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Development Account Projects

Strengthening capacities of developing countries in Africa and Asia to support their effective participation in negotiating bilateral, regional and multilateral trade facilitation arrangements

Background:

In an international environment where tariffs and quotas are falling and represent less of a barrier to trade, trade facilitation has emerged as an important trade policy tool. The main objective of trade facilitation is to reduce complexities and costs associated with cumbersome border procedures and controls. According to the World Bank, administrative hurdles arising from cumbersome border procedures can cause up to 75 per cent delay of shipments. Each additional day of delay reduces trade volume by at least 1 per cent. Landlocked developing countries (LLDCs) are affected the most, as their access to overseas markets depends on the regulatory and procedural requirements for trade and transit systems of their neighbouring countries.

Trade facilitation has therefore become one of priority issues on national trade development agendas in many LLDCs in Africa and Asia. More often than not LLDCs need to seek common solutions and collaboration with their neighbouring transit countries. It would therefore not come as a surprise that trade facilitation measures have been increasingly pursued regionally as part of regional trade agreements (RTAs). Over 470 RTAs are in place or under negotiations world-wide. About one-third of these RTAs contain specific trade facilitation chapters and commitments. Most developing countries pursuing RTAs are members of two or more such regional arrangements, often containing overlapping or diverging trade facilitation commitments. For example, countries of the Eastern African region are members of different customs unions - the East African Community (EAC), Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC) - and are in the process of negotiating an Economic Partnership Agreement with the European Union. All these arrangements contain elaborate trade facilitation measures and have to be implemented at the national level in a coherent manner. With their multiple trade facilitation commitments arising of the South Asian Free Trade Agreement (SAFTA), Asia-Pacific Trade Agreement (APTA) and a 'spaghetti bowl' of bilateral RTAs, countries of the South Asian region are in a similar situation.

According to UNCTAD's study "Trade Facilitation Measures in Regional Trade Arrangements", and as expressed by experts at the Ad Hoc Expert Meeting on this subject, there might be a risk of potential discrimination and divergence resulting from multiple RTAs if trade facilitation measures are not designed, managed and applied properly. In order to do so, there is a need to carefully analyze trade facilitation measures under different RTAs and put in place mechanisms at the national and regional levels that would integrate regional trade facilitation commitments into national trade facilitation policies frameworks in a coherent manner.

This project seeks to enhance the capacity of the selected landlocked and transit developing countries in East Africa and South Asia to design, manage and implement regional trade facilitation commitments in such a manner that they are:

  1. Coherent with the trade facilitation measures contained in the negotiated WTO agreement on trade facilitation; and
  2. Aligned to national policies and frameworks.

The project activities and deliverables will be implemented at three levels:

 

Project activities and deliverables

National

a) Establish new or strengthen existing national working groups
b) Develop implementation plans and studies
c) Train national stakeholders to design, manage and implement regional and national trade facilitation solutions

Regional

d) Create two regional collaboration clusters, one in South Asia and one in East Africa
e) Facilitate the exchange of best practices and lessons learned

Inter-regional

f) Facilitate the exchange of best practices and lessons learned
g) Develop an online best practice sharing tool

Objective:

To strengthen the capacity of policy makers and trade negotiators in landlocked and transit developing countries in Africa and Asia to implement regional and multilateral trade facilitation arrangements in order to promote regional and interregional trade and cooperation

Expected accomplishments:

  • Increased skills of policy makers and trade negotiators in the six countries to design policies and frameworks to adopt regional and multilateral trade facilitation arrangements.
  • Establishment of new and/or reinforcing existing national and regional trade facilitation collaborative platforms among the public and private sector stakeholders in the six countries.

Implementation status:

  • Supporting Bhutan, Burundi and Rwanda to create a National Trade Facilitation (TF) Committee and strengthening these committees in Bangladesh, Nepal, Tanzania and Uganda.
  • National implementation plans for Trade Facilitation finalized in Bangladesh, Bhutan, Nepal, Rwanda, Tanzania and Uganda.
  • Training on trade facilitation to more than 40 stakeholders in Burundi and Nepal