02 findings Bulgaria revised

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Information about 02 findings Bulgaria revised
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Published on May 7, 2008

Author: Rina

Source: authorstream.com

FAO/BSEC Trade Facilitation Project Seminar Series – Armenia:  FAO/BSEC Trade Facilitation Project Seminar Series – Armenia The Economical and Political Environment to Agricultural and Food Trade and Its Implications for Trade Facilitation – Project Findings for Bulgaria – Dr. Holger A. Kray, Senior Consultant FAO International Team Leader holger.kray@email.de findings and recommendations are based on the assessments carried out by National Experts:  findings and recommendations are based on the assessments carried out by National Experts first phase of project: National Experts analyzed the economic, political and legal environment to agro-food trade National Experts analyzed: 'main' areas of trade facilitation: related to the "simplification" of trade procedures, as e.g. technical requirements and standards (TRS) customs clearance procedures customs valuation procedures 'other' areas with direct or indirect impact on trade facilitation, as e.g. membership to trade agreements import tariffs farm support in addition to 'core' trade facilitation measures the assessment of other policies is of critical importance:  in addition to 'core' trade facilitation measures the assessment of other policies is of critical importance In general, agricultural and trade policy can hamper the import of agro-food products by import tariffs, tariff-rate quotas and distortive farm support can stimulate the export of agro-food products by export subsidies and other farm support programs Improper design and implementation of agricultural and trade policy can implicitly affect agro-food trade by creating 'trade-facilitation-pressure'. environment to agricultural and food trade and its implications for trade facilitation in Bulgaria:  environment to agricultural and food trade and its implications for trade facilitation in Bulgaria general assessment in a BSEC-context specific assessment for Bulgaria membership to WTO and other trade agreements:  membership to WTO and other trade agreements All BSEC Member States have signed an increasingly large number of regional and bilateral economic and trade agreements. At the time of our assessment, Bulgaria had signed agreements with BSEC countries providing for preferential trade (e.g., FTAs with Albania, Romania, Turkey; negotiations with Moldova) other agreements providing for preferential trade (e.g., Association Agreement with EU; FTA with EFTA states; CEFTA; FTA with Estonia, FYRoM, Lithuania, Israel, Croatia, Latvia; …) other economic trade agreements (e.g. Stability Pact, BSEC) in a BSEC-context, Bulgaria's future EU-accesseion has important implications for regional agro-food trade:  in a BSEC-context, Bulgaria's future EU-accesseion has important implications for regional agro-food trade Bulgaria will loose the preferential access to many of their traditional CEFTA markets. It is an important event for its BSEC-partners: EU accession will greatly affect agricultural production and trade The BSEC Member States will be disadvantaged compared with the EU members restricted market access stricter food quality standards WTO & other trade agreements: issues potentially affecting trade facilitation:  WTO & other trade agreements: issues potentially affecting trade facilitation potential problems resulting from overlapping membership (e.g. the EU-CEFTA case); compliance of RTAs with multilateral rules of the WTO; difficulties related to the implementation and management of RTAs; possible costs to traders in meeting multiple sets of trade rules Bulgaria, as most other BSEC Members, has a quite liberal and simple trade regime:  Bulgaria, as most other BSEC Members, has a quite liberal and simple trade regime (Nominal) import and export restrictions are a less important factor for BSEC intra- and inter-regional trade in agricultural products. Agro-food trade is more affected by non tariff barriers to trade and problems related to trade facilitation. most BSEC Members have clear understanding of the importance of streamlined customs procedures:  most BSEC Members have clear understanding of the importance of streamlined customs procedures Bulgaria undertook effective measures to improve the situation Trade and Transport Facilitation in Southern Europe Program :Average waiting times were reduced by 60% Preliminary evaluation of the economic impact: the the program achieved a gain in time of 13% or 0.14 hours per truck. Inefficient customs procedures, however, were reported to be a main impediment to trade from/to Bulgaria (spill-over effects!). customs valuation should be based on the principles of the WTO Agreement on Customs Valuation:  customs valuation should be based on the principles of the WTO Agreement on Customs Valuation It seems that some BSEC Member States "misuse" the relative freedom of the WTO Agreement on Customs Valuation, imposing serious constraints on inter-and intra-regional trade. Although this has not been reported from Bulgaria, it might turn into an impediment to Bulgarian importers and exporters, when trading with other countries in the BSEC region. sanitary and phytosanitary measures and food safety control are important barriers to trade in the BSEC region:  sanitary and phytosanitary measures and food safety control are important barriers to trade in the BSEC region SPS measures represent an important barrier to trade in the BSEC region. poor enforcement of existing laws and regulations; non-fulfillment of commitments concerning the adjustment of related legislation, poor coordination among agencies Bulgaria currently has another type of SPS and food safety "problem" adjustment of standards and procedures to the EU requirements, which are much stricter than those in the BSEC Member States – this limits and will further limit the export opportunities of the latter. environment to agricultural and food trade and its implications for trade facilitation in Bulgaria:  environment to agricultural and food trade and its implications for trade facilitation in Bulgaria general assessment in a BSEC-context specific assessment for Bulgaria Bulgaria has made significant progress in liberalizing its agricultural market regimes:  Bulgaria has made significant progress in liberalizing its agricultural market regimes Early transition period: total removal of quantitative trade restrictions Significant liberalization in course of the 1997 reforms Ongoing deregulation of the domestic and foreign trade Bulgarian government started in 2002 the elimination/simplification licensing and approval regulatory regimes important insights were derived from a special survey conducted by the Legal National Expert:  important insights were derived from a special survey conducted by the Legal National Expert interviewees: producers and traders of major agricultural commodities in Bulgaria sector-specific regulations extensively reviewed to assess 'barriers' they impose on trade operations and business development government position: the impact of regulations more than offset by their market-creation and enforcement effects business perception: some regulations represent a means of arbitrary discrimination or a disguised restriction of trade opportunities. some characteristics of the survey:  some characteristics of the survey the interviewed typically were agribusiness managers or executives more specifically, the interviewees comprised representatives of the livestock and meat traders qualified as” traditional” or ‘’new” exporters by the Ministry of economy; grain traders and holders or grain storage receipts claiming private credits; managers of SME operating in the fast growing waste management business and agro-forestry. they answered a number of semi-open questions designed to assess their evaluation of the practical application of regulations in their field of activity tax procedures were named as main impediments to effective trade facilitation:  tax procedures were named as main impediments to effective trade facilitation “… constant changes and unpredictability of tariffs and administrative rules …” related to taxes, the VAT regime and the complexity of the documentation requirements audit and inspection practices named excessive and often inconsistent. discriminatory treatment of SME adversely affects market positions information costs still high, managers declared loosing about 20% of their working time trying to discover how specific regulations will be implemented in their specific case average time and cost spent to ensure compliance with tax requirements in average took 82,5 working days to managers and 246 additional staff days further impediments named by traders:  further impediments named by traders long periods for VAT refunds and VAT underpayment – some exporters spend more time on claiming VAT refunds that on export operations the average agribusiness company is subject of about 19 inspections yearly. tax inspection officers stayed about 12 days in the company office and the officials of veterinary and hygiene control 14 days custom clearance in Bulgaria requires 1,5 days per export operation corruption mentioned as growing source of costs for new entrants in the dairy and meat processing & trade further impediments named by traders:  further impediments named by traders Although registration procedures named among the least important impediment to trade, but related procedures are named to consume too much time Delivery of company status statements takes between 15 to 40 days. Ranges in first places for time/money spent on meeting the requirements On average, an importer applies 6 times for import certificates for food products; ~8 days to receive standard compliance certification form further impediments named by traders:  further impediments named by traders Regulations related to land property transfer appear relatively costly (average of $ 739 paid for fees and taxes). 85 days needed to obtain related permits, approvals, and authorizations Similar period needed for gathering safety and construction permits for existing or renovated private or industrial buildings. major 'barriers' named by interviewees:  major 'barriers' named by interviewees Tax and accounting system administration Policy uncertainty and inconsistency of implementing regulations Employment and labour rights legislation Land/real estate property rights Licensing of business activities Standards, certificates and requirements towards documentation Customs regime application Sanitary rules Currency exchange rules Registration of business activities although Bulgaria is among the most advanced BSEC Members, trade facilitation is a key element:  although Bulgaria is among the most advanced BSEC Members, trade facilitation is a key element assessment has shown that Bulgaria is well integrated into international trade agreements has a simple and liberal trade regime the "nominal" trade policies comply with international standards main potential for actions aiming at a sustainable intregration into regional markets lie in the core of trade facilitation simplification of procedures reduction of complexity improvement of predictability trade facilitation will have significant spill-over effects on the primary production and processing sector 8nk thank you for the opportunity to speak to you today ! a:  8nk thank you for the opportunity to speak to you today ! a

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