Globalization and Trade:

International perspectives on e-trade

Experience from the UNECE region:

using international standards and tools
for international business

Мario APOSTOLOV, Regional Adviser, UNECE

mario.apostolov@unece.org
 In this presentation:
• Globalization and its challenges
• UNECE and e-business standards
• “success story” in Eastern Europe
 Globalization and its challenges

Globalization – the removal of barriers to free trade and the

closer integration of national economies – can be a force for
good that has the potential to enrich everyone in the world,
particularly the poor, but the way it has been managed
(especially the international trade agreements) needs to be
rethought. Joseph Stiglitz

Globalization has been “misgoverned”. John K. Galbraith

 UNECE
• UNECE is setting standards (incl. for e-business)
– e.g. UN/EDIFACT the only global EDI standard
• Disparity of economic development in UNECE’s
region
E-business helps address development priorities:
• Reduce poverty and provide opportunities
• Accelerate economic growth
• Decrease social stratification
• Attract foreign investment
• Build a service economy
• Help regional integration
 e-business and international cooperation
• e-business has definite advantages, but it may not take off, if it is left to
purely market forces.
• Same is true about the use of international standards for e-business.
• A driving force for implementation is needed: States, international
organizations and the business community should work together.
• Example - electronic invoicing: Everyone knows it is useful, but no one
wants to pay to develop a system for all.
• Kareltek (Finish company) developed and sold e-invoices for 6 months in
2005: €1.5m€ investment –> €50m return from saving costs
– Finland (5m population) as a whole –> € 4b savings from e-invoicing
– EU (445m population) –> potentially can save € 36b.
• electronic invoicing for all ICT platforms will ensure
inclusiveness of the benefits of ICT.
• UNECE supports international standards, e.g. for e-
invoicing with the support of public (ICC, IATA,
Governments) and private (Microsoft, SAP) sectors.
 POTENTIAL
Rough idea of e-Invoices IMPACT IN
used in each sector FINLAND
Increasing the competitiveness:
40.000 (80 %) Man-years fromSupport Functions to Client Service and Production
Effortin Saving in€
organisations Invoices Man-years (20€/eDoc)
SMEs 225500
Big companies 500
eB2B total 226'000 220'000'000 48'000 4'400'000'000
eGovernment
Statetreasury 117 4'000'000 933 80'000'000
Customs 1 52'000 12 1'040'000
declarations 1 3'000'000 60'000'000
Cities/comm. 54 7'000'000 1'632 140'000'000
Health care 1'500'000 350 30'000'000
eB2G total 15'552'000 3'000

51'000

Source: Kari Korpela variation +/- 10%

 Integrated Management of International
Trade Information Flows
Advance filing
Harmonized of trade information
(electronic)
Single
trade +
Window Advance exchange
documents,
e.g.UNeDocs of information
across borders
Results:
• more efficient trade: less bureaucracy (the goal of trade facilitation) ->
lower cost
• more security through better supply chain management inside and
among countries –> better risk analysis
• integration with Europe [e.g. EU’s Single Administrative Document
(SAD) based on the UN Layout Key in use in SEE, TRACECA]
 Single Window
(one of the models: single authority)

3-a: 'Single Authority'

Trader Authority 1
(incl. Transport)

Single Authority 2
Electronic
Authority

Authority 3

Paper

Authority 4
Potential first step: gather all documents and required
procedures in one place: the German experience:
Formular Server: www.zoll.de
Need to build electronic platforms
Community networks in ASEAN: Singapore -
TradeNet, Malaysia – DagangNet; Korea –
KTNET, Hong Kong – DTTN, Tunisia
TradeNet, etc.
Single Windows in:
ports: Hamburg, DE (Dakosy), Felixtowe, UK
airports: Schiphol, NL
based on Customs: Sweden, Senegal.
Community network for e-business and a
Single Window: DTTN, Kong Kong, China
Freight
Freight Carriers
Carriers/ /Portals
Sellers
Sellers Buyers
Buyers (Inttra,
Portals
GTNexus)
Forwarders
Forwarders (Inttra, GTNexus)

DTTN Core Messaging Infrastructure

e.g. Tradelink Communications Security Web

Banks
Banks&&

V a l u e A d
Gateway Services Services
Financial
Financial
Institutions
Institutions
Document Support &
Customer
Exchange & Operations
Management

S e r v i c e
Transformation Management

R e g i o n a
Government
Government Inspection
&&Agencies
Agencies
Inspection
Agencies
Agencies
Insurance
Insurance Terminals
Institutions
Institutions
Terminals
 Data harmonization

Business
Process
Analysis
Data Element
Questionnaire

___UN/TDED___
WCO Data Model

User Data Standard

assessment harmonization Data Set
 Implementation
• Implementation carries technology and market risks.
• Paperless trade projects require the integration of:
– cross-sector business requirements and
– different e-business technologies, e.g. UN/EDIFACT,
UNeDocs, business modeling, constantly evolving
technologies.
• Project management requires: user orientation (concrete needs
of the national economy); high level of ICT expertise; good
understanding of e-business standards; partners with relevant
project and technology expertise. Accept and deal with setbacks.
• Further development: UN/CEFACT Working Group Forum, one
of the next meetings will be in Egypt.
• Need to build trust between public and private entities (gaps in
positions and interests of stakeholders persist).
 A «Success Story»: Estonia
• Low starting point: weak, centrally planned
• Very fast expansion of ICTs (24% of Estonian exports
now – ICT products and appliances)
• Dedicated young, dynamic, technically educated
politicians
• Neighbours helped: Finland saw Estonia as an extension
of its ICT market; Sweden oversees the banking sector
• Predisposition to ICT communications in a country where
most people live separately in houses and farms (like all
Nordics)
• Now slowdown (?) or others are catching up
 E-Government Index
• Country e-Government Rank
• Singapore 5, 43 1
• Finland 5, 40 2
• Iceland 5, 35 3
• Sweden 5, 10 4
• Estonia 4, 95 5
• Canada 4, 93 6
• Hong Kong SAR 4, 90 7
• Taiwan 4, 90 8
• Denmark 4, 88 9
• United States 4, 88 10
• United Kingtom 4, 83 11
• Norway 4, 70 12
• Netherlands 4, 65 13
• Austria 4, 63 14
• Australia 4, 58 15
• Brazil 4, 58 16
• Ireland 4, 58 17
• Korea 4, 38 18
• France 4, 35 19
Active position of Government
to involve the broad public
• Public projects to enhance access: for schools,
local government, libraries
• Privatization and liberalization of telecoms
• Public Private Partnerships: Look@world project -
private initiative to bring people online
• Common use of authentication services: Joint PKI
development; Estonian ID-card can and is used as
authentication tool for e-services and digital
signature
+ predisposition of the population
 Some conclusions

• Globalization is potentially positive, but needs

better management: well-designed rules
• Important to position e-trade in a broader context
of economic development, socio-economic culture
in the country, and engineering growth
• The immediate international environment also
plays a role (in terms of partnerships) –
consequently, look for the right partnerships from
a distance too
 Thank you !
Mario Apostolov
Regional Adviser, UNECE Trade

tel.: +41 22 9171134, fax: +41 22 9170037, e-mail:

mario.apostolov@unece.org