Addis Ababa — Trade Facilitation is one of the key negotiation issues in the run-up to the 9th session of the WTO Ministerial Conference to be held in Bali from 3 to 6 December 2013, and features as a key priority area in the African Union Action Plan towards boosting intra-African trade.

A large body of empirical evidence suggests that trade facilitation could have a significant and positive impact on Africa's trade performance. In this publication, ECA analyzes from a technical standpoint four key aspects related to trade facilitation, and the ensuing key messages are as follows.

First, the disproportionate magnitude of transaction costs in Africa creates a competitiveness wedge penalizing African producers against their competitors, and this in turn confirms the importance of trade facilitation for African economies. In addition, trade-related costs pose an obstacle not only to Africa's trade with the rest of the world, but also - and sometimes more heavily so - to intra-African trade. Secondly, through cutting transaction costs, trade facilitation could have an important role to play in providing cheaper access to imported intermediate inputs, thereby supporting industrialization, facilitating the emergence of regional and subregional supply chains and boosting African exports.

Third, regardless of the WTO negotiation process, a number of African countries are moving towards implementing many of the trade facilitation instruments covered by the proposed WTO negotiating text, be it in the framework of regional initiatives or at national level. Finally, even if the potential benefits are likely to outweigh the ensuing costs, financing trade facilitation measures appears to be a crucial issue to Africa.