1. Trade Facilitation and Development
Presentation by
Emily Mburu-Ndoria
Coordinator, Trade in Services and Trade Facilitation Unit
COMESA Secretariat

2. Outline What and why trade facilitation
Challenges and opportunities of trade facilitation
Trade facilitation in COMESA – mandate, instruments and institutions
Trade facilitation and the Tripartite Free Trade Area
Development implications of trade facilitation
Conclusion

3. What is Trade Facilitation?
OECD
‘simplification and standardization of procedures and associated information flows required to move goods internationally from seller to buyer and to pass payments in the other direction’.
UN/ECE
‘comprehensive and integrated approach to reducing the complexity and cost of the trade transation process, and ensuring that all these activities can take place in an efficient, transparent and predictable manner, based on internationally accepted norms, standards and best practices’.
WTO
‘simplification and harmonization of international trade procedures, including activities, practices, and formalities involved in collecting, presenting, communicating, and processing data required for the movement of goods in international trade’.

4. What to consider……..
The simplification and harmonization of international trade procedures;
The increase of economic growth for countries and their companies by reducing unnecessary bureaucratic demands and procedures;
The strengthening of each country’s autonomous right to defend itself against illegal and unwanted trade practices;
Trade procedures cover activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in regional and international trade.

5. Why Trade Facilitation?
Removing Non Tariff Barriers (NTBs) is essential to free-up regional trade in goods - transport, customs and logistics inefficiencies raise trade costs
Restrictive rules of origin limit preferential trade
Poorly designed technical regulations and standards limit consumer choice and hamper trade
Other non-tariff barriers restrict opportunities for national and regional sourcing

6. Why does Trade Facilitation Matter for businesses?
Increase in international trade volumes and change in business environment
Not matched by reform and modernisation
Global expansion of regulatory requirements (health, safety, preferential tariffs, environmental issues)
Cost implications for businesses
Number, diversity & complexity of documentation and information requirements
Varying procureral requirement
Red tape
→ Increase in effeciency in port handing, customs and regulatory envoronments and use of e-commerce by enterprises would increase welfare
95% of the volume of cargo transported in the region is by road transport. The typical charge for a stationary truck is between US$200 to US$400 a day. If a truck takes 3 days to clear a border the transporter will pass on an additional cost of between US$600 to US$1,200 for the cost of the truck sitting idle at the border to the importer.

7. Challenges and Opportunities of Trade Facilitation
Technical: e.g. risk management procedures, application of standards
Institutional: e.g. inter-agency cooperation, Single Window
Financial: e.g. buying hard & software, hiring professionals
Legal : new or more sophisticated rules needed to reflect processes and concepts, e.g. (legally binding) advance rulings, authorized trader
Economic – e.g. deferred collection of duties from authorized traders
Political – e.g. abolishment of shipping notes, pre-shipment inspection and other “cash cows”
Opportunities
Reform & Reduce cost for business
Importance of assessing Trade Facilitation situation at the national and regional levels

8. Regional Cooperation on Trade Facilitation in COMESA
COMESA Treaty recognizes the important role that infrastructure, transport and communications play in promoting socio- economic development and inter-connectivity between and among Member States
Chapter 11 is on cooperation in the development of transport and communications – individual and collective provisions to interconnect the infrastructure and communications networks
COMESA has and continues to be a leader in trade facilitation
COMESA Protocol on Transit Trade and Transit Facilities

9. Trade Facilitation in COMESA-Instruments
The Yellow Card – Third Party Insurance
COMESA Carrier License – road freight operators
Harmonized axle road and Gross Vehicle Mass limits
Customs Declaration Document
Regional Customs and Transit Guarantee Scheme (RCTG) – COMESA CARNET
Simplified Trade Regime (STR)
One border post (Chirundu etc)
Trade in services: ICT, telecommunication, banking, insurance, transport

10. Some COMESA Autonomous and semi-autonomous agencies that facilitate trade
PTA Bank
African Trade Insurance Agency (ATI)
PTA Re Insurance Company (ZEP-RE)
COMESA Infrastructure Fund
COMESA Clearing House
COMESA Monetary Institute
COMESA Regional Investment Agency (RIA)
COMESA Business Council (CBC)
COMESA Federation of Women in Business
COMESA Regional Competition Commission

11. Trade Facilitation in COMESA- New Developments
Two flagship programmes on trade and transit facilitation
COMESA Virtual Trade Facilitation System (CVTFS)
COMESA Electronic Market Exchange Systems (still under development)
The CVTFS was launched in September 2012 in Addis Ababa, Ethiopia (Djibouti-Addis Ababa- Khartoum-Juba Corridors)
Real time metric for measuring the efficiency of transit and indicators of the cost of doing business
Real time information to both Government agencies and economic operators (customs & transport operators)

12. Regional Cooperation on Trade Facilitation - Tripartite
Tripartite comprises of 3 Regional Economic Communities (RECs) namely, COMESA, EAC and SADC
Membership of 26 Countries in the Eastern and Southern African Region
Started with the purpose of strengthening economic integration in the region through harmonizing and/or promoting joint implementation of respective economic, trade, infrastructure and related programmes

13. Tripartite and Trade Facilitation
To address trade facilitation challenges the Tripartite developed the Comprehensive Trade and Transport Facilitation Programme (CTTTFP)
The programme encompasses regulatory and policy reforms encouraging the adoption of:
international instruments and best practices;
national and regional capacity building activities to facilitate cross-border movements; and
enhancement of infrastructure facilities at border posts to improve efficiency of cross-border movements.
This is also coupled with an attempt to introduce Rules of Origin that will encourage intra-regional trade but also limit trade deflection and diversion

14. Elements of the Comprehensive Tripartite Trade and Transport Facilitation Programme (CTTTFP)
The NTB Monitoring, Reporting and Removal System
Border and Customs procedures (one-stop border posts; Integrated Border Management, regional customs bond, transit management)
Immigration procedures (movement of business persons)
Transport procedures (regional 3rd party insurance, vehicle standards and regulation, self- regulation of transporters, overload control, harmonised road user charges, regional corridor management systems
The establishment of the Joint Competition Authority linked to air transport liberalisation.

15. Objectives of the CTTTFP
Increase trade and promote economic growth by supporting the improvements in policies and regional regulatory and economic environment
Reduce high costs of trading & help national administrations to address barriers to trade and growth
Reduce transit times and transaction costs along the principal corridors through better infrastructure development, faster border crossings and harmonized trade and transit regulations
Improve aid effectiveness by coordinating donor funding

16. Development Implications of Trade Facilitation
TF is part of the general development process and the structural change of economies
TF and development mutually benefit each other
TF has to be accompanied by other measures (e.g. investment in transport infrastructure, capacity building, and modernization of banking)
New technologies and streamlining of procedures will also require development of human skills
Introduction of institutional reform, capacity building and new technologies might require support from development partners

17. Development Implications of TF (2)
Determining the TF solutions adapted at the regional level (also national) require:
assessment of TF needs and priorities
determination of the gap between requirements derived from mandatory international instruments and countries’ capacity to comply
joint efforts by the trade and transport communities

18. Conclusion
Ensure that all the objectives contained in the mandates (COMESA & Tripartite) are addressed in a balanced way
Ensure the outcome of the negotiations allow for TF initiatives that are commensurate, in terms of implementation time and scope, with achievement of national and regional trade objectives.
Implementation of initiatives and mandates on trade facilitation is crucial for development in the region

19. Thank you/ Merci/Shukran/Asante