Trade Facilitation, the Doha Round, and LDCs

Trade Facilitation, the Doha Round, and LDCs

Nkululeko Khumalo

26 June, 2005

Livingstone, Zambia

Overview

1. What is Trade Facilitation

2. Importance of Trade Facilitation

3. Trade Facilitation and the DDA

4. The development dimension

What is Trade Facilitation?

In WTO context:• Focus on procedures in movement and release of goods• Import, export and transit: simplify, reduce, standardise,

modernise• Strengthen and improve Article V, VIII and X of GATT

Broader definitions cover resolving challenges posed by:• Technical barriers to trade (TBT Agreement)• Sanitary and Phytosanitary standards ( SPS Agreement)

Importance of Trade Facilitation

1. Benefits for Traders: Reduce the costs of trade transactions (US$300bn) Time savings – in sync with just in time culture Developing country enterprises and SMEs

2. Benefits for Governments: Improve revenue collection Maintain and improve customs control measures

Some Success Stories

Trade procedures cost between 2-10% of trade value• Costa Rica: border crossing delays reduced from 6days to 12mins• Bangladesh 3days to 3hours• Chile: US$ 5mn invested, US$ 1 mn saved per month• Peru: Quadrupled revenue collected between 1995-2000

Trade Facilitation and the Doha Agenda

Negotiation Issues General principles Transparency and appeal Import and export formalities Transit Technical assistance and capacity building

Trade Facilitation and the DDA cont.

Application of principles of GATT/WTO Agreements Transparency Non-discrimination Least trade restrictiveness Use of international standards Development provisions

Trade Facilitation and the DDA cont.

Transparency and appeal – improve GATT article X:• Transparency of all customs laws and procedures• Advance notification of changes• Consultation• Periodic review and consolidation of customs rules• Customs appeal procedures

Trade Facilitation and the DDA cont.

Import and export requirements: revamp GATT Article VIII:• Reduce complexity and diversity of fees and formalities• Notify, bind and reduce standard release times• Introduce simplified customs release and clearance;

automation• Simplify and standardise data and documents• Integrated border management and one-stop borders• Risk assessment, and profiling of authorised traders

Trade Facilitation and the DDA cont.

Transit – improve GATT Article V: Simplify transit rules, procedures and requirements:

critical for landlocked LDCs Transit should be less complicated than import Fees and charges proportionate to cost of services

provided

The Development Dimension

Development provisions: The ‘July Framework Agreement’ firmly links

commitments to a country’s capacity to implement Flexibilities and exemptions esp. for LDCs important ‘Contractual right provisions’ to capacity building and

technical assistance needed. Proposed rules and commitments both resource -

heavy and resource-light

The Development Dimension cont.

GATT principles:non-discrimination, transparency –relatively resource light

New technologies e.g automation – resource heavy WTO commitments therefore need resources Technical assistance holds the keys for success in

negotiations

The Development Dimension cont.

For success capacity building and technical assistance: Programmes must be tailored to individual country

needs Ownership and active participation by recipient

crucial Recipients should be the ones who identify and

prioritise their needs. Cooperation between donors and recipient

important.