Abstract
It is becoming more evident that better market access conditions alone do not translate directly into increased trade opportunities for African countries. A greater obstacle than tariffs is the high cost of moving goods across Africa’s borders. In addition to supply-side capacity constraints, behind the border barriers and non-tariff measures (NTMs) are increasingly hampering African trade, whose share in world merchandise trade remains a measly 2.7% in 2018. With the aim of lowering transaction costs for businesses and to help expedite the clearance and release of goods across borders, in 2013, Members of the World Trade Organization (WTO) have successfully concluded a new multilateral Agreement on Trade Facilitation, the first since the Uruguay Round twenty years before. The Trade Facilitation Agreement (TFA) entered into force in February 2017, with over two-thirds of the membership ratifying the Agreement. On September 1, 2019, there are 35 African countries out of 41 who have ratified the TFA. According to the OECD and WTO, estimates show that the full implementation of the TFA could reduce trade costs by an average of 14.3% and boost global trade by up to US$ 1 trillion per year, with the biggest gains in the poorest countries. While there are benefits for African countries to implement the TFA sooner rather than later, many will require substantial technical assistance and capacity building (TACB) support to properly implement the trade facilitation measures in the TFA. Equally as important, the need for African policymakers is to recognize the political economy aspects of the implementation challenges, which are intertwined in trade facilitation domestic reform. This chapter will first address some of the key challenges facing African countries’ trade potential and the benefits accruing from facilitating their trade. Then, a brief description of the TFA and its novel provisions will be outlined as well as the status of implementation of African countries. Finally, the constraints related to the implementation of trade facilitation measures are addressed and in conclusion, some policy recommendations.
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- 1.
World Trade Statistical Review, 2019. https://www.wto.org/english/res_e/statis_e/wts2019_e/wts2019_e.pdf.
- 2.
WTO Web site, available online at http://www.wto.org/english/tratop_e/tradfa_e/tradfa_intro_e.htm.
- 3.
World Trade Statistical Review, 2019. https://www.wto.org/english/res_e/statis_e/wts2019_e/wts2019_e.pdf.
- 4.
WTO, International Trade Statistics 2019. https://www.wto.org/english/res_e/statis_e/wts2019_e/wts2019_e.pdf.
- 5.
Limão and Venables (2001).
- 6.
Trade and Investment; Trade and Competition; and Transparency in Government Procurement.
- 7.
After the Decision Adopted by the General Council on 1 August 2004 (the July Package), WTO Members began negotiations in the area of trade facilitation.
- 8.
As set out in Annex D (Modalities for Negotiations on Trade Facilitation) of the Decision Adopted by the General Council on 1 August 2004, WTO document WT/L/579, 2 August 2004 (the July Package).
- 9.
For a comprehensive analysis of the theoretical underpinnings of trade facilitation, please refer to the WTO World Trade Report, 2015, Chapter C. “The theory and measurement of trade facilitation”. Viewed at https://www.wto.org/english/res_e/booksp_e/wtr15-2c_e.pdf.
- 10.
- 11.
- 12.
Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods.
- 13.
Limão and Venables (2001).
- 14.
Agreement on Trade Facilitation, WTO document WT/L/931, 15 July 2014.
- 15.
This chapter is not intended to explain each of the 36 TF measures but rather to describe pertinent measures related to Africa's implementation status of the TFA. For an exhaustive description of the TF measures, please refer to the WTO's Trade Facilitation Agreement Facility website. Viewed at http://www.tfafacility.org/trade-facilitation-agreement-facility.
- 16.
WTO African developing countries are Botswana, Cameroon, Congo, Cote d'Ivoire, Egypt, Gabon, Ghana, Kenya, Kingdom of Eswatini, Mauritius, Morocco, Namibia, Nigeria, Seychelles, South Africa, Tunisia, Zimbabwe.
- 17.
WTO African LDCs who benefit from the flexibilities prescribed for LDC Members are Angola, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Democratic Republic of the Congo, Djibouti, The Gambia, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal, Sierra Leone, Tanzania, Togo, Uganda and Zambia.
- 18.
The six countries who are yet to ratify are Burundi, the Democratic Republic of the Congo, Liberia, Mauritania, Tanzania, and Tunisia.
- 19.
WTO TFA Facility. http://www.tfafacility.org/notifications.
- 20.
WTO TFA Database. https://www.tfadatabase.org/notifications/global-analysis.
- 21.
- 22.
A “Single Window” is a facility that allows traders to lodge standardized information and documents with a single-entry point to fulfill all import, export, and transit-related regulatory requirements. If information is electronic, then individual data elements need only be submitted once.
- 23.
UNCTAD (2011) UNCTAD Trust Fund for Trade Facilitation Negotiations, Border agency coordination, available online at http://unctad.org/en/docs/TN14_BorderAgencyCoordination.pdf.
- 24.
Hassan (2015).
- 25.
World Bank (2006).
- 26.
For information on Singapore’s TradeNet Single Window, refer online at: http://www.customs.gov.sg/leftNav/trad/TradeNet/An+Overview+of+TradeNet.htm.
- 27.
Information on East African Corridors, available online at http://www.eastafricancorridors.org/cds.
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Hassan, M. (2020). Africa and the WTO Trade Facilitation Agreement: State of Play, Implementation Challenges, and Policy Recommendations in the Digital Era. In: Odularu, G., Hassan, M., Babatunde, M. (eds) Fostering Trade in Africa. Advances in African Economic, Social and Political Development. Springer, Cham. https://doi.org/10.1007/978-3-030-36632-2_2
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