Trade Forum Features

A trade facilitation agreement to increase LDC exports

12 December 2013
ITC News
ITC’s experts explain how the agency assists developing countries and least developed countries in making the most of the new deal on trade facilitation to enhance their export competitiveness.

Trade facilitation has important implications for a country’s export competitiveness. The benefits of 'fluid borders' are particularly critical in today’s environment in which increased global production sharing within value chains means that goods cross borders several times during the production process.

Competitive exporting requires efficient access to imported raw materials, intermediate goods and capital goods. For landlocked developing countries (LLDCs), the need for effective trade facilitation is even greater because inputs are also dependent on the efficiency of the transit mechanisms in neighbouring countries. Trade facilitation measures can be used to reduce costs linked to cross-border trade, and many of these are being addressed in multilateral negotiations on a Trade Facilitation Agreement under the auspices of the World Trade Organization (WTO).

However, many developing countries, particularly least developed countries (LDCs), will need assistance to implement many of the measures and take advantage of the opportunity this Agreement would offer to grow their exports.

The International Trade Centre (ITC) already provides technical assistance to developing countries and their small and medium-sized enterprises (SMEs) on trade facilitation on issues ranging from supply logistics and transit for landlocked countries to enabling SMEs to comply with border management requirements and generating awareness of WTO rules.

ITC has extensive experience working with the private sector, especially aiding SMEs in understanding WTO and other trade agreements and in taking the appropriate steps to benefit from new rules. ITC has also worked closely with government officials by facilitating dialogue with the private sector to assist governments in amending laws and regulations relating to trade agreements in order to ensure that new rules are implemented in a way which enhances business competitiveness.

ITC’s non-tariff measure surveys and feedback from exporters and trade support networks show that SMEs need better services to navigate at-the-border and behind-the-border barriers when moving their goods through regional and international supply chains. ITC has developed a full range of support services in mainstreaming inclusiveness and sustainability into trade promotion and export development by using trade facilitation measures to enable SMEs to connect with global value chains.

ITC’s role in the implementation of transparency provisions

The Trade Facilitation Agreement includes commitments relating to the publication and transparency of trade regulations and customs procedures. To assist LDCs in meeting this commitment, ITC would make SMEs aware of the new rules and their benefits, what information is available and how it can be accessed.

ITC would provide advisory services and training for government officials on what information needs to be made available and how to deal with technical and legal issues, such as confidential information. It would also facilitate dialogue between the public and private sectors to give SMEs an opportunity to explain what information they need to facilitate exports and how it should be presented to them.

ITC would also assist LDCs in constituting and operationalizing public-private committees to monitor the implementation of laws and related practices and procedures at the border. These committees would address appropriate remedial measures and would prepare targeted business guides on rules and procedures which affect importers and exporters in developing countries.

Making WTO’s Trade Facilitation Agreement work for regional integration

The Trade Facilitation Agreement contains a number of provisions to facilitate 'transit' trade, such as new rules relating to transit formalities, documentation requirements and the treatment of traffic in transit. These provisions are particularly important for LLDCs. For example, 16 out of 54 countries in Africa are LLDCs, and they are looking to address some of the economic challenges they face through tighter regional integration. Indeed, regional integration is at the top of Africa’s trade agenda, and improved rules on transit in WTO’s Trade Facilitation Agreement can facilitate deeper integration. ITC will use this opportunity to spur the implementation of the new transit rules in supporting regional integration projects.

In addition, ITC’s trade facilitation advisory services promote SME and private sector compliance with trade facilitation procedures and formalities. Advisory services are delivered alongside customized training, public-private dialogues and networking activities. Targeted beneficiaries include exporters’ associations, licensing authorities, trade logistics service providers, customs authorities, and selected trade approval agencies and policymakers.