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To distinguished officials and participants at the CAREC Senior Official Meeting and Ministerial Conference !

The Implementation Action Plan of the refined CAREC Transport and Trade Facilitation Strategy (“Action Plan”) plays a vital role in CAREC’s economic and social development. With the global economy integration and the development of e-commerce, modern logistics featuring IT applications and supply chain management has become a pillar industry in the modern service sector. However, a number of immediate challenges need to be addressed to develop the CAREC transport corridors, connect them to seaports, and promote economic development along the corridors. Some of the challenges that need to be addressed urgently include strengthening regional cooperation, expanding public and private cooperation, integrating regional trade and logistic resources, eliminating barriers against cross-border trade and logistics, innovating cross-border logistic service models, and improving cross-border logistic efficiency.

As a representation of the private sector, CAREC Federation of Carrier and Forwarder Associations (CFCFA) will do its best to serve as an industry intermediary and the bridge between the private and public sector, and actively participate in the studies and solutions of the above issues. Private sector is the main player in the market. Private entities are both the beneficiaries and the implementers of the policies. The private sector also promotes and maintains the market prosperity. Considering the indispensible roles the private sector plays, specific measures and policies to promote and facilitate private sector’s participation should be included in the Action Plan, to make the Action Plan more comprehensive and practical.

For a long period of time, the private sector was unable to participate in the discussions on trade facilitation, but only to accept passively and implement rules and standards developed by various authorities. These uncoordinated rules and standards greatly increased the operating costs of the private sector. In order to gain an upper hand in the competition and reduce costs, some companies started to look for alternatives, trying to game the system and even resorting to bribery. These are against the market rules of course. What the private sector would like very much to see are the solving of a number of issues that directly impact on their livelihood, including the standardization of market access requirements, streamlined and harmonized procedures, convenient visa application, fewer restrictions on backhauls, and reducing unnecessary trans-loadings. The private sector would also like to see bilateral or multilateral agreements or treaties that fail to facilitate trade and logistic development be re-assessed, revised, or amended. Financial support needs to be provided to innovative business models such as logistic financing and warehouse pledge, transport vehicle/equipment financial leasing, railway consolidation, etc., and new technologies such as electronic labels, SMARTBOX, etc. Technical barriers against future business models and transport modes development shall be removed. Restrains on traditional transportation modes shall be eliminated. The regional logistic layout needs to be optimized. Intensive management shall be promoted. Private sector shall be able to share information with public sector via public information platforms on e-commerce and paperless trade.

At the CAREC Senior Official Meeting (SOM) and Ministerial Conference (MC), on behalf of CFCFA, I would like to call on representatives of all countries and CAREC development partners to strengthen further the implementation arrangement including the timetable, facilitate private sector participation, improve the “soft” environment, and further open the technical assistance projects, in order to encourage the private sector to take part in technical research and play its due role in the Action Plan. The improvement of soft environment shall be equally important as the infrastructure development. Soft environment should not be the short plank in the Action Plan. Hence, I would like to make the following suggestions:

1、 To expand private sector’s access in trade facilitation policy dialogues so that the private sector’s voices can be better heard. A practical coordination mechanism needs to be established with the participation of technical bodies and private sector. A specific coordinating agency shall be assigned to receive and respond directly to private sector’s demand so that problems can be heard, acknowledged, and solved in a timely fashion. Currently, there lacks a coordinating body or governing body to foster regional multi-level and multi-agency cooperation.

2、 CFCFA’s role in regional or national trade facilitation policy dialogues and decision makings shall be further clarified, so that CFCFA can better support the implementation of trade and logistic facilitation policies. For example, private sector representatives, such as CFCFA, shall be able to participate in Customs Cooperation Committee (CCC), Transport Sector Coordination Committee, SOM and MC, and take part in relevant projects in the Action Plan.

3、 ADB should make full play of its financial advantages to support the establishment of CAREC Logistic Development Fund initiated by CFCFA, and to attract other international financing through the Fund, to provide financial support to the private sector on guarantees, prepaid expenses (freight, tax, guarantees, etc.), transportation vehicles/equipment leasing and to support the application of new technologies such as electronic labels/SMARTBOX, to invest in logistic financing and warehouse pledge, to support intensive management in private sector, to upgrade the industry and to accelerate the transformation of transport corridors into economic corridors.

4、 The implementation of bilateral or multilateral trade and transport agreements or treaties shall be re-assessed, to gain timely perspectives on problems happened during the implementations, such as transport permits, visa, backhauls restrictions, unnecessary trans-loadings, the unbalanced transport capacity as a result of unbalanced trade, and focusing too much on the approvals but neglecting the management.

5、 The public and private sectors should jointly develop cooperative projects and safety plans. The cooperation between the customs and the private sector can improve border security and international supply chain. Facilitation measures such as “green cards” for customs clearance, “prioritized inspections”, and “trust release” shall be promoted. Customs clearance procedures need to be mainstreamed to reduce the customs clearance costs and increase competitiveness of CAREC products.

6、 The transparency of regulatory policies needs to be improved, and the effort on anti-corruption needs to be strengthened. Fees need to be reduced, and the operation costs of government regulatory bodies shall not be overly apportioned to private sector.

7、 More emphasis needs to be put on the development of cross-border e-commerce information platform, to optimize resources allocations, support win-wins among companies, and support the private sector to work on issues that hold back their development and issues such as online payment, foreign exchange settlement, tax rebate, etc.

8、 It is worthwhile to pay more attention to the development of cross-border air transport and courier services, which shall be included into the Action Plan. A coordinating mechanism needs to be established to solve the current inefficient connection among different transport modes and distribution centers. It is necessary to support the private sector to conduct comparative analysis on laws applicable to international multi-modal transportation and international railway successive transportation, which will provide necessary technical support to promote intra-region international multi-modals, to connect sea transport with traditional transport modes, and to promote economic development. Research might cover the review and amendment of trade terms, utilization of international multi-modal documentations, delivery of goods, the right on the control of goods and its transfer, the revision or withhold of transport documentations, proof of goods damages, liability insurances, standard delivery terms, coordinated operations, etc.

9、 It is important to support the private sector to participate in the development of regional standards and the relevant technical studies, to further eliminate trade barriers. More support shall be given to the private sector to research on the impact of difference national technical standards and measures to minimize the negative impact. More support shall be given to the private sector to research on standards that CAREC urgently needs.

10、 Certain interface shall be provided to the private sector on the national single window and public information platform, and messaging specifications need to be provided. More support should be given to the private sector to participate in the establishment of information platform, to promote the development of e-commerce and paperless trade.

11、 More support shall be given to CFCFA to develop standards on transport documentations and electronic messaging specifications. CAREC and CCC labels shall be printed on the documentations, which will serve as harmonized transport documentations.

12、 More support shall be given to CFCFA to expand the Corridor Performance Measurement and Monitoring, and research on policies and measures that address long lasting congestion problems at vital transport nodes (such as Alashankou/Dostyk).

13、 More support shall be given to the private sector to research on the regional cooperate credit rating/record platform, liability insurance, and using insurance to replace guarantees. More support shall be given to CFCFA to support its cooperation with the public sector and other relevant agencies to develop a credit rating system on CAREC companies.

14、 More support needs to be provided to CFCFA’s capacity building, so that regular trainings and online trainings can be conducted, best practices can be shared, and the public and the private sector can interact and exchange their trainings on policies, standards and procedures.

15、 CFCFA needs more support to cooperate with other multilateral organizations, such as the Shanghai Cooperative Organization, United Nations Economic and Social Commission for Asia and Pacific, and to integrate the public sector’s resources from multiple channels and various regional cooperation mechanisms.

I would like to thank the CAREC, all the governments, ADB and all sectors for their long-term support and assistance to CFCFA!

I wish you a very productive and successful conference!

CFCFA Chairman

Oct. 13, 2013