Aid for Trade at a Glance 2015: "Reducing Trade Costs for Inclusive, Sustainable Growth“

CHAPTER 4: IMPLEMENTING THE TRADE FACILITATION 

AGREEMENTWTO28 May 2015

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CHAPTER 4 OUTLINE

Introduction The TF AgreementTF MeasuresImplementation Flexibilities TreatmentImplementation Needs and ChallengesChallenging measuresUnderlying reasonsEngaging the Business CommunityImplementation SupportMonitoring Implementation Progress to DateConclusion

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THE TRADE FACILITATION AGREEMENT

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AGREEMENT ON TRADE FACILITATION

• Greater transparency• Improved governance• Modernized border

procedures• Transit

BOX 2: TRADE FACILITATION AGREEMENT“TECHNICAL MEASURES”

Article1 Publication & Availability of Information2 Comment and Consultations3 Advance Rulings4 Procedures for Appeal or Review5 Measures to Enhance Impartiality, Non-

Discrimination & Transparency6 Disciplines on Fees and Charges7 Release and Clearance of Goods8 Border Agency Cooperation9 Movement under Customs Control10 Import, Export &Transit Formalities 11 Freedom of transit 12 Customs Cooperation

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SPECIAL AND DIFFERENTIAL TREATMENT

Category A: implemented by time Agreement enters into force

Category B: Entry into force + (X) time(indicative dates of implementation)

Category C: need extra time & TACB

(category notifications due at EIFone year later for LDCs)

IMPLEMENTATION NEEDS AND CHALLENGES

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DATA SOURCES2015 Monitoring Exercise:

Questionnaires: 62 responses from Developing and LDC Members and 22 (out of 37) responses from Donors

Case Stories: 45 from Latin America and the Caribbean, Africa, Southeast Asia, Central Asia

Category A Notifications: 54 received

Needs Assessments:# Needs AssessmentsConducted

Developing Countries (DC)

LDC Landlocked (also counted in DC LDC 

column)

2007‐2010

94 60 34 18

2013‐2014 88 39 29 13

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NEEDS ASSESSMENTS

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TABLE 2: CHALLENGING MEASURES

WTO Member Self-Assessment Priorities

Category A Least Notified Measures

Developing and LDC Questionnaire (most

difficult to implement –needs TACB focus)

Donor questionnaire-(Needs most focus for

TACB)

Single-Window

Test procedures

Risk management

Authorized operators

National Committee on Trade Facilitation

Publication and availability of information

Border agency co-operation

Advance rulings

Single window

Authorized operators

Enhanced controls

Test procedures

Average release times

Enquiry Points

Border agency cooperation

Advance rulings

Border agency co-operation

Formalities connected with import, export, transit (includes Single Window)

Publication and availability of information

Advance rulings

Release and clearance of goods (includes risk management and authorized operators)

Customs cooperation

Formalities (includes Single Window)

Border agency co-operation

Customs co-operationRelease and clearance of goods (including risk management and Authorized Operators)the Agreement as a whole

Other measures to enhance impartiality…

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IMPLEMENTATION CHALLANGES

1. Coordination of Border Authorities

2. Information/Communication Technology (ICT)

3. Policy/Legal Framework

4. Procedures

5. Equipment and Infrastructure

6. Human Resources/Training

7. Engaging the Business Community

8. Other issues

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CASE STUDIESCountry/Region

Type of Project Cost of Project

Support Provided By

Benefits

FYR Macedonia (2013)

Customs reform (SPS/TBT risk-based inspections)

USD 50,000-200,000

World Bank Group and European Commission

Agencies have reduced the percentage of goods sampled by 40%, saving an approximate $1,082,484 for Macedonian traders

Rwanda (2012/2013)

Electronic Single Window

USD 1-5 million

Implementation by TradeMark East Africa with funding from DFID

Time to clear goods has reduced to 23 hours from 36 hours, and declaration costs have fallen to $243 from $350 per declaration (Estimated savings is over $2 million annually)

Central America (2011)

Electronic Customs Exchange

USD 1-5 million

SIECA and European Commission

Bilateral trade between Guatemala and El Salvador has generated a total savings of USD 11.7 million

Kenya (2014)

National Single Window

USD 1-5 million

World Bank through East African Trade and Transportation Facilitation

Annual savings for the first three years is expected to range between USD 150-250 million, and annual savings is expected to range between USD 300-450 million after the first three years

Uganda (2011)

Authority Customs Business Systems Enhancement

USD 5-10 million

TradeMark East Africa CBSEP has generated USD 373 million per year in business savings (USD 200 per truck per day saved on transport costs)

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CASE STUDIES

Top Outcomes• Reduced customs

clearance times• Reduced other border

agency clearance times• Reduced costs of

customs clearance

Top Impacts• Increased foreign

investment• Export market

diversification• Increased domestic

investment• Increase in consumer

welfare• Increase in employment

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IMPLEMENTATION SUPPORTWTO TFA FACILITY

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Ensure developing & LDC countries acquire capacity to take on commitments under the agreement

Encourage coordination among assistance providers

Complement existing efforts, enhance their effectiveness

Provide flow of information between donors and recipients

Where no other funds available, provide seed money or resources for implementation

FACILITY

A,B,C category support

National needs

assessments

Thematic workshops

National and regional

workshops

E-Learning programs & training materials

Ratification, scheduling, and implementation

support/ assistance

TFA assistance tracking

Regional consultations

Matchmaking activities

Partner outreach

In-country consultations

FACILITY OUTREACHACTIVITIES

PromotionCoordination

and Coherence

Organize Annual WTO

TF Roundtable

Participation in external

events

Publication of TF support activities on

the TFAF website

Regular meetings

with donors & Annex D+

TFAF WEBSITE: http://www.TFAfacility.org/

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IMPLEMENTATION SUPPORT

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DONOR SUPPORT

Trade Facilitation commitments, 2002-2013

Source: OECD-DAC aid activity database (CRS)17

TRADE FACILITATION DISBURSEMENTS, 2002-2013

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0

100

200

300

400

500

600

2006 2007 2008 2009 2010 2011 2012 2013

USD million(2012 constant)

Source: OECD Creditor Reporting System

FIGURE 3: AID FOR TRADE FACILITATION COMMITMENTS BY REGION 2002-2013

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Source: OECD Creditor Reporting System

TABLE 3: TRADE FACILITATION BY DONORS 2002-2005 AND 2010-2013

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2002‐05 avg.

2010 2011 2012 2013

United States 6 7 1 12 260

EU Institutions 13 102 171 43 131

World Bank 11 89 55 258 130

United Kingdom 143 5 14 36

Japan 25 22 25 49 31

Canada 1 5 12 6 21

AsDB 9 25 18

Sweden 0 11 4 18 10

Norway 0 1 4 4 8

Germany 0 2 2 0 4Total Trade Facilitation 80 412 361 466 668

Top 10 share in total 83.5% 93.2% 77.1% 92.0% 97.0%

Total bilateral 47 214 133 138 385Total 

multilateral 33 197 228 328 283

Source: OECD Creditor Reporting System

EXPECTED DIFFICULTIES IN SECURING IMPLEMENTATION SUPPORT

 

Options  Response Percent 

Response Count 

Problems accessing external funds 59.7% 37Lack of information on funding opportunities 58.1% 36Differing priorities of in‐country donors 51.6% 32National coordination and demonstration of political will   41.9% 26Accessing the necessary expertise 32.3% 20Accessing global programmes 32.3% 20Problems to quantify TFA implementation needs 30.6% 19Integrating TFA implementation into on‐going programmes  30.6% 19Accessing regional programmes 29.0% 18Ensuring TFA implementation is a priority in national development planning documents  27.4%  17 

Problems in formulating requests 24.2% 15Ensuring coherence with past programmes 24.2% 15Programming cycles 16.1% 10None 4.8% 3Other (please specify) 3.2% 2

answered question 62

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PROCEDURES & MECHANISMS

Guiding Principles:

Assistance should be provided on mutually agreed terms

Targeted assistance should help LDCs build sustainable capacity

Assistance should take into account overall development framework, as well as promote regional integration and coordination

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CONCLUSION

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CONCLUSIONS

Benefits of TFA implementationCost reductions for tradersIncreased revenue for governments

Challenges aheadCoherence and time

RecommendationsAlignment with national prioritiesPrivate sector co-operationParticipation of border agenciesDonor support

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