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UN Analysis Shows More Work Needed on WTO Trade Facilitation Implementation

Two years after the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) went into effect, a new analysis from United Nations Conference on Trade and Development (UNCTAD) shows that the initial step–implementation and assistance–remains a pending goal for nearly 50 percent of developed and developing countries.

According to the report, the two-year mark on Feb. 22 was a critical implementation date. While 141 out of 164 WTO members have ratified the TFA, the remaining 22 are all developing countries, half of which are classified as Least Developed Countries.

As commerce between WTO members accounts for 98 percent of world trade, the TFA aims to speed up the movement, release and clearance of goods across international borders, and enhance effective cooperation between customs services.

“We provide support to countries implementing the TFA because faster clearance at the border means families pay less for food, clothes, electronics and more,” Shamika N. Sirimanne, director of UNCTAD’s technology and logistics division, said. “This is especially important in poorer countries, where trade costs 1.8 times more than elsewhere because of border delays.”

Full implementation of the TFA would decrease trade costs by an average of 14.3 percent, according to the WTO. In turn, it offers a significant opportunity to boost global commerce, promote public prosperity and help countries meet the UN Sustainable Development Goals.

However, the UNCTAD report said developing and Least Developed Countries seeking to qualify for “special and differential treatment” provisions of the TFA must comply with the implementation notification requirements set out in the agreement.

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“These notifications are part of the deal,” Sirimanne said. “Developing countries cannot expect to reap the benefits from these flexibilities if they do not comply with their part of the deal. But they are not alone in this journey. They can count on development partners like UNCTAD to assist them.”

UNCTAD assists countries in the implementation of the TFA by various means, including the Empowerment Program for National Trade Facilitation Bodies, which has five modules that provide information and the tools needed to implement trade facilitation reforms. From establishing a committee to creating a national roadmap for mainstreaming trade facilitation, UNCTAD tailors these modules to the needs of the countries as needed, ensuring its sustainability by training trainers to pass on knowledge.

The Automated System for Customs Data (ASYCUDA) facilitates trade efficiency and competitiveness by reducing transaction times and costs, promoting sustainable development by cutting down the use of paper, enhancing transparency and improving revenue collection. ASYCUDA has reportedly made customs processes easier and faster in 115 countries.

UNCTAD also developed trade portals for 34 countries. These include step-by-step procedures, forms and documents, costs and duration of each action, contact information of people in charge, and the legal basis and complaints procedures.

Also available are implementation plans and roadmaps for trade facilitation reforms. So far, UNCTAD has assisted some 60 countries in the drafting of national implementation plans and roadmaps for comprehensive trade facilitation.