Global business emphasises opportunity TFA ratification brings to Africa at WTO’s 20th anniversary in Marrakech

Welcoming Ministers from African nations, the Prime Minister of Morocco and representatives from the World Bank, TradeMark East Africa and the International Road Transport Union (IRU), the World Trade Organization celebrated its 20th anniversary in Morocco. The event marked the birth of the WTO in Marrakech in 1995 and gathered African Parliamentarians to discuss the benefits of the WTO’s Trade Facilitation Agreement for Africa’s economic growth and trading future.

The event targeted parliamentarians from more than 20 African countries, including Burkina Faso, Cameroon, Cote d’Ivoire, Ghana and Kenya, as in many countries parliament plays a key role in the TFA Protocol’s ratification process. The TFA has the potential to deliver an unprecedented stimulus to the world economy with a boost of US$1 trillion. Thus far only Hong Kong, US, Singapore and Mauritius have ratified the TFA while 107 ratifications are needed for the TFA to enter into force. In his opening remarks, WTO Director General Roberto Azevedo identified the TFA as a momentous opportunity for African countries as trade costs in Africa are still 30% higher than the global average.

Donia Hammami, ICC Policy Manager, spoke on the benefits of the TFA for Africa from a business perspective – emphasising the TFA’s ability to boost countries’ competiveness. Noting that Africa only accounts for less than 3% of world trade, Ms Hammami said: “More efficient, transparent, and predictable border procedures will create an enabling environment for cross-border trade and investment resulting in significant benefits for countries and businesses of all sizes but most notably for small- and medium-sized enterprises (SMEs).”

“SMEs are the backbone of the global economy but they are disproportionately affected by complicated customs procedures. Improved border measures could trigger a 60% to 80% increase in cross-border SME sales in some countries. Many politicians spend lots of time discussing a 5% reduction in tariffs in trade agreements, while ignoring that shipping costs are frequently as high as 70% of the value of exports in some emerging markets due to inefficient border crossings.”

SMEs are the backbone of the global economy but they are disproportionately affected by complicated customs procedures. Improved border measures could trigger a 60% to 80% increase in cross-border SME sales in some countries.

In its ongoing global advocacy work, ICC has highlighted the importance of a harmonized approach to TFA implementation. Underlining that 85% of the TFA articles are to be implemented by customs agencies, Ms Hammami said: “We should not reinvent the wheel and make use of trade facilitation tools and instruments that are already available. ICC therefore very much welcomes the World Customs Organization Mercator Programme that pulls together the necessary guidance for a unified approach to implementation.”

ICC encouraged the parliamentarians to move forward in creating national committees on trade facilitation as stipulated in the TFA. “Such committees should include customs and business representatives – in the end it is all about understanding business models to remove barriers to trade and to raise national competiveness”, said Ms Hammami.

Learn more about the ICC World Trade Agenda.

Learn more about the Commission on Customs and Trade Facilitation.