TFA promises dramatic benefits – but can it deliver?

There’s a World Trade
Organisation (WTO) trade
agreement, very close to
being globally ratified, which
in theory offers a golden age
for SA traders, but which in
practice could possibly fail
miserably.
Concluded at the WTO’s
2013 Bali Ministerial
Conference, the Trade
Facilitation Agreement
(TFA)
contains
provisions for
expediting the
movement,
release and
clearance
of goods,
including
goods in
transit. It
also sets out
measures
for effective
cooperation
between customs and other
appropriate authorities
on trade facilitation and
customs compliance issues.
It further contains provisions
for technical assistance and
capacity building in this
area.
And, according to a 2015
study carried out by WTO
economists, this agreement
promises highly attractive
monetary and time savings
through the streamlined
movement of trade goods
across the world’s borders.
This study predicted that
full implementation of the
TFA would reduce members’
trade costs by an average
of 14.3%, with developing
countries having the most
to gain.
And the glorious big-buck
promise from the WTO
economists is that the TFA
has the potential to increase
global merchandise exports
by up to the equivalent of
R13.73 trillion at the current
dollar/rand exchange rate.
Now what
does this
mean for SA
in particular
and Africa in
general – a
collection
of countries
that are all
categorised
as either
developing
countries
or leastdeveloped
countries (LDCs)?
According to cross-border
transporters and traders
who have talked to FTW,
the fatal flaw is that border
posts across the continent
are bedevilled by utter
inefficiency and blatant
corruption. With this, said
some, the monetary and
time-saving promises of the
TFA are likely to be eaten up
by these failings. And one
authoritative source even
suggested that SA was not
likely to add its signature to
the ratification document.
But the WTO is adamant
that the TFA takes this into
account.
A trade facilitation
agreement facility (TFAF)
was also created at the
request of developing and
LDC country members
to help ensure that they
receive the assistance
needed to reap the full
benefits of the TFA and to
support the ultimate goal
of full implementation of
the new agreement by all
members. (Information
on this is available at www.
TFAFacility.org)
But the World Economic
Forum (WEF) 2016 Global
Enabling Trade Report,
issued in conjunction with
the new public-private
partnership to support
trade-led development, the
Global Alliance for Trade
Facilitation (GATF), stated
that governments were
making slow progress in
improving the efficiency
of customs and border
procedures.
The carrot dangled before
these laggardly governments
is that the projected benefits
of the TFA are greatest in
developing and emerging
countries. Also that research
by the World Economic
Forum has suggested that,
in some economies, TFA
implementation could
trigger a 60% to 80%
increase in cross-border
sales by small and mediumsized
enterprises (SMEs).
INSERT
The fatal flaw is that
border posts across
the continent are
bedevilled by utter
inefficiency and
blatant corruption.