supporting the implementation of the trade facilitation agreement expert group meeting on improving...
TRANSCRIPT
Supporting the implementation of the Trade Facilitation Agreement
Expert Group Meeting on Improving Transit Cooperation, Trade and Trade Facilitation
ITC’s integrated TF program
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Improving SMEs Competitiveness for exports
Improve efficiency of cross-border procedures
Enhance transparency and access to
information
Improve inter-agency coordination
and SME involvement
in PPD
Schedule commitments under WTO
TFA
Strengthen SME ability to cross borders
A holistic approach beyond TFA
Facilitating public-private dialogue in trade policy formulation
Collaborating with leading public and private TF agencies
Implementing TFA to promote and deepen regional integration
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ITC has already supported 42 countries
Tajikistan Mongolia
Mauritius Benin
Burkina Faso
Cote d'Ivoire
Guinea-Bissau
Mali NigerSenegal
Swaziland
Togo
Nigeria Gabon
Central African Republic TogoCabo Verde
Congo
DRC
Gambia
Chad Zimbabwe
Sierra Leone
Lesotho
Madagascar
Haiti
Jamaica
Nicaragua
Honduras
Dom. Rep
St Lucia
Grenada
Paraguay
Ecuador
Angola
Mozambique
Micronesia Marshall Islands Palau CamerounGuinea
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BuildingInternal
capacities
PerformingMarketSearch
Adaptingproduct
for export
Setting-up overseas
distribution
Securing cashflows
Export Competitiveness depends a lot on international trade procedures
Managing cross-border
operations
Collect, produce, transmit and process information and documents
Comply with border agencies requirements
Organize logistics from manufacturers premises to clients grounds
Breakdown of export costs
Logistics costs represent up to ~15% of product value
~63% of logistics costs consist in transport costs including border-crossing costs
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Border inefficiencies translate into direct and indirect costs impacting business competitiveness
Direct costs
Time and resources to manage export administration• Collect, produce, transmit and process required information and documents
Ind
irec
t co
sts
Increased operational costs• Delays translate into extra transport, insurance or warehouse costs
Increased working capital requirements• Inventories immobilized are carried out by the exporter (except for EXW sales)
Product deterioration• Delays can lead to the degradation of products and render them unfit for sale
Lost business opportunities• Direct: joining a punctual regional trade• Indirect: immobilized stock could have been sold to a local client
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SME are particularly vulnerable to these additional costs
On a relative basis, SMEs dedicate more HR to export than large business
Intermediate financing required to cover working capital needs is very expensive
SME are often classified as “high risk” operators by border agencies…
…and they can rarely join “ Authorized Economic Operator” schemes
SME cannot afford large logistics provider services who could speed up the border crossing process
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2 provisions are particularly important to facilitate transit flows
Freedom of transit
-Art. 11)
Border agency
cooperation-
Art.8
Measure descriptionImpact on
trade cost reduction
Facilitated, transparent and non-
discriminatory treatment offered
to the goods in transit passing
through the national territory
OECD Transit
formalities indicator
-2.3%
Coordinating and harmonizing
border-crossing procedures both
at the national level and for the
countries sharing the border to
reduce cost and delays
OECD Transit
agreements and
cooperation indicator
-1.9%
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3 salient features of the ITC Trade facilitation program
Promotes the business perspective with a dedicated focus on SMEs
Promotes stakeholder collaboration at the national and donor levels
Promotes regional approaches to the implementation of TF reforms
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ITC promotes stakeholders coordination and collaboration at all levels
Between governments and border regulatory agencies
Between border regulatory agencies and businesses
• Establishing National trade facilitation committees
• Strengthening of public-private dialogue mechanisms
Between donors and technical partners
• Network of partnership with key public and private stakeholders involved in the implementation of the TFA
ITC approaches to enhance coordination and collaboration
Key areas for improved coordination and cooperation
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Key figures of ITC interventions
Business interviewed in ITC Non-Tariff Measures surveys
Policy makers trained on the Trade Facilitation Agreement
~10,000
Businesses involved in the TFA categorization process~200
~1,000
42 Countries assisted in their TFA scheduling of commitments
19 Countries that notified their category A measures
4 Countries that ratified the protocol of amendment
Raising awareness and assessing countries’ compliance with transit provisions of the TFA
LLDCs compliance
ITC supported 12 landlocked countries in assessing needs to comply with transit-related articles of TFA
Coastal countries
compliance
ITC supported 17 coastal countries that are part of transit corridors in assessing compliance with transit-related articles of TFA
Awareness raising
ITC co-organized a regional workshop on transit with the World Customs Organization (Uganda)
ITC organized a session on Private Sector perspective in WB workshop for Regional Transit in Mercosur (Paraguay)
Adopting regional approach to TFA facilitates transit flows because…
1. Harmonization of practices and regulations along transit corridors creates a more transparent, predictable and conducive environment
2. Economy of scale and sharing of resources can be best achieved when countries sharing a same corridor are coordinated
3. In any transit corridor the overall performance is only as good as the weakest link
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ITC promotes TF implementation in ....On-going initiatives to promote a coordinated approach to trade facilitation
reforms in regional economic communities
Africa LAC Asia-Pacific Other
CAUCA
SICA
OECS
CARICOM
UEMOA
CEMAC
CEAAC
COMESA
CEDEAO
PIFS
MTEC
ASEAN
CEFTA
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ITC partnership network for TF
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ITC does ‘SME-friendly’ TFA implementation
Authorized Operators
Enquiry points
Electronic payment
Design qualification criteria that can be met by SMEsMost existing AEO schemes automatically exclude smaller businesses
Build capacities of SME to apply to the AO schemesThrough dedicated awareness raising and training events
Ensure services beyond capital/port city and in local languages• Implementation of EP at border posts (including free terminals connected
to the trade facilitation portal)• EP Service in Swahili, not just English, at border posts in Tanzania
Identify and implement payment methods which SMEs can useE.g. mobile money in Zimbabwe
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1. Trade-related costs must be reducedEspecially in LLDCs where costs are significantly higher than in the rest of the world
2. TF addresses border inefficiencies to reduce costsFreedom of Transit (Art.11) and border agency cooperation (Art.8) are 2 provisions to specifically support LLDCs achieving the objective of reducing costs
3. TF is closely-linked to SME success in value chainsSMEs are particularly vulnerable to cumbersome cross-border processes
4. TF is most effective when stakeholders coordinate and work togetherGovernment, SMEs, TSIs, TNCs, and development partners
Concluding Thoughts
ITC’s integrated TF program
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Improving SMEs Competitiveness for exports
Improve efficiency of cross-border procedures
Enhance transparency and access to
information
Improve inter-agency coordination
and SME involvement
in PPD
Schedule commitments under WTO
TFA
Strengthen SME ability to cross borders
A holistic approach beyond TFA
Facilitating public-private dialogue in trade policy formulation
Collaborating with leading public and private TF agencies
Implementing TFA to promote and deepen regional integration
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We help to facilitate trade
Mohammad Saeed
Senior Trade Facilitation Advisor
Geneva
+41 7 99 52 15 77
Puvan Selvanathan
Head, ITC Office to the UN
New York
+1 917 515 9959