AN EXPLORATION OF THE NEED FOR AND COST OF SELECTED TRADE FACILITATION MEASURES IN ASIA AND THE PACIFIC IN THE CONTEXT OF THE WTO NEGOTIATIONS

Synthesis report

Except for Indonesia, none of the countries studied are contracting parties to
international transit agreements such as the TIR convention (China and India are parties
to the ATA Carnet convention for temporary imports of goods into foreign countries).
However, many of them are parties to bilateral transit agreements, each with their specific
rules and systems (see table II.5). Many countries seem to be concerned that facilitating
transit will result in some transit goods being sold illegally in the transit country. For
example, Bangladesh is concerned that facilitating the transit of Indian goods through its
ports will result in a flood of Indian products into the country. At the same time, Bangladesh
has taken steps to facilitate transit of goods from Nepal and Buthan, two landlocked
countries of the South Asian subregion. These steps have included negotiations of transit
agreements and improvement in the transport infrastructure between the three countries.

The Nepal study finds that, while a transit agreement is in place between India and
Nepal, clearance of goods at Indian ports remain very lengthy and port operators do
discriminate when charging service fees on Nepalese or Indian shipments. Other issues
mentioned include the lack of harmonization (alignment) of Indian and Nepalese trade/
transit documents and the fact that shipments in transit are subjected to regulations
established by both the central Government of India and local state governments. Nepal
itself has no legal provisions for transit goods given the absence of declared transit traffic
at this time.

While the India study confirms that no duty or taxes are charged by India on transit
goods, it recognizes that some local governments might impose unofficial fees. The
importance of correct application and interpretation of regulations and conventions is
highlighted by the fact that, in India, since no fees or charges are supposed to be imposed
on transit goods, shipments in transit are not allowed to be cleared during holidays and
weekends, when overtime charges apply. Other issues identified in the India study are the
lack of simplified transit procedures for authorized consigners and the lack of risk assessment
mechanisms for transit goods, both of which are not covered in bilateral transit agreements
currently governing transit among South Asian countries. Poor or lack of infrastructure to
facilitate transit is mentioned in all the studies.

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