Africa Seeks to Make International Trade Cheaper, Faster and Easier At Addis Ababa Forum

6 November 2018
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United Nations Economic Commission for Africa (Addis Ababa)

Addis Ababa — African countries seeking to reduce the cost, time and complexity of interregional and international trade in goods and services will gather for the First African Forum for National Trade Facilitation Committees in Addis Ababa, Ethiopia, on 27-29 November.

The landmark event, organized by UNCTAD in collaboration with seven partner organizations, including the Economic Commission for Africa, comes as Africa scales up its trade easing efforts after the World Trade Organization's Trade Facilitation Agreement entered into force in February 2017 and as they prepare to implement the Africa Continental Free Trade Agreement signed in March 2018.

"Our estimates at the ECA show that the AfCFTA will provide a strong impetus for intra-African trade, thereby creating jobs and encouraging economic diversification of our economies. Further, our projections show the value of intra-African trade to be between 15 percent and 25 percent higher in 2040, compared to a situation with no AfCFTA,Our estimates at the ECA show that the AfCFTA will provide a strong impetus for intra-African trade. Our projections show the value of intra-African trade to be between 15 percent and 25 percent higher in 2040, compared to a situation with no AfCFTA, " says the Executive Secretary of the ECA, Vera Songwe.

"We also find that gains are significantly higher when the AfCFTA is implemented alongside trade facilitation measures. This highlights the crucial importance of advancing Africa's trade facilitation agenda at the same time as the continent's trade liberalization, and is why African policymakers made a conscious decision to include trade facilitation and customs cooperation within the scope of the AfCFTA Agreement, " she adds.

A central plank of the Trade Facilitation Agreement is the obligation of each country to set up a National Trade Facilitation Committee (NTFC) with both public and private sector stakeholders "to facilitate both domestic coordination and implementation of the provisions of this agreement".

With well-functioning NTFCs, countries will be able to make trade, easier, faster and cheaper. For developing countries, and especially least developed countries - the majority of which are in sub-Saharan Africa - implementation of the Trade Facilitation Agreement could lead to a reduction in trade costs of up to 15%.

Correctly implemented trade facilitation measures not only boost trade but also improve revenue collection, safety and security compliance controls (for example, improving food safety) and can help to streamline government agencies.

Such reforms help small traders, often women, enter the formal sector, make economic activities more transparent and accountable, promote good governance, generate better quality employment, strengthen information technology capabilities and generally modernize societies by bringing about benefits related to administrative efficiency.

Trade facilitation reforms are also positive steps towards human, enterprise and institutional development, and therefore link to achieving the 2030 Agenda for Sustainable Development.

For these benefits to be realized it is important that the Trade Facilitation Agreement is implemented as foreseen. According to the WTO, the rate of implemented commitments under the agreement as of October 2018 stood at 60% - but broken down by level of development a new picture emerges, with developed countries having achieved 100% of commitments, developing countries having achieved 60% of commitments and least developed countries just 22% of commitments.

By coming together to share experiences, learn lessons on common challenges, and meet with development partners and donors, participants at this event are expected to turbocharge their trade facilitation efforts.

Topics covered during the three-day event include the role of the African regional organizations, the role of NTFCs in the implementation of trade facilitation provisions in the AfCFTA, paperless initiatives at entry points, the involvement of the private sector in NTFCs, how to coordinate border agencies, and the role of transit corridors. There will also be sessions on the gender dimension in cross-border trade, and the application of digital technologies in future modes of trading.

Read the original article on UNECA.

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