Building capacity to help Africa trade better

Azevêdo welcomes efforts to help implement Trade Facilitation Agreement


Azevêdo welcomes efforts to help implement Trade Facilitation Agreement

Azevêdo welcomes efforts to help implement Trade Facilitation Agreement
Photo credit: Ship and Trade Corporate Services

Director-General Roberto Azevêdo welcomed on 17 December the pledges made by governments and private sector entities to help developing and least-developed countries implement the WTO’s Trade Facilitation Agreement (TFA), declaring efforts to provide support have “got off to a good start”.

“There is significant support and funding available from a range of partners to help with trade facilitation measures, and specifically with the implementation of the Trade Facilitation Agreement,” the Director-General said. “This is very positive, and we must keep this momentum… the more extensive and faster the implementation of the Trade Facilitation Agreement, the greater the benefits will be.”

DG Azevêdo spoke at an event on trade facilitation which included the launch of the Global Alliance for Trade Facilitation, a new public-private platform that seeks to use private sector expertise and resources to support trade facilitation reforms. The event took place on the sidelines of the WTO's 10th Ministerial Conference in Nairobi.

Adopted at the WTO's 2013 Ministerial Conference in Bali, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues.

The TFA will enter into force once two-thirds of the WTO's membership has accepted the Agreement. To date, 63 WTO members have ratified the TFA, with six new accessions received in the past few days and others expected shortly.

The benefits of the TFA were highlighted at the event, with several speakers offering concrete examples of how trade facilitation is being implemented and how it has helped companies and national economies.

I.V. Mazorodze, Commissioner of Customs and Excise with the Swaziland Revenue Authority, said efforts undertaken by his government so far on implementation have included the creation of a National Trade Facilitation Committee, the development of a National Trade Portal, training of customs clearing agents, upgrading border infrastructure and the drafting of a new Customs Act.

He noted that Swaziland's ranking in the World Bank's “Doing Business” survey has improved significantly in recent years. The country currently ranks 30th worldwide for the survey's “trading across borders” indicator.

Elizabeth Kimani, General Manager of Nairobi-based Masai Flowers, cited the importance of quick customs clearance for her business. For the busy St. Valentine's Day holiday, hiccups in flower deliveries not only have important economic impacts but, she noted with humour, can also sour relationships.

DG Azevêdo noted the unique architecture of the TFA, which provides developing and least-developed countries with the flexibility to tailor their commitments and implementation schedules according to their specific needs and commensurate with their level of development.

In July 2014, the WTO announced the launch of the Trade Facilitation Agreement Facility (TFAF), which will assist developing and least-developed countries in implementing the TFA. The aim of the Facility is to help WTO developing and least-developed country members find assistance programmes of donor members and organizations and, when assistance cannot be found, to fund project preparation and project implementation.

Selena Jackson, the World Bank's special representative to the WTO, noted that the Bank set up its Trade Facilitation Support Program a year and a half ago to assist governments with TFA implementation, with $36 million in funding. To date, 47 countries have expressed interest in receiving assistance, with implementation programmes launched in 20 countries.

DG Azevêdo stressed the importance of close public-private cooperation in ensuring smooth implementation of the TFA. 

“The private sector is well aware of the problems caused by high costs and long delays at the border – and the barriers to trade that they represent,” he said. “These barriers can often mean the difference between being able to compete internationally – or not.”

The Director-General said the launch of the Global Alliance “is a very important moment for the WTO, and for the entire trade facilitation community.” He thanked the World Economic Forum, the International Chamber of Commerce, the Center for International Private Enterprise, and donor countries for supporting the initiative. His full speech is available here.

The Global Alliance is supported by contributions from Canada, Germany, the United Kingdom and Australia. A number of multinational companies have also pledged support, including A.P. Møller-Mærsk, DHL, Wal-Mart, eBay and Huawei. 

United States Trade Representative Michael Froman said implementation of the TFA can help promote export diversification, attract investment, improve revenue collection and support the engagement of small and medium-sized enterprises (SMEs) in the global economy.

“From our own perspective, we know that SMEs are really the driving force of the economy, they're the job creators,” Mr Froman said. “When we ask our SMEs what are the biggest challenges facing them when they engage in international trade, the number one issue they point to are the complexities at the border, the various customs procedures and border measures. The TFA is very much an effort to address that.”

Lord Francis Maude, the United Kingdom's Minister of State for Trade and Investment, noted that the TFA would produce “real benefits” for all WTO members, but for developing countries in particular. 

“At present, one standard container from Sub-Saharan Africa will take 31 days on average and cost nearly $2000 to ship,” he said. “To do the same from East Asia is ten days less and half the cost.”

The reforms required by the TFA are “hard,” Lord Maude admitted. “It's tackling inertia, it's tackling vested interests who are used to things being done in a particular way.”

More information on trade facilitation and the TFA can be found at www.wto.org/tradefacilitation.

About the Alliance

Trade facilitation

The World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) provides a unique opportunity to promote inclusive growth by making cross-border trade easier, quicker and less costly for businesses of all sizes.

In ratifying the TFA countries will commit to a series of reforms to reduce red-tape at borders – from measures on the release and clearance of goods, through to enhanced cooperation between border agencies. It is estimated that full implementation of the Agreement could reduce trade costs by an average of 14.3%.

A recent WTO study suggests that implementing TFA reforms could create around 20 million jobs – the vast majority in developing countries. The Agreement will help developing countries diversify their exports and tap into global value chains. More transparent and predictable border procedures will also make it easier for small- and medium-sized businesses to connect with customers in foreign markets for the first time.

The Global Alliance for Trade Facilitation

In this context three major private sector organizations – the Center for International Private Enterprise, the International Chamber of Commerce and the World Economic Forum – have joined forces in the Global Alliance for Trade Facilitation.

The Alliance is a unique public-private platform to leverage private sector expertise, leadership and resources to support effective trade facilitation reforms measured by real-world business metrics.

The Alliance’s activities are supported by the governments of the United States, the United Kingdom, Canada and Germany and will also draw on contributions from businesses from a range of sectors and geographies.

With the overarching aim of accelerating ambitious trade facilitation reforms, the core activities of the Alliance will include:

  • Building understanding of the benefits of trade facilitation within both the public and private sectors;

  • Establishing sustainable multi-stakeholder dialogues on trade facilitation;

  • Mobilizing public-private partnerships to drive change, engaging local businesses and associations;

  • Technical and financial assistance in support of capacity building; and

  • Benchmarking and evaluation based on established business metrics.

It is envisioned that the Alliance will support efforts in 12 to 15 developing countries on an annual rolling basis – while also working at global and regional levels to enhance stakeholder awareness of the importance of trade facilitation and of the role of public-private cooperation in implementing the TFA. To ensure synergy with the activities of other international programmes, the Alliance will actively engage with other international bodies, donors and associations.

With the full political endorsement of national governments, the Alliance’s in-country projects will leverage the expertise and resources of leading companies and international organizations – as well as providing a platform for local business communities to identify trade bottlenecks and to work collaboratively with governments to support effective reforms.

The Alliance’s trade facilitation indicators​ will provide a yardstick of country-level progress and create a competitive incentive for countries to implement trade facilitation reforms – making them more attractive for trade and investment and empowering their local business community.


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