supporting the implementation of the trade facilitation agreement expert group meeting on improving...

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

saeed@intracen.org

+41 7 99 52 15 77

Puvan Selvanathan

Head, ITC Office to the UN

New York

selvanathan@intracen.org

+1 917 515 9959