to improve transport facilitation in the GMS, there is a need to strengthen the implementation of the GMS Cross-Border Transport Agreement (CBTA), which aims to streamline regulations and reduce nonphysical barriers to trade in the subregion. Traffic volumes at CBTA border crossings remain low due to numerous problems, such as the slow progress in the exchange of traffic rights, which raises the cost of delivering goods to inland destinations, and a poorly developed customs transit and temporary vehicle admission system. The lack of coordination in procedures for border clearance, and inadequate border infrastructure that would support streamlined border and customs controls, were also seen as impediments to effective CBTA implementation.

Modernization of border procedures remains a challenge with limited interagency coordination and different agencies collecting and checking the same information without exchanging data. Management of cross-border trade needs to comply with international agreements and ASEAN agreements.

There is also a need to simplify border handling procedures and to integrate roles of different stakeholders with responsibilities on the border, such as the customs, sanitary and phytosanitary standards agencies. Enhanced coordination between customs and other border agencies is important, while practical and achievable aspects of cross-border management to speed up trade facilitation in the subregion need to be in place.

"The $5.7 million grant from AusAID will will help the GMS to become more integrated as a production base and market, with improved and coordinated border management, transit procedures, and implementation of traffic rights," Mr. Srivastava said.

The GMS is made up of Cambodia, the People's Republic of China (PRC, specifically Yunnan Province and Guangxi Zhuang Autonomous Region), Lao People's Democratic Republic (Lao PDR), Myanmar, Thailand, and Viet Nam.

Last Updated: 8 December 2010