Ad Hoc Expert Group Meeting on IntraAfrican Trade Facilitating IntraAfrican Trade 2122 March 2005, A

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Ad Hoc Expert Group Meeting on Intra-African
TradeFacilitating Intra-African Trade21-22
March 2005, Addis Ababa
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PRESENTATION OUTLINE

• Evolving definition and scope of trade
  facilitation
• Key issues of trade facilitation
• Trade facilitation initiatives in Africa
• Trade facilitation in a multilateral framework
  challenges to African countries
• Way forward

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Evolving Definition and Scope of Trade
Facilitation

• Logistics of moving goods through ports or
  documentation associated with cross-border trade
• Environment in which trade transaction takes
  place
• Transparency of customs, regulatory agencies
• Harmonisation of standards, conformity with
  international and regional regulations
• Natural barriers to trade
• Non-tariff barriers

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KEY ISSUES OF TRADE FACILITATION

• High transport costs
• Complicated customs procedures
• Inadequate usage of information and communication
  technology
• Payments, insurance and other financial
  requirements
• International trade standards

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HIGH TRANSPORT COSTS
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CONTRIBUTING FACTORS TO HIGH TRANSPORT COSTS IN
AFRICA

• Inadequate infrastructure network
• Inefficient transport services
• Multiplicity of rules governing international
  transportation of goods
• Numerous roadblocks

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• VARIATIONS IN TECHNICAL STANDARDS FOR VEHICLES
  HAMPER MOVEMENT OF GOODS

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ROADBLOCKS ARE A MAJOR OBSTACLE TO TRADE IN AFRICA
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CUMBERSOME CUSTOMS AND ADMINISTRATIVE PROCEDURES
HAMPERS TRADE EXPANSION

• Excessive documentary requirements
• Insufficient use of automated systems
• Lack of transparency, predictability and
  consistency
• Lack of cooperation among customs and other
  governmental agencies
• Separated border posts, differences in working
  hours, visa requirements for transport crew
  members
• New maritime security measures

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INSUFFICIENT USE OF ICT INCREASES TRADE
TRANSACTION COSTS

• Telecommunication services are inadequate,
  inefficient and very expensive
• Strong linkage between customs delays and
  telephone charges and internet distribution
• Botswana and Namibia 4 days delay 4.8 and
  4.28 per 3 minutes international call
  respectively
• Ethiopia and Cameroon 30 and 20 days delays
  7.44 and 7.7 per 3 minutes international calls
  respectively
• Low level of awareness of e-commerce
• Insufficient physical infrastructure
• Deficient electronic transaction infrastructure
• Inadequate legal and regulatory framework

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Mobile Telephone and Internet connectivity in
African RECs
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INEFFICIENT INTERNATIONAL PAYMENT MECHANISMS
RESULT IN LONG DELAYS

• Documentary credit is the most popular
  international payment system in Africa
• Half of all payment requests are rejected because
  of documentary inconsistencies.
• High insurance premiums for African countries
• Customs guarantee payments represent a high cost
  for transport operators
• Multiplicity of currencies and exchange rate
  arrangements

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MULTIPLICITY OF INTERNATIONAL TRADE STANDARDS
CONSTITUTE A BARRIER TO TRADE

• Standards have potential to substitute tariffs
  and quantitative restrictions
• Standards impose higher production costs for
  firms in developing countries
• EU standards on agricultural products are of
  great concern to Africa

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EFFORTS TO FACILITATE TRADE IN AFRICA

• Efforts at sub regional level
• Several RECS have trade facilitation programmes
• Bilateral cooperation
• Several bilateral agreements exist
• Cameroon has signed conventions with Chad and
  CAR special facilities provided to landlocked
  countries at seaports
• Efforts at country level - One stop shops
• Efforts by international organisations
• Corridor management committees
• Observatories of abnormal practices
• Joint border posts

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Trade Facilitation measures in COMESA, ECOWAS
and CEMAC
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TRADE FACILITATION IN A MULTILATERAL FRAMEWORK
Challenges to African countries

• Impact of WTO rules on existing TF obligations
• Establishing which African TF rules and
  regulations relate to GATT Articles V,VIII and X
• Feeding existing African obligations into WTO
  rules

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THE WAY FORWARD

• 1. Strengthen Africas infrastructure network to
  support international trade
• 2. Improve the efficiency of transport services
  by
• 3. Remove illegal roadblocks
• 4. Speed up customs and border crossing
  procedures
• 5. Promote the use of new technology
• 6. Strengthen regional initiatives
• 7. Reduce negative impact of multiplicity of
  standards

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Thank you!