Trade Facilitation, the Doha Round, and LDCs

1. Trade Facilitation, the Doha Round, and LDCs Nkululeko Khumalo 26 June, 2005 Livingstone, Zambia

2. Overview • What is Trade Facilitation • Importance of Trade Facilitation • Trade Facilitation and the DDA • The development dimension

3. 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)

4. Importance of Trade Facilitation • 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 • Benefits for Governments: • Improve revenue collection • Maintain and improve customs control measures

5. 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

6. Trade Facilitation and the Doha Agenda Negotiation Issues • General principles • Transparency and appeal • Import and export formalities • Transit • Technical assistance and capacity building

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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.