EPI Paper: Georgia Trade Exchange

The paper puts forth the recommendation to proceed in moving trade facilitation in Georgia to the next level, which is the development of the Georgian Trade Exchange (GTX). This will bring together all of the players — small, medium, and large — involved in trade into one central system of information sharing and processing. It is the logical next step for the government of Georgia to pursue, because the overall feeling is this has been a long time in coming, and will have a very positive impact on trade facilitation.

The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) defines a Single Window (SW) as “a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements.” It is a one-stop service portal providing an integrated electronic gateway that enables trade-related information and documents to be submitted by exporters, importers, customs brokers, freight forwarders, shipping agents, and other players in the international trade chain only once at a single entry point. This information and documents are then transmitted to customs, quarantine, licensing, port, and other government authorities, as well as to insurance companies, banks, and all other private agencies involved in international trade. An SW can also facilitate the payment of duties, taxes, fees, and commercial invoices and the use of various value-adding services, such as e-training and e-marketing.

As specified in UN/CEFACT Recommendation No. 33, the SW concept refers to a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements. If information is electronic, then individual data elements should only be submitted once.

The building blocks are in place, and some of the industries have or are in the process of becoming mature enough to utilize the functionality of an SW. The SW will be a set of interface specifications for the interaction between various government and private trade systems. These interface specifications should be open and public, and competition among suppliers of different solutions will be encouraged, which further drives down the costs for the ultimate users. There will be no need to impose single system architecture on Trade — any style of system and distribution of operations should be acceptable as long as it complies with the data definitions and other protocol specifications set by the lead government agency.

The successful introduction and implementation of an SW concept depends to a considerable extent on certain preconditions and success factors that vary from country to country and from project to project. Some of these conditions are as follows:

  • Political Will
  • Strong Lead Agency
  • Partnership Between Government and Trade
  • Establishment of Clear Project Boundaries and Objectives
  • International Standards and Recommendations
  • Communications Strategy
  • Identification of Possible Obstacles

As mentioned previously, many of these conditions are part of the mindset in Georgia; more specifically, the first three are very positive conditions as they relate to Georgia. These three are the main conditions that, if negative, can impede any project of this size and scope to begin at all. Many of the others are typical of a large project and will need to be addressed when and if they occur at all. But with the first three conditions being positive, any negative conditions can be addressed with a solution.

In order to develop the GTX, there needs to be a sponsor who is a nonparticipant, preferably a government agency. There is a government group that is willing to be the sponsor or lead organization in Georgia, and this is the Data Exchange Agency (DEA). They are setting the standards involved in the processing of the data and also in the developing of the infrastructure to process the data.

Implementation of the GTX requires process change and process improvement. Implementing software solutions without first reviewing and improving the processes performed is not the correct way to proceed. Software solutions by their own are not the solution, and many times it makes things worst. This is a union between process improvement and technology implementation. Together, they are a powerful combination that can assist any business or industry get to the next level. It does not always mean that high-tech solutions ICT be applied in order to achieve global standards in trade facilitation.

One other point is that the implementation should be gradual and progressive, where early benefits can be demonstrated and thereby grow the appetite both in the trade and government for continued development. One needs to show progress and, more importantly, a commitment to the concept of the GTX. Phase I in any major project like this one is the most important phase. It is important that Phase I address any concerns related
to the concept of the Trade Exchange (TX). But it also has to provide functionality that can be used in the daily processing of cargo because not providing any type of functionality will lead to the same problem as providing technology that does not work.

Further Reading