Public and Private Sector Leaders Exchange Best Practices to Implement Trade Facilitation Agreement

Public and private sector leaders on 12 December exchanged insights on implementing the WTO’s landmark Trade Facilitation Agreement (TFA) to fully reap the benefits of swifter and less costly trade at the border. Speakers at the event, entitled “Trade Facilitation on Track”, highlighted the importance of local ownership of reform plans, multi-stakeholder cooperation, and capacity building to successfully implement the Agreement.

"The implementation of the TFA will bring significant benefits to all WTO members, with developing and least-developed members having the most to gain," WTO Deputy Director-General Yi Xiaozhun said at the event organized by the WTO Trade Facilitation Agreement Facility (TFAF) in cooperation with its partner organizations.

DDG Yi continued: "However, members will only reap these benefits through the full implementation of the Agreement. For this reason, trade facilitation needs to remain a priority for the WTO and all members."

The TFA entered into force on 22 February 2017 following its ratification by two-thirds of the WTO membership. Since the last meeting of the WTO Trade Facilitation Committee on 3 November, four more members have ratified the Agreement bringing the total to 126 out of 164 members. These four members are Antigua and Barbuda, South Africa, Indonesia and Israel.

The full implementation of the TFA is estimated to reduce global trade costs by an average of 14.3%, with African countries and least-developed countries (LDCs) forecast to enjoy the biggest average reduction in trade costs. Furthermore, the TFA is forecast to add up to 2.7% a year to world export growth and more than 0.5% a year to world GDP growth over the 2015-30 horizon.

"Many members will face challenges in implementing the Agreement. The TFA has recognized this and has built-in provisions," DDG Yi said. The TFA is the first WTO agreement in which these WTO members can determine their own implementation schedules and in which progress in implementation is explicitly linked to technical and financial capacity. In addition, the Agreement states that assistance and support should be provided to help them achieve that capacity.

"The tracks are laid, the train is there and donors are ready with the fuel. All conditions are there to allow members to move forward," DDG Yi said.

The other speakers went on to share experiences about implementation of the Agreement in their respective countries. The public and private sectors must work together, speakers said. Furthermore, a change in mindset among authorities towards favouring easier flow of goods across borders and full ownership of reform plans have been vital for ensuring successful implementation, they said. Officials will also need to make room for continued transitions as security technologies and e-commerce demands evolve.

Costa Rica Vice Minister for Foreign Trade, Jhon Fonseca, said that his country's National Trade Facilitation Committee (NTFC), for example, is a public-private team with various technical and policy making expertise. He added that it was important to constantly improve the organization to make sure it adapts to evolving needs.

Patricia Francis, chair of Jamaica's NTFC, said that her government's goal to turn the country into a logistics hub greatly helped to ease the implementation of the TFA as there was already an existing ambition to improve cross border flows. Automating trade procedures was not enough, she said, as there needed to be a behavioural change as well. Daniel Godinho, director for corporate strategy at Brazilian engine manufacturer WEG, shared this sentiment, saying: "At the end of the day trade facilitation means a change of culture."

Chris Folayan, co-founder and co-CEO of online platform MallforAfrica, meanwhile noted the changing demands on trade facilitation and logistics posed by online consumers who require fast deliveries and electronic payments.

Additionally, speakers form the Netherlands, Kenya, Zambia and Uganda shared their experiences on the implementation of certain provisions of the Agreement.

Overall, the consensus of the speakers emphasized the need for border collaboration and coordination, political will, making use of technology, the establishment of baselines to measure implementation success, and publication of information in order to enable traders to work with regulatory agencies.

Sheri Rosenow, Counsellor for the TFAF, meanwhile shared information on implementation assistance available for developing and LDC members.

TFAF was created at the request of developing and least-developed countries to help ensure that they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all WTO members.