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Trade Facilitation

Last month I reported in this Newsletter that EFA had taken part in the annual Africa Trade and Customs Summit on 7-9 Nov. The session I moderated was about how to encourage SMEs to use ecommerce to trade cross frontiers. The usual suspects were identified – slow and rapacious customs services, bad transport infrastructure, issues of cross-border payments, conflicting regulation, etc. These challenges came up time and again during the Summit. The question then arises, what about the WTO’s Trade Facilitation Agreement (TFA) which is specifically aimed at assisting countries make international trade faster and cheaper by simplifying, standardizing, harmonizing and modernizing international cross-border trade? TFA measures are important as they address procedural obstacles to trade, such as those related to lack of transparency and duplication of documentation requirements: they therefore reduce costs and improve efficiency. Trade facilitation brings benefits by allowing businesses improved access to foreign production inputs and supports greater participation in global value chains.

TFA is also claimed to improve a country’s trade competitiveness. The effectiveness of border agencies trade facilitation reforms help advance other development goals such as strengthening governance and formalizing informal sectors. These advantages are very appealing. However, as WTO admits, implementing TFA provisions at a national level in Africa has not been easy. Currently, various international organizations have developed projects to support the developing world in executing TF measures. One new initiative is the Trade Facilitation Agreement Facility Grant Programme which aims to make applying the TFA more appealing to African countries. Will it succeed?  The 2023 African Trade and Customs Summit will be held in Kigali in August. I look forward to learning if the TFA is reducing customs pinch-points then.

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Alastair Tempest

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