Presentation by Emily Mburu-Ndoria

Coordinator, Trade in Services and Trade Facilitation Unit

COMESA Secretariat

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

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’.

• 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.

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

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

Challenges◦ 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

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

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

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

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)

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

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

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.

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

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

Determining the TF solutions adapted at the regional level (also national) require:

assessment of TF needs and prioritiesdetermination of the gap between requirements derived from mandatory international instruments and countries’ capacity to complyjoint efforts by the trade and transport communities

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