Working together to make trade faster and more transparent
Title: Alliance for Trade Facilitation Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ) Country: Global Overall term: 2019 to 2021
Cross-border trade stimulates economic growth. It is therefore in the joint interest of business and governments to reduce trade barriers. Many developing countries and emerging economies are greatly encumbered by trade constraints resulting from complicated customs documents and border procedures that lack transparency. On top of this, the high cost of managing and monitoring the transaction of goods makes it even more difficult for the local economy to access global markets. International companies thus have little incentive to invest and create jobs in countries with an unfavourable trade and investment climate.
In 2013, aiming to make the international movement of goods more transparent and straightforward, members of the World Trade Organization (WTO) concluded a Trade Facilitation Agreement. The Agreement has huge potential. It could reduce global trade costs by up to 17 per cent, with a corresponding positive impact on employment and poverty reduction. In order for this to succeed, close cooperation between policy-makers and business is required.
The cross-border movement of goods in developing countries and emerging economies is faster and more efficient.
The German Alliance for Trade Facilitation and the Global Alliance for Trade Facilitation bring together companies, associations and governmental institutions to work on implementing the WTO Agreement, combining development cooperation goals with the interests of business.
In the alliances, the partners are working on implementing trade facilitation measures. The projects conducted by the alliances are leading to a measurable reduction in the time required for customs procedures and the movement of goods. The reduction of transaction costs benefits international companies and, above all, the partner countries themselves. Local suppliers are strengthened and integrated into global supply chains, thus boosting the development of new markets. The alliances therefore make a significant contribution towards the implementation of the WTO Trade Facilitation Agreement and the 2030 Agenda. Together, the two alliances are implement-ing projects in more than 20 countries worldwide.
The projects that the alliances have completed show measurable results. In Montenegro, for example, the volume of express goods reaching the end customer on the day they arrive in the country has now doubled. This has inspired other Western Balkan countries to introduce similar customs reforms.