Rise in “protectionism” could hit growth in cross-border e-commerce, carriers warn
A report commissioned by the international express delivery industry has warned that a return to protectionism could hinder expected growth in cross-border e-commerce. The study issued by the Global Express Association, the trade body representing DHL, FedEx, TNT and UPS, said international e-commerce is expected to be the biggest change in e-commerce generally going forward within a global ecommerce industry set to grow from a $1.4 trillion (USD) turnover to $2.3 trillion by 2017.
But, the report said the growth — could be thwarted by an increasing tendency by national governments to bring in trade restrictions to protect domestic businesses.
The report said G20 countries have introduced more than 1,500 new non-tariff trade restrictions since 2014.
The study carried out by London-based consultancy Frontier Economics on behalf of the GEA, said the need for customs reforms was also holding back international e-commerce.
“The rise in protectionism or delays in reform could hinder the realisation of the e-commerce expansion, which is expected to be a key driver of economic growth,” the report stated.
“As e-commerce is likely to make up an increasing proportion of trade and customs capabilities are important for facilitating e-commerce, this suggests that the impact of improving [customs procedures] on trade could be increasing in the future.”
Customs reform
Other customs reforms recommended by the report included changes to duty exemption thresholds, simplifying and digitising required paperwork, and streamlining inspections.
Using data from the big four express carriers and customs operations in 140 countries, the study suggested that implementing any one out of 10 recommended customs reforms — for example, introducing 24-hour automated customs processing — would on average improve a country’s customs capability by 4.4%.
As an example, the study suggested that if a country like Bolivia made two of the recommended customs reforms, trade to the South American nation would increase by 8.8% or $2.03bn.
The report said that the international express industry can be a major facilitator for countries reforming their customs procedures and thereby boosting their trade and e-commerce.
The report also noted that the expected increase in international e-commerce will be dependent on well-functioning express delivery services, particularly with SMEs unlikely to set up their own supply chains.
Commenting on the report, UPS global public affairs president Laura Lane said: “The study demonstrates the power of customs modernization in driving trade for developed and developing countries alike, and the role of express delivery providers in facilitating that trade for small, medium and large companies.”
Despite the global financial crisis, the GEA report said that international express delivery volumes have grown by 7% on average over the past five years, with strongest growth outside Europe and North America.
