Towards Crossborder ECommerce Cooperation in GMS BIMPEAGA and

Towards Cross-border E-Commerce Cooperation in GMS, BIMP-EAGA and IMT-GT An Action Agenda Integration Exercise Phouith. Cambodia. GMS 1. GMS 2 18. 05. 2017 1

Greater Mekong Subregion (GMS) Snapshot (2013) People’s Republic of China Land area: ~631 thou sq km Population: ~92. 1 M (2010) Myanmar GDP per capita: ~US$4, 917(Guangxi) Land area: ~677 thou sq km and US$4, 034 (Yunnan) Population: 61. 1 M GDP per capita: ~US$876 (Dec 2012) Thailand Land area: ~513 thou sq km Viet Nam Land area: ~331 thou sq km Population: ~88. 8 M GDP per capita: ~US$1, 908 Population: ~67. 0 M Lao PDR GDP per capita: ~US$6, 233 Land area: ~237 thou sq km The GMS in 2013 § Population of 334 million § GDP of about $2. 5 trillion (PPP, current US$) § Total exports of $411 billion § Total imports of $432 billion § Inward FDI flows near $150 billion Population: ~6. 5 M GDP per capita: ~US$1, 581 Cambodia Land area: ~181 thou sq km Population: ~14. 7 M GDP per capita: ~US$1, 025 2

Quick Facts about the GMS Ø Ø Ø Total population of 334 million in 2013 Total GDP of about $2. 5 trillion in 2013 (PPP, current US$) Total exports of $411 billion in 2013 Total imports of $432 billion in 2013 Inward FDI flows near $150 billion in 2013 Ø More than $17 billion in investment projects under the GMS Program since 1992.

Sector and Multisector Priorities GMS Strategic Framework (2012 -2022) Implementation Vision Corridor Development Transport Linkages (Roads and Railways) • Resource Mobilization • Knowledge Platform Energy and Power Market Integration • Capacity Building Tourism (Mekong as single destination) • Stakeholders Engagement Agriculture (Competitive, Climatefriendly and sustainable ICT Linkages and Applications Environmental Performance (Enhanced) HRD initiatives (facilitate process of GMS integration and address negative consequences) • Monitoring & Evaluation • Sector Forums More Integrated Prosperous and Equitable Subregion • Working Groups • Strategic Alliances and Partnerships • External Partners 4

GMS Economic Cooperation Program Institutional Structure GMS Summit (every 3 years) Ministerial-level Conference (annually) ADB GMS Secretariat National Coordinating Committee in Each Country Senior Officials’ Meeting Forums/Working Groups in Priority Sectors

GMS Economic Cooperation Program • GMS projects: Nearly 70 investment projects implemented across multiple sectors since 1992. Of the $17 billion in project costs, about onethird financed by ADB, one-third financed by development partners, and one-third financed by GMS countries. • Program Sectors: – – – Transportation Transport and Trade Facilitation Energy Agriculture Environment Human Resource Development – Urban Development – Tourism – Information and Communications Technology – Other Multi-Sector Programs (ex. economic corridor development)

Part 2 b: Cooperation initiatives in subregional program (include e-commerce) • Strategic framework 2012 -22: ü identify and prioritize further information superhighway network (ISN) infrastructure needs, ü build capacity for the use of advanced technology, ü advance cooperation on new ICT, ü promote ICT applications including e-commerce and elearning, ü channel human resources to ensure the sustainable development of the sector, and ü continue to develop pilot ICT projects in rural areas.

Concepts • Electronic commerce (E-commerce) defined as “purchases and sales conducted over computer networks, using multiple formats and devices, including the web and electronic data interchange” has be come part and parcel of doing business cross-border, even in the least developed countries.

Common Characteristics of High Ranking • • • Strong financial sector Efficient logistics networks/customs clearance High postal coverage High internet penetration Low VAT on e-products

Other factors • • • Legal and regulatory framework Use of e-money Wealth Socio-economic factors Culture (people prefer to shop in person) Quality of statistics

Digitizing Trade • How is digital changing trade? • Is E-commerce good for development? • What can aid for Trade do for e-commerce?

3 trend that are changing trade • Better ICT connectivity • Digitization • E-commerce

Af. T • Development assistance to reduce the costs of trade • Some donors have special lines of assistance (ADB does not) • Progress monitored every 2 years by WTO process (Global Review of Aid for Trade)

Af. T do for Trade • • • Af. T promote connectivity Trade cost are trending down Pacific exporters are focusing on niche exports Ecommerce has potential to support SMEs Women-led firms excluded less in ecommerce

The needs of small exporters are different • • Postal shipping times Warehousing Air transport ICT connectivity

China’s case studies: Cross-border E -commerce Benefits and Inclusive Trade for SMEs • Maching buyers and sellers • Increase the availibility and choices of consumer products • Easy and convenient for business and consumers • Increase the market efficiences • Reduce the transaction cost • Facilitate international trade and help the SME to participate in global trade

Implications for Inclusive Trade Policy and Regulation • How can we make sure that • Inclusive Trade: Reduced barrier of entry and easier access to global trade by MSME and consumers

Philippine E-commerce Roadmap 2016 -20 • The challenges • Opportunities • The framework for the promotion of Ecommerce

Thailand: Cross-border E-commerce Applications in Tourism • Thailand has developed a digital platform to engage with the public and private sectors of the travel and tourism industry give opportunities for organizations of any kind and size to make the campaigns to promote the Tourism • The advanced E. payment is favourable conditions for Cross-border E-commerce Tourism

APEC, ASEAN and sub-regional program • Identify barriers and restrictions to cross-border ecommerce participation from government perspective; • Promote dialogue and interaction among government agency in new legal issues. • Identify best practices to participate cross-border ecommerce from private sectors • To actively encourage public and private sector to develop and finance projects in appropriate for a to address gaps among MSMEs • To support capacity-building efforts amongs APEC economies to develop their domestic paperless trading regulations;

E-commerce benefits • • Establish an Online Presence Attract New Customers Save on Operational Costs Better Understand Your Customers Boost Brand Awareness Equip Customers with Information Drive Conversions and Sales

Opportunities for cooperation • To Boost ecnomic • E-commerce creates new opportunities for rural area. • Facilitated and support e-commerce activities by SMSs, government, and business/public sectors partnerships; • Develop measures and indicators on the uptake, use and flows of electronic ecommerce; • Facilitate the uptake and maximize the benefits of ecommerce • Study the range of businsess model for electronic authentication • Cooperate for a seamless system of cross-border ecommerce.

Cross-border E. commerce cooperation challenges and constraints • Regulatory Issues • Inconsistency: • There is debate about the applicability of taxes on ecommerce transactions especial the small amount of goods. • Undeveloped customs clearance system for E. commmece • Online insercurity • Domestic incorporation: Several countries treat domestic companies quite differently from those incorporated abroad. • Lack of Clarity and strength of legal frameworks: Several countries around the world have a rather weak legal framework. Even where the framework is sound, there is often a huge issue with delays in the judicial process. 23

Cross-border E. commerce cooperation challenges and constraints • Regulatory Issues • Legal limitations to sale: Every country has its unique set of dos and don’ts about what can be sold to whom. Most countries consider transactions entered into by minors as unenforceable, but the exact age of legal adulthood varies by country. 24

Cross-border E. commerce cooperation challenges and constraints • Infrastrucure issues • Payment Methods and Processing • A robust payment processing system is absolutely necessary for ecommerce. Preferred payment mechanisms vary across the world • Lack of well-functioning financial systems 25

Cross-border E. commerce cooperation challenges and constraints • Logistics and Reverse Logistics The costs associated with cross-border logistics can be the tipping point • Reliability and predictability. • The complexity of reverse logistics. Given the costs, customs duties, and documentation, many ecommerce players may not be able to provide reverse logistics in cross-border situations. 26

Cross-border E. commerce cooperation challenges and constraints • Others • Local tastes to sensitivity for cultural factors, • Limited consumer preferences toward online transactions 27

Part 6: Cross-border E-Commerce Framework for Cooperation and Action Agenda • What areas for cooperation in cross-border e-commerce in the GMS, BIMP-EAGA and IMTGT, e. g. policy support and advocacy, strengthening institutional structures, information sharing (database and consumer markets), better policy coordination, setting “joint support services” and capacity development 28

Part 6: Cross-border E-Commerce Framework for Cooperation and Action Agenda • Enhance cohesion and cooperation of e-commerce enterprises among member countries. • Promote facilitation of cross-border e-commerce customs procedure. • Encourage investment incross-border e-commerce infrastructure • Improve e-commerce supporting services system. • Conduct capacity building on e-commerce 29

Part 6: Cross-border E-Commerce Framework for Cooperation and Action Agenda Following GMS Summit held in December 2014, Objective: • To utilize e-commerce as a means to promote cross border trade and facilitate goods and commodity flows; and • To help (MSMEs) to better integrate into international market, and increase the chance for SMEs to better participate in global supply chains with lower cost. • PRC (Yunnan) Lancang-Mekong Subregional Economic and Trade Development Center (LMEC) to take the responsibility to serve as focal point for the cooperation platform in the first three years. 30

The End