Trade facilitation agreement could cut trade costs by 15%

Unctad secretary-general, Mukhisa Kituyi.

Full implementation of the United Nations Conference on Trade and Development (Unctad) Trade Facilitation Agreement (TFA) could lead to a reduction in trade costs of up to 15% for African countries.

“The World Trade Organisation (WTO) calculates that current trade costs for developing countries are equivalent to applying a staggering 219% tariff on international trade, and this hurts Africa,” said Unctad secretary-general, Mukhisa Kituyi, speaking ahead of the first ever three-day African Forum for National Trade Facilitation Committees which kicked off in Addis Ababa today (Tuesday).

He said National Trade Facilitation Committees – a proviso of the TFA –

should be established to become the “agents of change to boost international trade for developing countries”.

“Correctly implemented trade facilitation measures not only boost trade but also improve revenue collection, safety and security compliance controls (for example, improving food safety) and can help to streamline government agencies,” said Kituyi.

He pointed out that such reforms helped small cross-border traders, often women, enter the formal sector, made economic activities more transparent and accountable and promoted good governance,

“But for these benefits to be realised it is essential that the Trade Facilitation Agreement is implemented as foreseen,” said Kituyi, commenting that according to the WTO, the rate of implemented commitments under the agreement as of October 2018 stood at 60%.

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