Tài liệu Trade facilitation of thailand and lessons for vietnam

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS TRADE FACILITATION OF THAILAND AND LESSONS FOR VIETNAM Specialization: International Trade Policy and Law TRINH THI HUYEN Hanoi – 2019 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS TRADE FACILITATION OF THAILAND AND LESSONS FOR VIETNAM Major: International Economics Specialization: International Trade Policy and Law Code: 8310106 Full Name: Trinh Thi Huyen Supervisor: Doctor. Phan Thi Thu Hien Hanoi – 2019 i DECLARATION I hereby commit that this thesis is my own study and there is no information used with the unauthorized data source. The research contents in this topic are completely honest and have not been used or published in any form. The information and data of other authors and other organizations referenced in the thesis are fully cited and annotated. Due to limited time period and knowledge, this thesis faces with flaws and inevitably contains errors. In addition, when the author carried out the research about the trade facilitation implementation of Thailand, it still exists the shortage in figuring out the details because of a big language barrier (a huge amount of information is in Thailandese). Therefore, I look forward to receiving the contributing ideas to finish this study. I would like to express my sincere and grateful thanks to Doctor. Phan Thi Thu Hien, who enthusiastically guided me under the process of completing this study. Student: Trinh Thi Huyen ii TABLE OF CONTENT DECLARATION ................................................................................................... I LIST OF FIGURES............................................................................................. IV LIST OF TABLES............................................................................................... VI ABBREVITION LIST....................................................................................... VII ABSTRACT ......................................................................................................... IX INTRODUCTION ................................................................................................. 1 CHAPTER 1: OVERVIEW OF TRADE FACILITATION ............................... 6 1.1. Trade facilitation definition ........................................................................ 6 1.1.1. Definition ............................................................................................. 6 1.1.2. Impact of trade facilitation ................................................................... 9 1.2. Trade facilitation main indicators ............................................................ 12 1.3. WTO’s Trade Facilitation Agreement (TFA) .......................................... 18 1.3.1. Overview of TFA establishment .......................................................... 18 1.3.2. Main contents of TFA ......................................................................... 18 1.3.3. Current implementation of TFA .......................................................... 19 CHAPTER 2: THE CURRENT IMPLEMENTATION STATUS OF TRADE FACILITATION OF THAILAND ..................................................................... 21 2.1. Overview of Thailand ............................................................................... 21 2.1.1. Thailand geographical location .......................................................... 21 2.1.2. Thailand economy .............................................................................. 21 2.1.3. Transportation and logistics structure in Thailand ............................. 27 2.2. Current implementation of TFA of Thailand .......................................... 30 2.2.1. TFA Commitment ............................................................................... 30 2.2.2. TFA Implementation of Thailand ........................................................ 32 2.3. Achievements of TF in Thailand .............................................................. 44 2.3.1. Trade Facilitation Main Indicators .................................................... 44 iii 2.3.2. Implementation of TFA Indicators by OECD ...................................... 48 2.3.3. Overall assessment of TF in Thailand and lessons learned ................. 54 CHAPTER 3: THE CURRENT IMPLEMENTATION STATUS OF TRADE FACILITATION OF VIETNAM ....................................................................... 58 3.1. Overview of Vietnam ................................................................................ 58 3.1.1. Vietnam geographical location ........................................................... 58 3.1.2. Vietnam economy ............................................................................... 58 3.1.3. Transportation and logistics structure in Vietnam .............................. 62 3.2. Current implementation of TFA of Vietnam ........................................... 66 3.2.1. TFA commitment of Vietnam .............................................................. 66 3.2.2. TFA Implementation of Vietnam ......................................................... 67 3.3. Achievements of TF of Vietnam ............................................................... 73 3.3.1. Trade Facilitation Main Indicators .................................................... 73 3.3.2. Implementation of TFA Indicators by OECD. ..................................... 78 3.3.3. Overall assessment of TF in Vietnam .................................................. 81 CHAPTER 4: STRENGTHENING TRADE FACILITATION OF VIETNAM FROM THAILAND’S EXPERIENCES ............................................................ 83 4.1. Vietnam’s view for improvement trade facilitation of vietnam .............. 83 4.1.1. Opportunites of Vietnam ..................................................................... 83 4.1.2. Challenges for Vietnam ...................................................................... 85 4.2. Solutions for strengthening trade facilitation of Vietnam from lessons/experiences of Thailand. ..................................................................... 87 CONCLUSION .................................................................................................... 91 REFERENCES .................................................................................................... 93 iv LIST OF FIGURES Figure 1.1. Buy-Ship-Pay Model ............................................................................. 8 Figure 1.2. Principle of trade facilitation ................................................................. 8 Figure 1.3. What is measured in Doing Business? ................................................. 13 Figure 1.4. The Global Competitiveness Index 4.0 2018........................................ 15 Figure 1.5. The implementation commitment of WTO Members ........................... 20 Figure 2.1. GDP of Thailand (2009-2018) ............................................................. 22 Figure 2.2. GDP/ capita of Thailand & East Asia & Pacific (2009-2017) .............. 22 Figure 2.3. Share of economic sectors in GDP from 2007-2017 ........................... 23 Figure 2.4. Balance of Trade of Thailand from 2009 – 2019 .................................. 25 Figure 2.5. Thailand’s Exports from 2009 – 2019 .................................................. 25 Figure 2.6. Thailand’s Imports from 2009 – 2019 .................................................. 26 Figure 2.7. Thailand’s Foreign Direct Investment (2013 – 2018) ........................... 27 Figure 2.8. Notification Status of Thailand ............................................................ 32 Figure 2.9. Thailand National Logistics strategy.................................................... 34 Figure 2.10. Conceptual Model of Thailand National Single Window ................... 36 Figure 2.11. Thailand National Single Window operation ..................................... 40 Figure 2.12. AEO Organization of Thailand ......................................................... 42 Figure 2.13. Thailand AEO Members .................................................................... 44 Figure 2.14. Thailand Ease of Doing Business (2009-2018) .................................. 45 Figure 2.15. Logistics Performance Index of Thailand.......................................... 46 Figure 2.16. Thailand’s Competitiveness index 2009 – 2018 ................................ 47 Figure 2.17. Thailand’s Enabling Trade Index 2016 ............................................. 47 Figure 2.18. Thailand’s LSCI (2010-2018) ........................................................... 48 Figure 2.19. Trade Facilitation and Paperless Trade Implementation of Thailand in 2017 ...................................................................................................................... 49 Figure 2.20. “Transparency” measures implementation ........................................ 50 Figure 2.21. “Formalities” facilitation measures implementation ........................... 51 Figure 2.22. “Institutional arrangement and cooperation” measures implementation .............................................................................................................................. 52 v Figure 2.23. “Paperless trade” measures implementation ...................................... 53 Figure 2.24. “Cross-border paperless trade” measures implementation .................. 54 Figure 3.1. GDP of Thailand, Vietnam, Malaysia (2013-2018) .............................. 59 Figure 3.2. GDP/capita of Thailand, Vietnam, Malaysia (2013-2017) ................... 59 Figure 3.3. Share of economic sectors in GDP Thailand-Vietnam, 2013-2017 ...... 59 Figure 3.4. Vietnam’s Exports from 2009 – 2019 .................................................. 61 Figure 3.5. Vietnam’s Imports from 2009 – 2018 .................................................. 61 Figure 3.6. Vietnam’s FDI (2009 – 2019) .............................................................. 62 Figure 3.7. Notification Status of Vietnam ............................................................ 67 Figure 3.8. Number of AEO in Vietnam (2014-2018) ........................................... 73 Figure 3.9. Ease of Doing Business in Vietnam- Thailand (2009-2018) ................ 74 Figure 3.10. Logistics performance index of Thailand, Vietnam and Malaysia ..... 75 Figure 3.11. Vietnam’s GCI 2009 – 2018 ............................................................. 76 Figure 3.12. Vietnam’s Enabling Trade Index 2016.............................................. 77 Figure 3.13. Vietnam’s Performance of TFI(s) of 2017 by OECD ........................ 81 vi LIST OF TABLES Table 1.1. Benefits for governments and business communities ............................ 11 Table 1.2. OECD’s Trade Facilitation Indicators ................................................... 17 Table 2.1. Development of Thailand’s international trade in January 2019 ............ 24 Table 2.2. Score for Infrastructure ......................................................................... 28 Table 2.3. Notified items of Thailand ................................................................... 30 Table 2.4. Thailand NSW Participating Agencies. ................................................. 38 Table 2.5. Major Documents Exchanged via THAI-NSW ..................................... 40 Table 3.1. Development of Vietnam’s international trade in Jan. 2019 .................. 60 Table 3.2. Score for Infrastructure ......................................................................... 63 Table 3.3. Maritime and Ports infrastructure in Vietnam-Thailand ........................ 65 Table 3.4. LSCI of Vietnam, Thailand and Malaysia ............................................. 78 vii ABBREVITION LIST ADB Asian Development Bank AEO Authorized Economic Operator APEC Asia-Pacific Economic Cooperation ASEAN Association of Southeast Asian Nations ATIGA ASEAN Trade in Goods Agreement B2B Business to Business partnerships DG TAXUD Directorate General of Customs and Taxation EC European Commission EDI Electric Data Interface EU European Union FoS Factor of Safety FTA Free Trade Agreement GATT General Agreement on Tariffs and Trade GDC General Department of Vietnam Customs GDP Gross Domestic Product G2B Government to Business partnerships G2G Government to Government partnerships ICC International Chamber of Commerce ITC International Trade Centre ITO International Trade Organization OECD Organisation for Economic Co-operation and Development NESDB National Economic and Social Development Board NLC National Logistic Committee NSW National Single Window NTFC National Trade Facilitation Committee PDSC Policy Support Dialogue Component RFID Radio Frequency Identification RTC Royal Thai Customs viii TEC-II Thailand-EU Cooperation Facility Phrase II TF Trade facilitation TFA Trade Facilitation Agreement THAI-NSW Thailand National Single Windows UN The United Nations UNCTAD United Nations Conference on Trade and Development UNECE United Nations Economic Commission for Europe UNESCAP UN Economic and Social Commission for Asia and the Pacific UNESCO United Nations Educational, Organisation WB World Bank WCO World Customs Organization WTO World Trade Organization Scientific and Cultural ix ABSTRACT Trade facilitation with many benefits for countries in enhancing the effectiveness of international trade, including but not limited to cost cutting, risk and uncertainity reduction, market expansion, has been increasingly received more and more interest from many countries in all over the world, especially in developing countries and least developed countries. Southeast Asia is a typical region of the developing countries for active implementation of trade facilitation, two of them are Vietnam and Thailand. This paper presents the current status of the results of the implementation of Trade Faciliation Agreement of Thailand and Vietnam, the results of these two countries in trade facilitation through trade facilitation indicators given by other international organizations such as World Customs Organization, World Bank… In addition, at the same time, the paper presents the difficulties and challenges that the two countries encounter during the implementation process of the trade facilitation, as well as the experiences that Thailand has drawn during the implementation of the trade facilitation, thereby giving lessons to Vietnam. From these studies, the Thesis would like to provide solutions for Vietnam to further promote and improve the process of trade facilitation from time to time based on experiences of neighbouring coutry as Thailand. 1 INTRODUCTION 1. The research rationale Nowadays, the increase of trade in both value and volume sets out with the question for countries that is to create a favorable business environment to promote the movement of goods across national borders for the purpose of optimizing transaction costs and time. In a globalized world characterized by globalization and integrated supply chains, the need for global regulations and rules to facilitate trade are more and more pressing. As a consequese, many international organizations such as WTO, WCO, UNCTAD, OECD, APEC, focused on the trend of trade facilitation. Derived from that, trade facilitation has become the target and tool to improve national competitiveness of many countries in the world such as Thailand and Vietnam. Trade Facilitation Agreement (TFA), the first multilateral trade agreement of WTO with its fundamental role for reforming of trade all over the world, is the source of international law for countries to build and enforce national trade facilitation. The TFA regulates the expedition of the movement, release, clearance of goods and sets out measures for effective cooperation between customs and other governmental authorities on trade facilitation and customs compliance issues. As of 22 February 2017, the TFA came into force following its ratification by two-thirds of the WTO membership. Thailand and Vietnam are two countries of the south-east asia (ASEAN) who actively participated and ratified the TFA. With a high level of human development and the second largest economy in ASEAN and the 20th largest in the world by purchasing power parity, Thailand is classified as an emerging industrial economy in which production, agriculture and tourism are key sectors of the economy and it is an export-dependent market economy with exports. Thailand became the 20th WTO Member to formally accept the WTO’s Trade Facilitation Agreement (TFA) when it submitted its instrument of acceptance on 5 October 2015. About two months later, Vietnam also did ratify the TFA in 15 December 2015 with its orientation to quickly adapt and figure out how to keep up with other members. Vietnam and Thailand are the two countries in Southeast Asia, located in the 2 center of the world's most vibrant economy, having a favorable geographical position and natural conditions to develop all types of freight transport. They have similar characteristics in terms of tropical climate and traditional agriculture. Also, the both countries have the borders on the sea, with seaports and favorable natural conditions for tourism development and import export activities. Despite of above-mentioned similar characteristics, the economic starting point of the two countries is quite different. In the 1970s, Thai implemented the "export-oriented" policy, of which ASEAN, America, Japan and EC were the main export markets. Industry and services and tourism have gradually played an important role in the economy and the role of agriculture has been declining. Thailand is now a new industrialized country (formerly a traditional agricultural country). Meanwhile, Vietnam is also a traditional agricultural country. Thanks to economic and political reforms under ”Đổi Mới” in 1986, Vietnam have achieved rapid economic growth and transformed Vietnam from one of the world’s poorest to a lower middle-income country. According to the World Bank's Doing Business 2019 report, Thailand ranks 27th among 190 economies in the Ease of Doing Business (EODB) ranking (taking the third place after Singapore and Malaysia within ASEAN area), and ranks 32th in the logistic performance index (LPI) ranking in 2018. These results demonstrate that Thailand has achieved certain accomplishments in trade facilitation. As the two typical economies of the Mekong region, Vietnam and Thailand are on the momentum of economic development and effort to apply trade facilitation measures to strengthen economic cooperation with countries in the region and the world. The achievements and experiences that Thailand gained from trade facilitation are absolutely some of the best ways for Vietnam to learn and apply for itself. Therefore, the topic "Trade facilitation of Thailand and lessons for Vietnam" is chosen to be the topic of this master thesis. 2. Literature review As a category to promote international trade, trade facilitation quite received much attention and research from many organizations and researchers, including the research on trade facilitation in general, on trade facilitation in Asia inluding the 3 ASEAN countries. Regarding studies of trade facilitation in general, it would be impossibe not to mention on the work “Indicators for Trade Facilitation”. This digital Handbook was developed as a follow-up to the Workshop on Trade Facilitation Performance and Monitoring, co-organized by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), the Organization for Economic Cooperation and Development (OECD) and the Asian Development Bank (ADB), in collaboration with World Bank (WB), International Trade Centre (ITC), World Customs Organization (WCO), United Nations Conference on Trade and Development (UNCTAD), with the support of the United Nations Network of Experts for Paperless Trade and Transport in Asia and the Pacific (UNNExT), the China International Electronic Commerce Center (CIECC) and the New Zealand Ministry of Foreign Affairs and Trade. For the “Trade facilitation: ITC publications”: The International Trade Centre (ITC) has many publications to help businesses and policymakers make the most of important agreements to break down trade barriers. Among them are insights on the Africa Continental Free Trade Area, the WTO TFA and the WTO Information Technology Agreement. For the studies of trade facilitation in the Asia, the publication on trade facilitation: “designing and implementing trade facilitation in asia and the pacific 2013 update” is the outcome of a collaborative effort between the Asian Development Bank (ADB) and UNESCAP. It provides the operational guidance on how to assess the status of trade facilitation, what measures are necessary, how to design trade facilitation objectives and how to implement it at national and regional levels, which shall help to bridge the gaps among policy makers, practitioners, and economists. The book also provides lots of experiences of countries within region, consisting of Thailand and Vietnam - for training on regional trade policy and help to shape trade facilitation measures in Asia and the Pacific. Next relevant publication is “Trade Facilitation and Paperless Trade Implementation in ASEAN” (ST/ESCAP/2805) – results of the UN Global Survey 2017 on Trade Facilitation and Paperless Trade Implementation for ASEAN countries. The Survey provides information on the implementation of selected 4 measures under the WTO TFA, as well as on the implementation of innovative, technology-driven measures aimed at enabling trade using electronic rather than paper based data and documentation - otherwise referred to as “paperless trade”. The report also includes the analysis of the impact on the trade cost of increasing the implementation rates in ASEAN coutries. In Vietnam, there are also some studies on the trade facilitation such as: Article “Facilitating trade and harmonizing Logistics policy in ASEAN countries” published in External Economic Review No. 63/2014, Foreign Trade University of three authors Nguyen Thu Thuy, Hoang Truong Giang and Nguyen Trung Kien. This paper outlined general trade facilitation, explores trade facilitation in ASEAN members, provides the analysis on logistics policy comparisons among ASEAN members, then proposes some solutions to harmonize logistics policies of ASEAN countries including Vietnam. Thus, the paper only focuses on facilitating trade in general in terms of harmonizing logistics policies of ASEAN countries, including Vietnam. Article “WTO Trade Facilitation Agreement: Opportunities and Challenges for Vietnam” published in External Economic Review No. 71, Foreign Trade University of two authors Trinh Thi Thu Huong and Phan Thi Thu Hien. The Article goes through the overview of the TFA, goes deeper into studying the opportunities and challenges posed to Vietnam, thereby proposing solutions to Vietnam on ratification and enforcement of TFA. The Article has a broad scope, a joint study for relevant subjects in the Vietnamese territory in the implementation of the Agreement. However, the time for writing the article is February 2015 so the information has not been updated, especially after the TFA officially took effect on February 22, 2017. However, there is very few research analysing trade facilitation of Vietnam in comparison with Thailand. This comparison is very important because the neighbouring country has had great success in facilitating trade so far. There are absolutely some precious lessons that are suitable for Vietnam situation. Therefore, it is suggested that there should exist a depth and comprehensive research on the current status of Vietnam's trade facilitation and Thailand’s experiences in this issue. 3. The research purpose 5 The general objective of the paper is to provide recommendations on enhancing the Vietnam’s trade facilitation implementation from the lessons of Thailand. To achieve this overall aim, there are specific tasks that the thesis needs to solve:  Summarizing the basic theories of trade facilitation, the impact of trade facilitation in improving trade efficiency worldwide, encouraging economic growth.  Studying the current status of Thailand’s trade facilitation implementation, then identifying the core experiences behind the country’s practices.  Analyzing the overall situation of trade facilitation in Vietnam, its challenges and difficulties, analyzing the trade facilitation gaps between Vietnam and Thailand.  Providing the great experiences from Thailand and avoid the negative situations that the country may suffer, then propose recommendations for Vietnam. 4. The research scope - Research time: The thesis will focus the research on trade facilitation of Thailand and Vietnam in the recent 10 years, from 2009 to 2019. - Reseach scope: The thesis shall be studied in two aspects: (i) The legal frame that Thailand and Vietnam established to promote the trade facilitation and TFA commitment of Thailand and Vietnam up to now; and (ii) measures and standards of trade facilitation indicators for practical analysis in both countries. 5. The research methodology and data source: In the dissertation, this paper is made with the qualitative research methodology and secondary information to reach the research objective. The author has used the method of collecting materials, documents and analyzing the data, statistics and information at the table, combining the methods of comparing, referring and synthesizing to perform the above tasks. 6. The structure of the paper: Beside Introduction, Conclusion, Reference, the paper consists of four chapters: Chapter 1: Overview of trade facilitation Chapter 2: The current implementation status of trade facilitation of Thailand Chapter 3: The current implementation status of trade facilitation of Vietnam Chapter 4: Strengthening trade facilitation of Vietnam from Thailand’s experiences 6 CHAPTER 1: OVERVIEW OF TRADE FACILITATION 1.1. Trade facilitation definition 1.1.1. Definition Trade facilitation is a very popular issue in international trade. This issue is frequently mentioned in cross-country conferences among the countries and international organizations. Many international organizations in all over the world express their particular interests in trade facilitation such as the WTO, ITO, WCO, UNECE, World Bank. Understanding the term “trade facilitation” varies in the literature and amongst practitioners. Trade facilitation is mainly and widely used by institutions which seek to improve the regulatory interface between government bodies and traders at national borders. In order to answer the question “what is trade facilitation?”, there are a few international organizations who expressed their ideas as follows: With regard to WTO, it defined that trade facilitation refers to “the simplification and harmonization of international trade procedures, where trade procedures are the activities, practices, and formalities involved in collecting, presenting, communicating, and processing data and other information required for the movement of goods in international trade”. Meanwhile, regarding the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), trade facilitation means “the simplification, standardization and harmonization of procedures and associated information flows required to move goods from seller to buyer and to make payment”. Such definition implies that both the physical movement of goods and the associated information flows are important in a supply chain. It also comprises of the governmental agencies that intervene in the goods transit, and the various commercial entities that conduct business and move the goods. Similar to WTO, APEC also mentioned that trade facilitation refers to “the the simplication and rationalization of customs and other administrative procedures that hinder, delay or increase the cost of mong goods across international borders”. So, why does trade facilitation matter? There are great potential gains from trade facilitation for both governments and the business community. Governmental authorities shall profit in terms of enhanced trade tax collection, better use of resources 7 and increased trader compliance. A more efficient and transparent public services will allow the administration to maintain high security levels and effective government control. Meanwhile, traders will gain higher predictability and speed of operations and lower transaction costs, resulting in more competitive exports on global markets. For countries, reducing unnecessary delays and costs attracts investments, and supports growth and job creation. Trade facilitation measures can particularly benefit developing countries, where it frequently takes three times as many days to export goods as it does in developed ones. Exports from developing countries require nearly twice as many documents and six times as many signatures (World Bank: Doing Business 2012). To utilize the benefits that trade facilitation can bring for trade, according to OECD, trade facilitation refers to “policies and measures aimed at easing trade costs by improving efficiency at each stage of the international trade chain”. The WCO had another approach when indicating about the goals to avoid of unnecessary trade restrictiveness: Trade facilitation “can be achieved by applying modern techniques and technologies, while improving the quality of controls in an internationally harmonized manner”. Meanwhile, the definition of OECD and UN/CEFACT give the broader approach to trade facilitation by mentioning about the behind-the-border measures such as conformity assessment measures, business facilitation and logistics services at the international trade level. The model Buy-Ship-Pay (Figure 1) lays down the three main processes of internation trade transactions, consisting of (1) Buy: referring to contract establishment, order making, (2) Ship (the most complicated): referring to five main activities: preparing for export, export, transportation, preparing for import, import; and (3) Pay: referring the payment made by buyer to the seller. This model suggests the application of total traspaction approach in regulatory procedures, government control and improve business processes. 8 Figure 1.1. Buy-Ship-Pay Model Prepare for export Commercial procedures  Establish contract  Order goods  Delivery goods  Request payment  Warehousing Pay Ship Buy Export Transport Transportation procedures  Estrablish transportation contract  Collect, delivery gooods  Provide shipping documents… Prepare for import Import Regulatory procedures  Obtain import/export license  Provide customs declaration  Provide cargo declaration  Clear goods  Payment request Financial procedures  Provide credit rating  Provide finance  Provide insurance  Execute payment  Issue statements Source: https://www.unescap.org, 2019 Trade facilitation regulates the fundamental principles, consisiting of transparency, simplification, harmonization, and standardization. Figure 1.2. Principle of trade facilitation Transparency Simplification Principles (Pillars) Harmonization Standardization Transparency is understood within government promotes openness and accountability. Disclosure of information should be done in the way that trade can 9 access and use it. Policy decision, regulations and decisions should be disseminated and discussed with trade prior to the enforcement to facilitate the shaping on amended or new laws. Simplification is with the intention of eliminating all unnecessary duplications in trade procedures and processes and enabling automation of cargo processes. Harmonization is as the alignment of national procedures, operations and documents with international conventions, standards and practices. It may come from adopting and implementing the same standards as partner countries, either as part of a regional integration process or as a result of business decisions. Standardization of international process and practices, documents and information agreed by various recognized international bodies. Standards are intended to be used for adoption leading to harmonized practices and methods. To achieve these principles, it is essential to get full cooperation between government authorities and with the business community. 1.1.2. Impact of trade facilitation International trade has grown rapidly in recent years, thanks partly to the progressive reduction of tariffs barriers and quotas through successive rounds of multilateral trade liberalization among the countries in all over the world. However, this progress brings to light one of the remaining weak links of international trade, which prevents countries from drawing full benefits from the advantages of open global markets: border bottlenecks generated by inefficient, outdated and complex trade procedures and formalities. The impact of trade facilitation in economic view is the link between trade facilitation and trade flows, government revenue and foreign direct investment. It was found that the improved and simplified customs procedures would have a significant positive impact on trade flows. It further shows that a large number of mostly developing countries have managed to boost government revenue by implementing customs modernisation programmes that result in more efficient collection of trade taxes. Trade facilitation aims to reduce trade costs, which includes all costs except from the cost of production incurred in getting a good from the producer to the final consumer. Supply chain models recognize that the components embodied in final goods are made in many different countries. As a result of this