THE TRADE POINT PROGRAMME

A key component of the Trade Efficiency Initiative is the "Trade Point Programme", which consists mainly of establishing, operating, and interconnecting Trade Points in all regions of the world. The programme facilitates access to the latest information and telecommunication technologies by making them available to trade operators in developing countries and to SMEs worldwide - at a reasonable cost - through the chain of Trade Points, with the overall objective of reducing the risk of exclusion and increase participation in international trade.

What is a Trade Point?

A Trade Point is:

¨ A trade facilitation centre, where participants in foreign trade transactions (e.g. Customs, foreign trade institutes, banks, Chambers of Commerce, freight forwarders, transport and insurance companies) are grouped together under a single physical or virtual roof to provide all required services for trade transactions at a reasonable cost.

¨ A source of trade-related information which provides actual and potential traders with data about business and market opportunities, potential clients and suppliers, trade regulations and requirements, etc.

¨ A gateway to global networking. All Trade Points are being or will be interconnected the Global Trade Point Network, and equipped with efficient telecommunications tools to link up with other global networks.

The Trade Point system puts potential and actual traders in the position of suppliers as well as of users of strategic information. Traders identify markets for their products, complete procedures and meet requirements on the spot, in less time and at lower cost than before. Traders can make use of new technologies and techniques in the daily course of business, in particular some of the Electronic Data Interchange (EDI) applications already used in many industrialized countries, as electronic billing, payment, cargo manifest, Customs declaration, market opportunities.

The Global Trade Point Network

The Trade Point Programme started in February 1992 at UNCTAD VIII in Cartagena de Indias, with the objective of establishing 16 pilot Trade Points, and its first phase culminated in the United Nations International Symposium on Trade Efficiency. In Columbus, more than 2000 decision-makers from both the public and private sectors including Prime Ministers, vice-Prime Ministers and some eighty Ministers from 136 countries adopted the Ministerial Declaration on Trade Efficiency, which officially launched the Global Trade Point Network (GTPN), a first worldwide illustration of the positive role which the Global Information Highways can play in the field of trade and development.

The GTPN relies on the most advanced available technologies for networking and multimedia communication. One its most widely used features is its 'Web site', on the Internet. Thanks to the Trade Points, all connected countries and enterprises can now exchange 'ETOs' (Electronic Trading Opportunities), as well as other types of information regarding existing trade regulations, banking practices and market intelligence.

As the number of connected Trade Points increases, the Global Trade Point Network will rapidly emerge as one of the main worldwide network for trade-related information flows. It will become increasingly difficult for any major trading partner to stay out of it, and the subsequent increase in traffic will allow substantive reductions in the cost of collecting, formatting, transmitting and processing such information. This will allow both a continued increase in the number of Trade Point beneficiaries (especially SMEs) and a strengthening of the technological advance characterizing the GTPN approach (through reinvestment in research and development).

Customs are a good example of how the connection of Trade Points into a global network can create synergies with efforts made to introduce information technologies in order to increase efficiency in trade. The establishment of efficient Customs systems is a basic objective of the Trade Points, which will be pursued wherever possible through UNCTAD's Automated SYstem for CUstoms DAta (ASYCUDA). ASYCUDA, introduced by UNCTAD in over 70 countries and regions, has brought EDI techniques into Customs, thereby reducing significantly the traditional delays and paperwork holding up merchandise at the borders. The Global Trade Point Network, by enhancing the possibilities to use EDI in international trade, will create the ideal environment in which different national ASYCUDA systems will be able to interact more efficiently. The development of an Internet/WWW interface will give traders an easier access to Customs-related information. It will also foster the setting-up of Direct Trader Input (DTI) services. Besides, countries in which Customs still need to undergo reforms to streamline procedures and to benefit from information technologies, will have additional incentives to introduce the system once they are exposed to it through their connection to the GTPN.

The first phase of the programme was fully achieved, since as of 15 May 1995, 84 Trade Points had been or were being established in 55 countries, while another 41 official requests had been submitted to UNCTAD. The second phase, and in particular the interconnection of the Trade Points, has started with the launching of the GTPN at the Columbus Symposium and will be carried out with the support of the Trade Point Development Centre and with the TPDC Labs (TPDC Labs).

What is the Trade Point Development Centre and what is a Lab?

The primary objective of a TPDC is to assist Trade Points worldwide to get connected to the Global Trade Point Network, particularly through the Internet. TPDC cooperates with regional or sub-regional TPDC Labs providing decentralized access to the GTPN for Trade Points in their region.

The Trade Point Development Centre was initially located in Bangkok (Thailand) and established in cooperation with the Asia Institute of Technology. At present, it is going to be moved to Melbourne, Australia, in coperation with the Royal Melbourne Institute of Technology, RMIT..

Given the rapid multiplication of Trade Points worldwide, the TPDC can no longer centralize services and data from the Global Trade Point Network, specially in areas related to ETO and WWW. That makes it necessary to decentralie the access and processing of the data and set up TPDCLABs in Asia, Africa and Latin America.

At this stage, the following sites are being considered for the establishment of a TPDCLABs: Australia, Brazil, China, India, Kenya and the United States. The central node of the system would remain in Geneva at http://www.unicc.org/untpdc/welcome.html, , since all TPDCLABs Internet servers will be connected via the United Nations International Computing Centre (UNICC)-UNTPDC Server and related Mirror Sites. Each Trade Point will be free to select its own way to connect to the GTPN as long as it maintains full compatibility with the TPDCLAB-UNICC Internet Server. Developing countries (and sometimes other countries without packet switching data network - PSDN) can be connected via Internet and/or SITA.

Solutions developed by the TPDCLABs must abide by the basic principles on which the GTPN is funded, namely openness (i.e. the solutions and systems will be interconnectible and interoperable, which implies a strict respect of universal norms and standards, in particular those promoted by the United Nations, such as UN-EDIFACT), non-exclusivity (i.e., the equipment and services supplied to the GTPN must be delivered on a non-exclusivity basis, leaving the Trade Points permanent freedom to select the best quality/price ratio), and universality (i.e., the solutions developed will be of use to all types of Trade Points in all types of environments with the purpose of 'excluding exclusion). The latter requires, inter alia, additional efforts in favour of least developed countries, as well as SMEs.

Current state, assets and needs of the Global Trade Point Network

A substantive body of experience and expertise has already been made up during the first phase of the Trade Point Programme. A sound basis is now available to carry out the actual interconnection of Trade Points.

As of January 1995, some 60 Trade Points were in the process of being connected and exchanging data and services within the Global Trade Point Network. The connectivity is point-to-point, allowing Trade Points to connect from places traditionally excluded from the so-called Information Highways. An important feature of the Global Trade Point Network is that it is genuinely decentralized. Trade Points stock data at the national level and provide gateway access to the data of other Trade Points.

The UNCTAD Special Programme on Trade Efficiency is now focusing its activities on the development of the Network in Africa through this and other projects which are now being prepared. An important element of this strategy is the cooperation of the Trade Points with NGOs and other institutions operating locally for the integration of smaller enterprises in trade.

Trade Points, NGOs and micro enterprises

In many countries, exclusion from formal economic circuits has prompted micro enterprises to create trade associations capable of dealing with the specific problems of local traders and devising effective ways of dealing with them. By grouping, for instance, local technical and human resources they offer easier access to trading opportunities and credit.

Because of their thorough knowledge of the micro-economic sector, which accounts for 50% of the work-force in many African countries, including Coastal West Africa, and of the confidence of the small entrepreneurs they gained, NGOs provide the most effective link between micro enterprises and the rest of the economy. In this respect, the experience acquired by NGOs can enhance the quality of the services rendered at the Trade Point and, conversely, NGOs can greatly benefit from the Trade Point's position as a gateway to international trade.

In particular, Trade Points activities should focus on the following areas:

- Local trade

In poverty-stricken areas, especially in LDCs, Trade Points can play a vital role in allowing local small producers (micro enterprises) to trade locally, i.e. typically in a radius of less than one hundred kilometres. By providing access to basic information about local markets, and by providing access to trade-supporting services including transport or credit, Trade Points can work hand in hand with local communities and NGOs to promote the activities of micro enterprises in a large array of sectors and regions.

- NGOs' need for institutional strengthening

NGOs and other local development organizations have increasingly become involved in the financing of micro and small enterprises, and have initiated often innovative financing programmes. However many of these institutions have difficulties in combining the businesslike approach required for managing a credit and savings programme with their social oriented roots. Often they lack the technical, administrative and business know-how to provide well-organized and effective services to the small entrepreneurs, which could effectively be offered by the Trade Points.

- Financing of small and micro enterprises

By generating a critical mass of small and micro enterprises at the regional and international levels, the Global Trade Point Network has the potential to increase the interest of credit providers in helping such enterprises to develop. Specific focus should be granted to export credit and to the possibility to establish innovative financial instruments to assist them at the international level. Attention will also be given to develop Trade Points' contribution to the creation and sustainability of clearing houses or other cooperative mechanisms likely to help local small and micro enterprises to overcome hard currency shortages or lack of access to currency markets.

- Training for small and micro entrepreneurs

Considerable training needs exist in most developing countries regarding the basic techniques and rules of international trade. The Trade Points offer an ideal base for setting up sub-regional and regional training programmes in this area. The GTPN in particular, offers promising avenues to stimulate exchanges of experiences among countries, using available information technologies. For the benefit of micro enterprises, such programmes, undertaken in cooperation with or through local institutions and NGOs, may include courses and seminars addressing the specific needs of local micro-entrepreneurs (e.g., basic management and budgeting techniques), as well as activity specific programmes (e.g., on agricultural production and marketing, semi-industrial production, etc.).

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