The Security and Trade Facilitation Nexus

Abstract

Improving levels of trade facilitation is one of the remaining challenges to enhancing connectivity and trade growth in South Asia, but border and internal security concerns are often perceived as a barrier to implementing key reforms. Security is a legitimate issue for South Asian nations. But there needs to be a balance to achieve the optimum level of security without restricting trade and damaging a nation’s ‘economic’ security. Even border management agencies employing a ‘100 percent’ intervention policy does not have the resources to examine every package. The challenge is to focus security resources to target transactions of highest risk, using sophisticated analysis of transaction data and maintaining visibility and integrity of supply chains. After the 9/11 attacks, several governments had to address the challenge of securing their national borders and protecting their international supply chains against terrorist threats. There is concern that poor border security risks the trafficking of weapons or drugs, entry of terrorists or their means of support, or other threats. Following the attacks, many jurisdictions emphasized more intervention and an increased regulatory burden on international trade. However, added emphasis on security need not become a barrier to international trade or render trade uncompetitive. Based on several case studies, this note synthesizes some principles that can be adopted to govern the balance between managing security risks and facilitating trade.