TFAF at MC11: Public and private sector leaders exchange best practices to implement Trade Facilitation Agreement
Outcome & Overview
On 12 December, public and private sector leaders discussed the implementation of the WTO’s landmark Trade Facilitation Agreement (TFA) to enable 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 the successful implementation of the Agreement. The event was organized by the WTO Trade Facilitation Agreement Facility (TFAF) in cooperation with its partner organizations
WTO Deputy Director-General Yi Xiaozhun stated- "The implementation of the TFA will bring significant benefits to all WTO members, with developing and least-developed members having the most to gain," .
"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 upon being ratified by two-thirds of the WTO membership. Since the last meeting of the WTO Trade Facilitation Committee on 3 November, four more members (Antigua and Barbuda, South Africa, Indonesia and Israel) have ratified the Agreement bringing the total to 126 out of 164 members.
The full implementation of the Agreement 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. In addition, 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.
According to DDG Yi, "many members will face challenges in implementing the Agreement. The TFA has recognized this and has built-in provisions"
The TFA is the first WTO agreement in which participating WTO members can determine their own implementation schedules and in which progress in implementation is explicitly linked to technical and financial capacity. In addition, assistance and support would be provided to members who need help in achieving 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.
Other speakers went on to share their own experiences with regards to implementation in their own countries. The general consensus among the speakers was that public and private sectors must work together. They also applauded a change in mindset among authorities towards favouring easier flow of goods across borders and full ownership of reform plans. Finally, they consented that officials will also need to make room for continued transitions as security technologies and e-commerce demands evolve.
Jhon Fonseca, Costa Rica Vice Minister for Foreign Trade, 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.
The chair of Jamaica's NTFC, Patricia Francis, in turn 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. She noted that simply automating trade procedures was not enough as behavioural changes were needed as well. Daniel Godinho, director for corporate strategy at Brazilian engine manufacturer WEG, summed up by 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.
Other countries to share their experiences of implementation were the Netherlands, Kenya, Zambia and Uganda.
Overall, the speakers emphasized the need for border collaboration and coordination strengthened by political will, the 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 in a transparent manner.
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.