Economic benefits of the TFA, implementation status, and private sector involvement

FIATA World Congress, 5 October, 2016

Ezequiel M. Guicovsky Lizarraga Senior Officer, Business Development Trade Facilitation and Policy for Business Division of Business and Institutional Support

Key topics addressed

TFA impact on trade costs, trade flows and GDP

growth

TFA impact on export diversification

TFA impact on revenue collection

TFA impact on SMEs and consumers

Status of implementation in the Americas

Key measures

Role of the Private sector in implementation

Most studies estimate that implementation of the TFA will lead to export and GDP growth…

3

Export growth

GDP growth

WTO ICC OECD Other1

+750 to 1,000 billions $

+0.35 to 0.55 % growth

1,000 billions $

+960 billions $

+40 billions $

+0.50 % growth

1,000 to 1,500 billions $ NA

1.Ferrantino and Tsigas (2013), Hufbauer and Schott (2013); World Trade Report 2015

Implementation of the TFA will reduce trade costs in all regions

4

11%

12%

14%

14%

14%

16%

17%

North America

Europe

Asia

Middle East

Commonwealth

LAC

Africa

Estimated reductions in ad valorem tariff equivalent trade costs due to TFA implementation (%)

Source: WTO Secretariat calculations, WTO World Trade Report 2015

And for countries at all development stages, with a premium for LDCs

5

11%

13%

15%

17%

Developed

G-20 developing

Other developing

Least-developed

Estimated reductions in ad valorem tariff equivalent trade costs due to FTA implementation by level of development (%)

…for developed as well as developing countries in all possible scenarios

6

10%

7%

9%

13%

10%

9%

11%

13%

10%

12%

20%

35%

Developed

G-20 developing

Other developing

Least-developed

FullLiberalConservative

Estimated increase in export under various TFA scenarios by level of development (billions $ increase)

WTO Secretariat calculations, WTO World Trade Report 2015

Trade facilitation has a larger effect than removing tariffs

7

TF reforms could increase GDP up to 6x more than removing tariffs

2.6

1.5

0.4

AmbitiousTF scenario

Modest TFscenario

Tariffsremoval

Increase in GDP (trillion US$, %)

x6

x4

4.7% 2.6%

0.7%

1.6

1 1.1

AmbitiousTF scenario

Modest TFscenario

Tariffsremoval

Increase in trade (trillion US$, %)

+40%

14.5%

9.4% 10.1%

TF reforms could increase trade up to 40% more than removing tariffs

Source: Enabling Trade Report 2013, World Economic Forum

Intra-Regional Trade, Total Exports, Exports to USA and Canada

Exports Intra-

Regional

Total Exports to the World

Reported figures from ITC Trade Map – Case Latin-America

In 2013: 229 billion U$ 229,255,694,000 U$ In 2014: 202 billion U$ 202,338,115,000 U$

In 2013: 1117 billion U$ (1,117,096,784,000 U$) In 2014: 1082 billion U$ (1,082,508,912,000 U$)

Total Exports to

Canada

In 2013: 22.9 billion U$ (22,995,056,000 U$) In 2014: 22.8 billion U$ (22,899,783,000 U$)

Total Exports to

USA

In 2013: 411,5 billion U$ (411,592,411,000 U$) In 2014: 457,4 billion U$ (457,459,988,000 U$)

Impact by Measure

9

Full implementation scenario:

• 14.1% of total costs for low income countries,

• 15.1% for lower middle income countries, and

• 12.9% for upper middle income countries.

Limited scenario: LICs the potential trade cost

reduction reaches 11.7%

Potential impact of the TFA according to the OECD

Examples my group of measures: - 2.4% for (h) enhancement of procedures, - 1.9% for (g) Automation, and - 1.2% for (c) Advance rulings

Most studies estimate that implementation of the TFA will lead to export and GDP growth…

What are the costs of cross-border inefficiencies?

11

…20 lowest performing countries1? • e.g. Kenya, Brazil, Sudan…

…20 best performing countries? • e.g. Singapore, Malaysia, Israel…

Cost to Import ($)

Cost to Export ($)

Trade Cost Quiz: how much does it cost to import and export a 20 foot container from…

? ?

? ?

Cost to complete every official procedure in the country (excl. international transport) • Exports: from packing the goods into the container at the warehouse to their departure from

the port of exit (duties and taxes are excluded) • Imports: from the vessel’s arrival at the port of entry to the cargo’s delivery at the

warehouse (duties and taxes are excluded)

1. Excluding landlocked countries 2. Source: Doing Business 2015

2,900$ 2,300$

610$ 580$

x5 x4

Border inefficiencies translate into direct and indirect costs

Direct costs

Time and resources invested in managing export administrative activities • Collect, produce, transmit and process required information and documents

Indirect costs

Increased operational costs • Delays translate into extra transport, insurance or warehouse costs

Increased working capital requirements • Inventories immobilized are carried out by the exporter (except for EXW sales)

Product deterioration • Delays can lead to the degradation of products and render them unfit for sale

Lost business opportunities • Direct: joining a punctual regional trade • Indirect: immobilized stock could have been sold to a local client

Cross-border procedures identified as key barriers to trade in the Caribbean

Top barriers to trade – Case in the Caribbean

Rules of origin requirements abroadInappropriate telecommunications infrastructure

Technical requirements and standards abroadCrime and theft

Domestic technical requirements and standardsCost / delays caused by domestic transportation

Inappropriate production technology and skillsDifficulties in meeting quality/quantity requirements

Cost / delays caused by international transportationIdentifying potential markets and buyers

Access to trade financeAccess to imported inputs at competitive prices

Corruption at the borderTariffs

Burdensome import procedures

Source: WEF Enabling trade report, 2015

SME are particularly vulnerable to these additional costs

On a relative basis, SME dedicate more HR to export/import than large business

Intermediate financing required to cover working capital and inventory needs is very expensive SMEs often export small volumes of low value-added product making it harder to reach the “breakeven” point

!

!

!

TFA promotes SMEs exports as they are particularly vulnerable to border inefficiencies

SMEs cannot afford quality logistics service providers who could speed up the border crossing process SME are often classified as “High risk” operators by border agencies…

…and they rarely can join “ Authorized Economic Operator” scheme

!

!

!

Time to export

COUNTING THE TIME AND COST TO EXPORT

Cost to export

0 50 100 150 200 250

OECD high income

Europe & Central Asia

East Asia & Pacific

South Asia

Middle East & North Africa

Latin America & Caribbean

Sub-Saharan Africa

Time to export: Border compliance (hours)

Time to export: Documentary compliance (hours)

0 200 400 600 800 1000

OECD high income

Europe & Central Asia

South Asia

East Asia & Pacific

Latin America & Caribbean

Middle East & North Africa

Sub-Saharan Africa

Cost to export: Border compliance (USD)

Cost to export: Documentary compliance (USD)

Time to import

COUNTING THE COST TO IMPORT

Cost to import

0 50 100 150 200 250 300

OECD high income

Europe & Central Asia

East Asia & Pacific

Latin America & Caribbean

South Asia

Middle East & North Africa

Sub-Saharan Africa

Time to import: Border compliance (hours)

Time to import: Documentary compliance (hours)

0 200 400 600 800 10001200

OECD high income

Europe & Central Asia

East Asia & Pacific

Latin America & Caribbean

Middle East & North Africa

South Asia

Sub-Saharan Africa

Cost to import: Border compliance (USD)

Cost to import: Documentary compliance (USD)

Logistics costs are comparatively high in LAC and average 25% of product value

18

1. Source: UNECA 2004

Logistics cost as % of total product value by regional groupings

8.5% 9.0% 9.5%

18.0%

23.0% 26.0% 27.0%

32.0%

Singapore OECD USA Chile Colombia Brazil Argentina Peru

Each day saved in shipping time is worth 1% of product value1 • Time delays reduce trade flows more significantly than trade tariffs

TIME IS MONEY...IN PARTICULAR FOR GVCs

Lack of predictability increases businesses operational costs E.g. need for larger inventory to mitigate supply chain risks

Time-sensitive products are even more affected by delays Perishable: risks of product deterioration Just-in-time: high inventory costs and lost business opportunities

1 For manufactured products

Export diversification

Border inefficiencies limit business ability to integrate into global value chain

21

Economy is characterized by global value chains

Inefficient cross-border procedures impact business competitiveness

Production processes are being increasingly fragmented • Ex. Barbie doll is produced in 5

different countries (Japan, Germany, Korea, USA and China)

30% of world trade is realized between subsidiaries of multinational companies

30% to 60% of G20 exports are intermediate products

Companies need to import and export efficiently and at minimal cost to be able to integrate successfully in global value chain Every day saved in the shipment process translate into 0.8% ad-valorem cost reduction1

Doing Business figures are a key decision criteria for MNC investments abroad • Ex. fertilizer blending unit in Western

Africa

1. For manufactured products

TFA implementation leads to diversification of exported products and export destinations

22

10%

12%

20%

36%

Developed

G-20developing

Otherdeveloping

Least-developed

Increases in # of products by destination (% change)

Increases in # of destinations by product (% change)

19%

19%

33%

59%

Developed

G-20developing

Otherdeveloping

Least-developed

Source: WTO Secretariat calculations, WTO World Trade Report 2015

TRADE COSTS ARE A KEY DECISION CRITERION USED BY MNCs WHEN RELOCATING IN GVCs

3%

3%

3%

5%

5%

6%

6%

9%

9%

25%

25%

28%

29%

36%

50%

Security concerns

Ownership restrictions

Labour practices

Visa requirements

Meeting deadlines

Access to finance

Labour skills

Inadequate ICT networks

Power supply

Import duties

Meeting standards

Business environment

Licensing requirements

Customs procedures

Transport costs &…

Private view on the main barriers in connecting firms to value chains (% answers)

Source: OECD/WTO Questionnaire 2013

THE TFA WOULD NOT ADDRESS ALL YOUR PROBLEMS

The TFA has not been concluded to do the following:

It will not improve the logistics infrastructure

It does not address commercial, financial and logistics

procedures

It does not address too stringent trade regulations

The TFA will reduce the time and cost for collecting, submitting and processing the information and documentation associated with cross-border transactions

1

2

3

SUMMARIZING: WHAT THE TFA EXPECTS TO ACHIEVE…

Impact on international

trade

50% reduction in trade delays 15% reduction in trade costs 1 trillion US$ increase in merchandise exports per

annum 15% increase in # of product by destination 20% increase in # of destination by product

Impact on the business

environment

500 billions US$ GDP growth

Attracting more foreign direct investment

Greater participation of SMEs in trade

Reduction in trade-related corruption

Better collection of government revenues

TFA could bring benefits to the poorest

Trade costs are passed on to final consumers

In LDCs households rely strongly on imports to satisfy their basic needs • Trade cost reduction could

directly impact their purchasing power

Perishable goods are the main export product of the poorest

By reducing cross-border delays, the TFA could allow rural communities to export their products more easily

Revenue collection

Implementation of the TFA increases government revenue in 3 ways

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Trade Flows

Compliance

Fraud and corruption

TFA reforms have a potential to increase trade flows and as a result, increase the tax base and revenue collection

By simplifying procedures, TFA reforms encourage compliance, reduce informal trade and increase likelihood of duties being paid

TFA reforms should improve revenue collection by better detection of customs fraud and corruption

Border inefficiencies lead to revenue losses

1. Moise and Sorescu 2013, OECD

Understatement of customs value • Notably due to weak detection mechanisms and insufficient sanctions • In Cambodia, comparison between ship manifest and declaration

suggest that only 25% of the goods shipped are declared to customs

Smuggling of goods • Because of the complexity of formalities, it becomes financially rewarding

to evade customs • e.g. In Georgia in 2000, “shadow” imports accounted from 30% to 70% of

domestic demand

Diversion of revenues • Into pockets of corrupt officials

Studies suggest that inefficient border procedures lead to revenue losses = 5% of GDP1

Case studies

30

Case

• Improve customs legislation & practices • Train customs officials • Improve customs controls

2002 - 2003 revenues increased

by 158%

Reforms Impact

• Reform and improvements in customs administration

2006 - 2010 revenues increased

by 51%

• Improve automation systems and best practices in line with international standards

1990 - 1992 revenue increased

by 105%

Intra-Regional Trade and opportunities in the TFA

31

Intra-Regional Trade

2%

4%

5%

8%

9%

11%

13%

18%

20%

50%

52%

63%

CEMAC

COMESA

CARICOM

SADC

MIDDLE EAST

UEMOA

EAC

AFRICA

LATINAMERICA

NORTH AMERICA

ASIA

WESTERN EUROPE

Percentage of Intra-regional Trade per Region

Sources: UN AfricaRenewal Online: http://www.un.org/africarenewal/magazine/august-2014/intra-africa-trade-going-beyond-political-commitments Regional Integration in ACP countries by ODI (Overseas Development Institute, UK) supported by European Commission: http://ec.europa.eu/development/icenter/repository/Regional-Integration-Report-18-09-2008_en.pdf Establishing CARICOM’s Real Natural Trading Partner, CCMF-UWI: http://www.ccmf-uwi.org/files/publications/conference/2010/8_3-Hosein_Khadan-p.pdf WTO International Trade Statistics 2015

Who’s guilty?

Governments…

“Yes, we need to think regional, but what can we do, when we are unable to get our goods even to the domestic market due to procedural and infrastructure bottlenecks : going beyond borders in a non-starter’

Private sector representative

Businesses…

“The private sector is not thinking regional, it bask in the comfort of supplying domestic markets only, they fear competition from across the border and vested interests in particular stoke these fears’

Government representative

according to governments…

according to businesses…

2 key success factors needed to go forward 34

Business logic must be at the heart of regional integration projects

• Regional integration projects are initiated at the political level but they require a buy in from the private sector to be achieved

• Intra regional trade will intensify only if it makes sense economically for the businesses

Coordination between governments and private sector must be strengthened

• Ensure adhesion of the businesses to the regional integration processes through awareness raising

• Common identification of barriers to trade and the required solutions to remedy it and boost commercial trade flows within the region

1

2

Regional approach to implementation will maximize the benefits of the TFA

35

Authority for rule making has often been transferred to the community level • Areas where regional statutory framework and policies are directly affected:

regional intervention should come before national legislation • Example: UEMOA customs code

There is a need for harmonization of practices and regulations • Insufficiently coordinated national interventions can translate into disruptive and

counterproductive practices ; e.g. internet publications, border agency coordination

Economy of scales and sharing of resources can be achieved • e.g. establishment of temperature controlled warehouses for perishable goods

Only synchronized reforms allow businesses to fully benefit from the TFA • Overall supply chain performance = performance of the weakest link

3 levels of regional intervention should be considered

Regional harmonization • RIO provides guidelines for the implementation of TFA measures but

the country decide on an individual basis on the sequencing and timing of implementation

Regional Implementation • RIO takes charge over the implementation of selected measure on

behalf of its Member States (e.g. internet publication, enquiry points, border agency coordination)

Regional Coordination • RIO provides guidelines and ensures that implementation is

synchronized over the region to ensure maximum benefits for the traders

Implementation status

37

TFA status of implementation in the Americas Status of ratifications

TFA status of implementation in the Americas Status of Notification of measures Category A

Changing the mindset

Facilitation vs. control

Client vs. partners

Ambitious implementation vs. Legal compliance

Collaborative approach vs. Turf issues

These inefficiencies can be traced back to several key root causes:

CAUSES OF CROSS BORDER INEFFICIENCY

A control versus a facilitation mindset

Formalities are outdated and have not been reviewed for many years

There are vested interests in upholding unnecessary procedures

Lack of coordination between cross border agencies

Lack of automation and the use of ICT

The WTO defines Trade Facilitation as:

PROCEDURAL OBSTACLES VS. REGULATORY OBSTACLES

75% of obstacles identified in cross

border inefficiencies are linked to the

procedural requirements of meeting the

regulation rather than the stringency of

the regulation itself

ITC, NTM Studies

“

”

Going forward with implementation

Prepare implementation

Institute public-private

dialogue

Ensure strong Inter-agency coordination

Thoroughly structure TFA implementation roadmap • Conduct national assessment on compliance status with TFA obligations • Identify priority reforms and categorize TFA commitments • Identify potential donors and implementation partners

Involve private sector in finalizing the prioritization of the TFA commitment implementation • Businesses are the main service users, and as such are best suited to

point the main barriers to trade

Involve border regulatory agency for fine tuning the implementation of measures countries are partially compliant with • As well as in the prioritization of category commitments

National Trade Facilitation Committee could be the appropriate body to carry out these objectives

Private sector is at the core of border regulatory agencies missions

Pays duties and taxes

Transport goods

Duty and Taxes Collection

Trade Facilitation

Control of flows of goods

Fiscal Economical

Fraud protection Security

Protect national interests

Private Sector

Invest, import and export

Actors and victims of frauds

Businesses are the main users/clients of the border regulatory agencies and they should be involved in their reforms

• Trade policy reforms directly impact the business environment

• Negotiators and policy makers are better informed on the business interests and needs

• Businesses are in the best position to identify reforms opportunities and implementation strategies

• When businesses are involved in the policy making they are more likely to comply with the new rules

Why is public-private dialogue important in the context of the trade policy making reforms

What is public-private

dialogue ?

• Structured mechanisms aimed at facilitating the reform process by involving a balanced range of public and private sector actors

• Institutionalized tools to identify, filter, accelerate, implement, and measure policy reforms

Why is it so important?

Public-private dialogue must be leveraged at each stop of policy making process

Source: International Finance Cooperation

Diagnostic Solution Design Implementation

Monitoring and

evaluation

•Engagement •Definition •Empowerment

•Consensus building •Filtering

•Ongoing support •Watchdog •Resources

•Watchdog •Feedback loop

Structured dialogue Workable reforms Reforms that work

PPD contributes to all steps of reform process

3 provisions of the TFA specifically provide for strengthen PPD

Art. 2.1

Art. 2.2

Art. 23.2

Opportunity to Comment and Information before Entry into Force

Consultations

National Committee on Trade Facilitation

Opportunity to comment, information before entry into force and consultations

Measure description

Provide traders and other interested parties1 the opportunity and sufficient delay to comment changes to new or amended trade-related regulations2

Publish or make publicly available new or amended trade-related laws or regulations (or information about it) as early as possible before entry into force

1. Potentially includes foreign traders / stakeholders in addition to domestic actors 2. Related to import, export or transit of goods

Consult, on a regular basis, border agencies, traders and stakeholders within national territory1

Art. 2.1

Art. 2.2

TFA key measures and its benefits

49

Trade Facilitation Principles

Transparency Simplification

Harmonization

and Normalisation

Modernisation

4 pillars of Trade Facilitation

Collaboration between public and private sectors

MEASURES TO COMBAT CROSS BORDER INEFFICIENCY IN THE TFA

Review fees and formalities

Cross border co-operation

More efficient inspections

Rapid release

Pre-arrival processing

Rewarding mechanisms

Modernization of systems

Lack of transparency leads to:

Multiple fees and charges

Corrupt and discriminatory practices

Costs to mitigate formalities

WHY IS TRANSPARENCY IMPORTANT?

Costs to collect the information

Lack of predictability

Unfair and unpredictable decision making

Mistrust in the trading system

HOW TRANSPARENCY WORKS?

“Transparency is the sunlight which is the best disinfectant”

Transparency is achieved in two ways:

By providing equal and unfettered access to relevant information

By providing mechanisms that ensure fairness and non-discrimination

Transparency will contribute to:

Certainty and predictability

A reduction in corruption

A healthy business environment

Fair application of rules

HOW DOES THE TFA ENSURE FAIRNESS AND NON-DISCRIMINATION?

Fairness and non discrimination is provided for in the TFA in the following articles:

Article 2

Article 3

Article 4

Article 5

Prior publication and consultation

Appeal and review procedures

Advance rulings

Article 6

Article 10

Test Procedures

Fees, charges and penalties

Rejected goods

STILL NOT SATISFIED? YOU HAVE A RIGHT TO APPEAL CUSTOMS DECISIONS

Governments shall provide businesses the right to an appeal or review of any customs decision The appeal or review shall be conducted by an official that is independent of the customs officer, or by an authority at a higher level. If the decision is unduly delayed the business has the right to appeal the next higher level of the administration or judicial authority.

Tariff classification

TFA Article 4 Reference: Guide, page 77.

Refusal or rejection of a claim for drawback or a refund

Assessment of administrative penalties

Customs valuation

Decisions that can be appealed include:

NO MORE DISPROPORTIONATELY HIGH, UNFAIR AND POORLY DOCUMENTED PENALTIES

Rules customs should abide by

Document the rational for the penalty and the rules for determining penalty amount

Only penalize the person responsible for the breach

Ensure that minor errors by businesses, such as clerical errors, do not result in excessive penalties

Consider a ‘voluntary disclosure’ to be a mitigating factor

Avoid scheme that awards customs officers with a percentage of penalties

TFA Article 6.3 Reference: Guide, page 84

Benefits for the traders

You will not be subject to disproportionate or arbitrary customs penalty amounts

Customs must give you a written explanation so that you can make an effective appeal or petition to reduce or cancel the penalty

If you discover and disclose that you made errors, you will be able to avoid, or be subject to a reduced penalty

ARE YOU GIVEN AN IDEA OF THE AVERAGE RELEASE TIME ? THIS INFORMATION WILL BE PUBLISHED

Enhanced predictability

Better planning

Improved management of operations

Governments are encourage to measure and publish periodically, and in a consistent manner, the average release time of goods

TFA Article 6.3 Reference: Guide, page 126.

Covers all border crossing requirements (i.e entire period between the arrival of the goods and their departure from the border crossing point)

Average could be at a particular border entry point and/or a national average

WCO - TRS is one of the tool that may be used to compute average release times

FOCUSING CONTROLS WHERE AND WHEN THEY MATTER: RISK MANAGEMENT AND PCA

Agencies must concentrate their resources on high risk consignment and expedite release of low risk

consignments

Controls should be decided on objective, non-discriminatory and non-arbitrary criteria such as: HS code Goods nature Country of origin Country from which the goods are shipped Value of the goods Compliance record of traders Type of means of transport

Border agencies should shift part of their control away from the border

Post clearance audit

Agencies would very accuracy and authenticity of declarations through the examination of the relevant books, records, business systems and commercial data held by the trader AFTER the release of the consignment

Risk management

TFA Articles 7.4 and 7.5 Reference: Guide, page 125

ASYCUDA: Differentiated customs procedures based on risk

RISK MANAGEMENT CASE STUDIES

Green channel Automatic release for low risk consignment

Yellow channel Documentary control for medium risk shipments

1

2

Risk Management benefits in New Zealand

Red channel Documentary controls coupled with physical inspection

3

Fewer inspections

Less than 5% of import shipments are subject to checks

Faster release time

99% of compliant transactions are processed within 30 minutes

Enhanced customs efficiency

Increase in # of transactions (from 1M/y to 4M/y between 2000-2011) was managed without significant cost increase

Playing your part, the private sector role

GOVERNMENTS HAVE LEGITIMATE POLICY OBJECTIVES TO IMPLEMENT BORDER CONTROLS

Revenue collection

In developing countries duties and taxes can account up to 50% of government revenues

The increasing security threats (e.g. terrorism) and booming drug trafficking requires adequate response from border authorities

Concern about public health, fauna and flora and the environment

Protection from unfair international practices

Prevent smuggling and entry of banned products

Answer new demands for protection from society

AND BUSINESS HAVE LEGITIMATE REASONS TO REQUEST SIMPLE, CHEAP AND EFFICIENT BORDERS

Business performance

Inefficient borders lead to direct and indirect costs that jeopardize businesses financial and operational performances

Inefficient borders pushes imported inputs prices up and reduces business competitiveness

Input prices Business environment

Inefficient borders drive out foreign direct investment that are critical to create a dynamic business environment

PUBLIC AND PRIVATE SECTOR HAVE A SHARED RESPONSIBILITY TO CREATE A FACILITATIVE TRADE ENVIRONMENT

Personal vested

interests

Control mindset

Turf issues

Individual over

business community interests

Avoidance

Evasion

Public sector Private sector

Fairness & Transparency

Less evasion and personal vested

interests

More reasonable

controls

Greater efficiency

Facilitative mind-set Overly complex and

unfair rules

Evasion and personal vested

interests

Excessive controls

Greater inefficiency

Non facilitative mindset

All stakeholders must contribute to the shift from an inefficiency cycle to an efficiency cycle

SO WHO IS RESPONSIBLE FOR “FACILITATION MINDSET”? EVERYONE, INCLUDING YOU!

The efficiency cycle The inefficiency cycle

What you can do at the business community level

2

TWO AREAS OF FOCUS

What you can do at the company level 1

FIX THE ROOF WHILE THE SUN IS SHINING!

The 4 step process to compliance

Develop trusted relationships

Participate in the consultative process Stay informed

Getting your own systems in order and be

compliant and honest

LEARN TO WORK WITH YOUR CUSTOMS BROKERS AND FREIGHT FORWARDERS

Understand the role of the agent, know what it is that they do’ 1

Be clear about liability, you are liable to the cross border agencies 2

Know how to instruct and do it formally (Forwarders Instruction) 3

Be aware of vested interests 4

“SILOS ARE ONLY FOR GRAINS” – THE BUSINESS COMMUNITY SHOULD ACT TOGEHER

Organize yourself as a voice

Get involved in public-private dialogue platforms and know your rights

There are four main types of actions to take as a business community

Engage with cross border agencies

Substantiate your position and recommendation with evidences: data and experiences

FIGHT FOR INCLUSIVE, COMPREHENSIVE, AND COORDINATED PPD FORUMS

To be effective and successful, businesses must coordinate amongst themselves

Be involved in the prioritization of reforms, policy formulation, implementation through PPP and monitoring

Ensure that all economic sectors and companies of all sizes are represented in the PPD process

Coordinated Inclusive Comprehensive

REMINDER: ARTICLE 2 OF THE TFA STRUCTURES PUBLIC-PRIVATE DIALOGUE

Provide traders opportunity and appropriate time to comment on new or amended trade laws and regulations

Hold regular consultations between border agencies and traders Art. 2.2

Art. 2.1.a

Art 2.1.b

Publish trade related laws and regulation as early as possible before their entry into force

Establishing a National Trade Facilitation Committee is a must !

NATIONAL TRADE FACILITATION COMMITTEES: HAVE YOUR SAY IN THE TF REFORM PROCESS

All border agencies and representative from the private sector must be represented to coordinate and facilitate trade facilitation reforms

It is your right – and your duty – to be consulted and contribute Join the hand of the government to make the NTFC work

How can you contribute What is the mandate of the National Trade Facilitation

Committee

HOW CAN THE NATIONAL TRADE FACILITATION COMMITTEE CONTRIBUTE

Identify bottlenecks to cross-border trade

Formulate recommendation for regulatory and procedural reforms

Monitor the effective implementation of trade facilitation reforms

Have a seat at the table

Ask that private sector be represented in the governance structure

Participate in activities

Contribute to financing

Presenting ITC’s integrated TF program

73

Improving SMEs Competitiveness for exports

through implementing the Trade Facilitation Agreement

Scheduling commitments

under the WTO TFA

Improving inter-agency coordination

and SME involvement in

PPD

Enhancing transparency and access to

information

Strengthening SMEs ability to cross borders

Improving efficiency of cross-border procedures

In-house expertize and intellectual leadership

Facilitating public-private dialogue in trade policy formulation

Implementing TFA to promote and deepen regional integration

Collaborating with leading public and private TF agencies

Focus: Comply with TFA short term requirements

74

Support TFA categorization process: Category A, B, or C and estimate indicative and definitive implementation dates

Support evaluation of financial and technical assistance required for Category C provisions

Assist in preparing bankable project plans to raise donor funds and mobilize technical assistance

Support domestic ratification process: for acceptance of protocol of amendment and notifications to the WTO

Comply with TFA short term

requirements

Strengthen SMEs ability to cross

borders

75

Enhance SMEs ability to comply with existing trade procedures: training, networking with border officials…

Connect SMEs with logistic providers: for integration of SMEs in global value chains

Support informal cross-border traders to go formal: Building on WICBT project already on-going in Uganda and Burundi

Enhance TSI capacities to support private sector in managing cross-border operations

Focus: Strengthen SMEs ability to cross borders

6 new publications on trade facilitation

Enabling trade: catalyzing TFA implementation in Brazil • In collaboration with WEF

Enabling trade: increasing the potential of trade reforms • In collaboration with WEF

SMEs and the WTO Trade Facilitation Agreement: a training manual • In collaboration with ICC,

UNCTAD and UNECE

National Trade Facilitation Committees: Moving towards implementation • In collaboration with UNCTAD

and UNECE

Global Survey on TF and Paperless Trade Implementation • In collaboration with UN regional

commissions

Paperless trade facilitation for Small and Medium-sized Enterprises • Ongoing

Thank you!

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Ezequiel M. Guicovsky Lizarraga guicovsky@intracen.org