Global Alliance for Trade Facilitation

Project description

Title: Global Alliance for Trade Facilitation
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Global
Overall term: 2015 to 2018

Global Alliance for Trade Facilitation. Container crane © shutterstock

Context

Many developing countries and emerging economies are greatly encumbered by trade constraints resulting from red tape in the form of complicated customs documents, import surveillance and border procedures that lack transparency. High transaction costs make it difficult for them to tap into global value chains and make businesses less competitive. Many enterprises are thereby denied opportunities to grow through trade. Countries with an unfavourable trade and investment climate are not attractive for investment.

In 2013 members of the World Trade Organization (WTO) concluded negotiations on a Trade Facilitation Agreement with huge potential. If implemented successfully, global trade costs could fall by 12.5 to 17.5 per cent, with a correspondingly positive impact on poverty reduction and employment. Measures to facilitate trade play an important role across a variety of policy areas and sectors. They have a positive effect on food security, rural development, consumer protection, investment promotion and good governance among others.

Germany and other industrialised countries have undertaken to support implementation of the Agreement in developing countries. It is vital to cooperate with the private sector and leverage the extensive expertise of companies if the Agreement is to be successfully put into practice. Global efforts to mobilise the business community have so far often been fragmented, and awareness of trade facilitation measures remains weak.

Objective

Selected governments are better able to implement trade facilitation measures by working with the private sector.

Approach

The Global Alliance for Trade Facilitation seeks to leverage business expertise and to work with partner countries and the private sector to implement reforms that will facilitate trade. The projects undertaken give rise to development benefits due to reduced trade costs and better market access.

The Global Alliance is supported by the USA, Canada, the UK, Australia and Germany and also by international companies. The World Economic Forum (WEF), the International Chamber of Commerce (ICC) and the Center for International Private Enterprise (CIPE) form the Alliance secretariat.

The global programme being implemented by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) is one of the Alliance’s implementation partners. The programme focuses on carrying out trade facilitation projects in developing and emerging markets in cooperation with businesses, associations and chambers of industry and commerce, as well as customs authorities and ministries. The goal is to streamline and lower the costs of customs processes within the framework of the WTO Agreement – for example, by introducing binding tariff information and electronic pre-arrival procedures.

The activities at global level are complemented by an alliance in Germany between private sector representatives, German Government ministries and GIZ that aims to implement trade facilitation measures in developing countries and emerging economies. The partners pool their expertise and resources in order to promote cooperation and knowledge sharing with regard to existing trade bottlenecks. Together they are devising solutions to reduce the costs of international goods trade both for businesses and for developing countries and emerging economies.