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EDICOM 2012Experience of Trade Facilitation initiatives in Japan by JASTPRO as the focal point for UN/CEFACT to disseminate the standards and recommendations by UN/CEFACT
Kazumi Hirai
Ex. Director
JASTPRO
1
JapanAssociation forStandardization andTrade PROcedures
Kazumi Hirai
How Japan could have succeeded in developing it as a Trading Nation
Development
Nationality
Culture
History & Gegraphy
2012/11/222
Our Success thus far has been based upon:
which are different from your economy by nature
Kazumi Hirai
For rapid industrialization the “CARD” is not one
Innovation of productivity
Development of Quality Control
Development of Infrastructure
Computerization (e-XXX)
Standardization
2012/11/22
3
Japan succeeded in it, as we did them continuously
Kazumi Hirai 4
Agenda
1. About JASTPRO – What/how we did
2. First Period of JASTPRO’s activities
3. Second Period of JASTPRO’s activities
4. Third Period of JASTPRO’s activities
5. Personal consideration on standardization
6. Comparison of National Strategy taken by EU, USA, and Japan
2012/11/22
Kazumi Hirai
The Foundation of JASTPRO in 1974
In 1974 the Ministry of Finance (Customs Bureau), the Ministry of Industry, and the Ministry of Transport (*1) had taken the initiative to establish the organization named JASTPRO (Japan Association for Standardization and Trade Procedures), according to the ECE recommendation No. 4 issued in 1974.
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*1 : The name of those three Ministries are older names at that time
Kazumi Hirai
The ECE Recommendation No.4 published in 1974
The Governments of countries Members of UNECE, in accordance with their national regulations, encourage the implementation of recommendations on facilitation of international trade procedures through setting up national organizations or committees, or by administrative or other suitable means.
To draw the attention of the Economic and Social Council and the other United Nations Regional Economic Commissions to the desirability of establishing national committees on facilitation of international trade procedures, in countries not members of the Economic Commission for Europe, where they do not exist.
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Kazumi Hirai
The Economies which implemented the Rec. 4 as of 1995 are 58 to establish their “PRO” organization (FALCOM)
ECE members (26): Austria, Belgium, Bulgaria, Switzerland, Czech, Germany, Denmark, Estonia, Spain, Finland, France, United Kingdom, Hungary, Ireland, Israel, Iceland, Italy, Netherlands, Norway, Poland, Romania, Russian Federation, Sweden, Slovakia, Turkey, USA
Asia Pacific (15): Afghanistan, Australia, Bangladesh, China, HK, India, Korea, Sri Lanka, Malaysia, Pakistan, New Zealand, Philippines, Singapore, Thailand, Chinese Taipei
Latin America (9): Brazil, Colombia, Costa Rica, Dominica, Guatemala, Honduras, Panama, Paraguay, El Salvador,
Africa (8): Gabon, Kenya, Morocco, Nigeria, Senegal, Tanzania, South Africa, Zambia
2012/11/22
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Kazumi Hirai
JASTPRO was founded by PPP
Under the initiative by three Ministries the following organization donated the fund to establish JASTPRO as a Public-Private-Partnership:
Japan Foreign Trade Council, Inc. Japanese Ship-owners’ Association The General Insurance Association of Japan Japanese Bankers Association Japan Customs Brokers Association The Japan Warehousing Association Inc. Japan Airlines International Co., Ltd. Japan Keirin Association Japan Ship Promotion Association
(Note: All the above names of organization are at the point of donation in 1974.) 2012/11/22
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Kazumi Hirai
So many stakeholders exist in international trade lane PPP with Consultation and Communication are indispensable when an economy seek trade facilitation
BUY
• Exporter/Importer• Government
Authorities• Insurance
Companies• Chamber of
Commerce• Trade agency,
trading cos.• Banks for trade
finance• Trade Facilitation
Org.
SHIP
• Customs• Freight
Forwarders• Customs Brokers• Shipping Cos.
Airlines• Surface
transporters• Inspection
authorities• Quarantine
Services• Other
Intermediates
PAY
• Banks• Trade agency• Trading
companies
9
Without appropriate cooperation by those stakeholders, the performance of international trade procedures cannot be improved. That is why the Recommendation No.4 was issued
2012/11/22
Kazumi Hirai
What JASTPRO did till now First Period ( Its advent / early 1980s)
When all the business had been done manually by paper To standardize paper format and to simplify items to write in
To build awareness on the ECE Recommendations and standards set out by WP.4, JASTPRO had organized local committees inviting both public and private sectors
Second Period ( late 1980s / late 1990s)On the basis of using large sized electronic computers, represented by IBM’s machines, and leased line and/or VAN services between organizations, to promote UN/EDIFACT, the first generation International EDI standard
Third Period (early 2000s / Now)To enjoy the economy by the ICT innovation using personal computers and Internet, to develop and promote EDI in XML (Extended Markup Language)
102012/11/22
Kazumi Hirai
What is consistent from the beginning till now
Throughout these three periods, as the authorized focal point in Japan for UN/CEFACT and AFACT, we JASTPRO has promoted reengineering of business process by means of tools which was regarded the best as available at respective age, under PPP
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Kazumi Hirai 12
Agenda
1. About JASTPRO – What/how we did
2. First Period of JASTPRO’s activities
3. Second Period of JASTPRO’s activities
4. Third Period of JASTPRO’s activities
5. Personal consideration on standardization
6. Comparison of National Strategy taken by EU, USA, and Japan
2012/11/22
Kazumi Hirai
By standardization of paper format, we can streamline the process to handle the business documents, also we can minimize errors made during the course of works to set out documents
Firstly JASTPRO had promoted the implementation of the UNECE Recommendation No.1, i.e. United Nations Layout Key for Trade Documents (First release in 1973, revised one in 1981) ) and its successive Recommendations
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1. In the First Period, what JASTPRO did – The Basics of JASTPRO’s activities Standardization of paper format
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Kazumi Hirai 14
Concept of United Nations Layout Key for Trade Documents
Data items in general to be used across Industries (mainly for commercial purpose
Data items particularly specific to an industry such as commodity, invoice details etc. …
Data items relevant to the function of a document, i.e. signature etc. (columns for free entry) A4 size in vertical, line pitch is 1/6
Inch(4.24mm), character pitch 1/10 inch (2.54mm),
Standardization and Simplification (S & S) of paper format are not an older story, but are valid and effective measure even after the implementation of electronic documents (EDI) till now
S & S of entry items can cut man-hours to set out documents
(In case of public documents) Enforcement of S & S can check arbitrary addition of entry items by a public authority
In combination with the implementation of standard code sets, S & S can cut man-hours to convert codes, and rationalize the database maintenance works
S & S can cut the works to compile definitions of entry data items as manuals for users, every time to set out them
S & S facilitate the development of packaged software at more economical cost
2012/11/22
Kazumi Hirai 15Legibility and readability are very essential to avoid miss understanding
Kazumi Hirai
UN/ECE Recommendation No. 6 in 1983: “Aligned Invoice Layout Key for International Trade”
The Recommendation No. 11 issued in 1978: “Standardization of format and simplification of trade procedures for transportation of Dangerous goods”
The Recommendation No.12 issued in 1979: “Measures to Facilitate Maritime Transport Documents Procedures”
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1. In the First Period (continued)– The Basics of JASTPRO’s activities Standardization of paper format (#2)
Kazumi Hirai
The Recommendation No.13 issued in 1979: “Facilitation of Identified Legal Problems in Import Clearance Procedures”
The Recommendation No.18 issued in 1981: “Facilitation Measures related to International Trade Procedures”
The Recommendation No. 22 issued in 1989: “Layout Key for Standard Consignment Instructions”
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1. In the First Period (continued)– The Basics of JASTPRO’s activities Standardization of paper format
Kazumi Hirai
Development of Japanese version of standard formats based on the ECE Recommendations
JASTPRO Format No.1 published in 1978• Commercial Invoice, Packing List, Certificate of
Origin, Shipping Instruction, Maritime Insurance policies
JASTPRO Format No.2 published in 1979• Dangerous Goods Application
JASTPRO Format No.3 published in 1979• Dispatch Order
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JASTPRO had organized local committees to invite stakeholders in order to set out Japanese version of standard formats, which are fitted with customary business procedures in Japan, keeping conformity with the ECE Recommendations
Kazumi Hirai 19
Agenda
1. About JASTPRO – What/how we did
2. First Period of JASTPRO’s activities
3. Second Period of JASTPRO’s activities
4. Third Period of JASTPRO’s activities
5. Personal consideration on standardization
6. Comparison of National Strategy taken by EU, USA, and Japan
2012/11/22
Kazumi Hirai
2. In the Second Period, what JASTPRO did to promote the implementation of standards and recommendations of Electronic Data Interchange (EDI) by UN/CEFACT
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The Recommendation No. 14 issued in 1979: “Authentication of Trade Documents by Means Other than Signature”
The Recommendation No.25 issued in 1995: “Use of the United Nations Electronic Data Interchange for Administration, Commerce and Transport Standard (UN/EDIFACT) ”
The Recommendation No.26 issued in 1995: “Commercial Use of Interchange Agreements for EDI”
The Recommendation No.31 issued in 2000: “Electronic Commerce Agreement”
Kazumi Hirai
2. In the Second Period, JASTPRO also propagated the Recommendations on unified code
The Recommendation No. 3 issued in 1974: “Code for the Representation of Names of Countries” ISO3166
The Recommendation No. 5 issued in 1974: “Abbreviations of INCOTERMS”
The Recommendation No. 7 issued in 1975: “Numerical Representation of Dates, Time and Periods of Time”
The Recommendation No. 9 issued in 1996: “Alphabetic Code for the Representation of Currencies” ISO4217
The Recommendation No. 16 issued in 1980: LOCODE - Code for Trade and Transport Locations
The Recommendation No. 17 issued in 1982: PAYTERMS - Abbreviations for Terms of Payment
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Kazumi Hirai 22
For example
Recommendation No. 3 to use ISO 3166Country code
Iran = IR Japan = JP
Recommendation No.16 UN/LOCODE
Tehran = IRTHR Tokyo=JPTKY
Recommendation No. 7
21st November 2012 2012/11/21
Recommendation No. 9
US$ = USD Japanese Yen = JPY
2012/11/22
Kazumi Hirai
The Recommendation No. 19 issued in 1981: “Code for Modes of Transport “
The Recommendation No. 20 issued in 1985: “Codes for Units of Measure Used in International Trade”
The Recommendation No. 21 issued in 1986: “Codes for Passengers, Types of Cargo, Packages and Packaging
Materials”
The Recommendation No. 23 issued in 1990: “Freight Cost Code – FCC”
The Recommendation No. 24 issued in 1995: “Trade and Transport Status Codes”
The Recommendation No. 28 issued in 2000: “Codes for Types of Means of Transport”2012/11/22
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2. In the Second Period, JASTPRO also propagated the Recommendations on unified code
2012/11/22
Kazumi Hirai 24
Rec. No. 19Mode of transport
Rec. No. 16UN Location code
ISO Country code
Rec. No. 17 Terms of payment
Rec. No. 9Currency code
Rec. No. 20 Units of measure
Rec. No. 28Means of transport
Commodity code
Rec. No. 21Package code
Kazumi Hirai
2. In the Second Period, JASTPRO didextra works to disseminate UN/EDIFACT related Standards and Recommendations
JASTPRO had organized local committees to translate and compile the following publications in Japanese such as:
1. UN/EDIFACT Guide Book Japanese version
2. UN/EDIFACT Syntax Rule Version 4 Japanese version
3. UN/EDIFACT Message Design Guideline Japanese version
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Kazumi Hirai
2. In the Second Period, in 1991, JASTPRO had co-organized Asia EDIFACT Board
In 1991, Korea, Singapore, Chinese Taipei, and Japan had established Asia EDIFACT Board in order to facilitate the UN/CEFACT Rapporteur for ASIA, whose mission is;
(a) Promote UN/CEFACT’s interests and activities among Governments,
intergovernmental organizations, relevant trade associations and business and trade facilitation organizations;
(b) Encourage the participation of experts in UN/CEFACT’s work program and stimulate the implementation of UN/CEFACT’s standards, recommendations and other deliverables;
(c) Coordinate UN/CEFACT’s activities in the region.
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Kazumi Hirai 27
Agenda
1. About JASTPRO – What/how we did
2. First Period of JASTPRO’s activities
3. Second Period of JASTPRO’s activities
4. Third Period of JASTPRO’s activities
5. Personal consideration on standardization
6. Comparison of National Strategy taken by EU, USA, and Japan
2012/11/22
Kazumi Hirai
3. In the Third Period, JASTPRO has continued collaboration with UN/CEFACT, which has developed ebXML with OASIS
The latest formation of UN/CEFACT Japan Committee for PPP to disseminate UN/CEFAC Standards and Recommendations
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UN/CEFACT Japan Committee (JEC)
JASTRPO as Secretariat
JEC Steering Committee
Japan Committee for UN/CEFACT
Standards (JUS)
Supply chain Information
Platform Study WG (SIPS)
AFACT Travel Tourism WG
UN/CEFACT
AFACT
Kazumi Hirai 29
Recent activities of Japan in UN/CEFACT through JASTPRO, and Implementation of UN/CEFACT Standards & Recommendation
Implementation of National Single Window by 6th Generation NACCS system
Development of business standard for eTendering, Small Scale Lodging House Information exchange
Implementation of e-CERT by Animal Quarantine Services under the Ministry of Agriculture, Forestry and Fisheries
2012/11/22
Kazumi Hirai
WHY: The Cost of EDI become enormous when parties to join increases without EDI standards
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A & Co.
B & Co.
C & Co. D & Co.
E & Co.
Five (5) parties demands 4! = 24 combinationsTen (10) parties demands 9! = 362880 combinations
Emerging Gap
2012/11/22
Kazumi Hirai 32
Reality and Needs in the business field in International trade
Solution to be provided by the Standards and Recommendations by UN/CEFACT and any other Standard Organizations
Kazumi Hirai 33
Agenda
1. About JASTPRO – What/how we did
2. First Period of JASTPRO’s activities
3. Second Period of JASTPRO’s activities
4. Third Period of JASTPRO’s activities
5. Personal consideration on standardization
6. Comparison of National Strategy taken by EU, USA, and Japan
2012/11/22
Kazumi Hirai
Standards are foundation for market competition to result in economy for consumers
Based on standards as the common platform, companies in private sectors engage market competition in price, quality, reliability of products and services, for their survival
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Economy for consumers
Market Competition
(International) Standards
Kazumi Hirai
What is important to remember is that standards are not neutral nor given to you.
When a company can take a leadership in developing a national and/or international standard, it can have an advantage for the market competition.
Even if a company has a candidate for a new standard, it may become worthless unless it failed in working to enroll a national and/or an international standard
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National awareness and strategy are essential
Kazumi Hirai 36
Agenda
1. About JASTPRO – What/how we did
2. First Period of JASTPRO’s activities
3. Second Period of JASTPRO’s activities
4. Third Period of JASTPRO’s activities
5. Personal consideration on standardization
6. Comparison of National Strategy taken by EU, USA, and Japan
2012/11/22
Kazumi Hirai
The Strategy on standardization taken by EU Europe 2020Standardization is regarded as an essential tool for developing a Single Market among EU 27 countries.
Under common standards in EU, any company can have a business chance to sell their products and services in the single market by same specification
Consumers and SMEs in EU 27 can enjoy Economy of Large Scale and market competition to give them better products and services at cheaper price for consumers
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To develop a
Single Market
SEPA: Single Euro
Payment Area
Harmo-nized
standardization in
EU27
Stronger Competiveness
Kazumi Hirai
EU standards shall not be confined in EU, but to be extended to international standards in order to let EU private companies have stronger competitiveness gained in a single market in EU27.
To market EU standards in Asia, African and Latin America, they shall take the advantage of the former colonial power in an appropriate manner, to make EU standards international one.2012/11/22
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The Strategy on standardization taken by EU Europe 2020
Kazumi Hirai
Strategy on Standardization taken by U.S.A.
The Government shall be a smaller one, which should not administrate standardization of private sectors, but to facilitate innovation for them. Standardization does not make any sense unless it facilitate innovations.
Research and Development by Governmental agencies which create procurement of US$55 Billion. Patents as the deliverables of R&D have been given as non-exclusive license to private companies.
Governmental Procurement shall implement standards developed by standards developing organizations (SDOs) in private sector.
Government shall facilitate SDOs to develop international standards in order to enhance competiveness of private companies.
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Consequently, US companies have taken the leadership in ICT innovation, which has resulted in international standards.
2012/11/22
Kazumi Hirai 40
Domestic Standards
International Standards
Domestic =>Inter-
national std.
Strategy taken by EUStrategy taken by Japan
Outreach to Asia, Africa,
Latin America
Applicable
only in Japan
Standardization to enlarge the Market
To be used
in case of
international trade
Consideration on the standardization in Japan
Vicious Circle of Japan in respect of standardization
Living in Islands
Lack of National
Strategy on International
Standardization
Lower engagement
in International
Standard Organization
Standardization led by EU
and USA
Poor deliverables for Japan
Lower evaluation on International
Standard Development
2012/11/22
Kazumi Hirai 41
Japan as a Galapagos in Far East