Trade obstacle alert helps traders in West Africa save time and money
For businesses in developing countries, one key barrier to exporting is meeting the health and safety standards or technical product regulations of prospective foreign markets. Another challenge is to obtain the certification that assures authorities in the importing countries that traded merchandise is indeed compliant with the relevant requirements.
Businesses surveyed by ITC about non-tariff measures routinely report that sanitary and phytosanitary measures and technical barriers to trade are among the main trade barriers they grapple with. Often it is not the content of a given regulation that is the main bottleneck to trade: it is the procedures associated with proving compliance. These procedural obstacles are frequently domestic in nature and can be solved unilaterally at home – provided that local authorities know about them.
In West Africa, where governments are working to promote trade among neighbouring countries and with the rest of the world, ITC surveys indicate that 75% of businesses face obstacles to exporting or importing because of trade-related regulations or procedures within the region.
As part of its comprehensive support to intraregional trade integration within the eight-member West African Economic and Monetary Union (known as UEMOA, comprised of Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo), ITC worked with governments and regional authorities to set up a region-wide Trade Obstacles Alert Mechanism.
The mechanism is an online service that allows exporters and importers that encounter obstacles when importing or exporting merchandise to report them in real time to the national and regional authorities. In tandem with the internet-based platform, ITC helped set up a network of these agencies to understand, address and if possible eliminate the obstacles reported by companies.
The system works through national focal points, which receive traders’ reports, direct them to relevant agencies and share information on the action taken while protecting business confidentiality. In addition to reporting trade obstacles to the responsible authorities, users can receive email alerts about problems faced by other businesses in sectors of interest. For companies, trade and investment support institutions and policymakers, the obstacle reports submitted provide a snapshot of the practical challenges faced by trade operators in the region.
Since the launch of the UEMOA Trade Obstacles Alert Mechanism in March 2018, more than 40 obstacles have been reported by businesses through the web-based platform.
Among those reporting obstacles is Yaovi Timidiba, an exporter from Togo, who complained about the lack of laboratories to test his company’s cocoa beans for pesticide residue so they could be exported to Germany. For want of local testing facilities, he usually sends samples to Switzerland at considerable expense in terms of time and money, making his product less competitive on international markets.
Timidiba reported the problem to the Chamber of Commerce and Industry of Togo, the national focal point for the mechanism, in August 2018. Through the system, the Togolese Ministry of Agriculture informed him about a laboratory in nearby Senegal that carries out the same tests and at the same price, but much closer. Timidiba will in the upcoming export season use the regional testing laboratory, saving on time and shipping expenses.He reported a separate problem had also been resolved through the Trade Obstacles Alert Mechanism: he now receives paperwork to obtain certificates of origin on time, which means he no longer has to pay penalties for missing export documentation when exporting sesame to China.
Ten of the problems reported through the mechanism have been resolved, while the rest are being addressed by the national network of public and private agencies associated with the Trade Obstacles Alert Mechanism.
Within each of the eight UEMOA members, the mechanism has served to reinforce collaboration among agencies on improving the business environment. As a complement to the national platforms in each UEMOA member state, a regional interface developed for the UEMOA Commission is enabling it to track and monitor intra regional trade barriers, helping fulfil its mandate to enhance regional integration.
In some countries, the national network for the Trade Obstacles Alert Mechanism is embedded within national trade facilitation committees, which are public-private platforms with a mandate to streamline trade procedures. This allows border obstacles faced by businesses to feed directly into the policy reform process.
The Trade Obstacles Alert Mechanism is now being extended beyond UEMOA countries to the rest of the Economic Community of West African States (ECOWAS). In 2019, it will be implemented in seven additional countries, and extended to trade barriers in services sectors. As the agreement creating the African Continental Free Trade Area takes effect, the mechanism will serve as a useful tool to help businesses make full use of the resulting market opportunities.