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Removing Trade Barriers In The Developing World

The World Economic Forum hosts the Global Alliance for Trade Facilitation with the Center for International Private Enterprise (CIPE) and the International Chamber of Commerce (ICC) in fulfilling its mission to tackle identified trade barriers. The Alliance is funded by the governments of the United States, Canada, and Germany.

The Alliance supports countries in implementing the World Trade Organization’s Trade Facilitation Agreement (TFA), which entered into force in February 2017. In voting for the landmark Agreement, WTO members realised its potential for driving inclusive economic growth while also recognising that some countries would require help in implementing all its provisions.

By cutting red tape, emphasising digitalisation, and delivering other best practices, Alliance projects empower businesses to trade more easily. More seamless, transparent, predictable processes also allow countries to better deploy scarce resources in safeguarding their borders and their people.

Micro, small and medium-sized enterprises (MSMEs), many of them women-owned, stand to benefit most from trade facilitation. Recognising the added global trade barriers faced by women, gender equality is core to every Alliance project.

“The world can be very complicated, and trade can be very difficult. When it comes to finding the right information, some MSMEs just can’t reach out – they are in mid-ocean. Trade facilitation changes will help everyone.”— — Sopha Soeng, General Manager, Sela Pepper Co Ltd., Cambodia

What’s the challenge with trade barriers in the developing world?

WTO members are reported to be on track to meet around 90% of their TFA commitments by 2030 but Ngozi Okonjo-Iweala, Director-General of the World Trade Organization, recently noted that ‘large gaps’ still separate least developed countries (LDCs) and land-locked developing countries from that level of fulfilment, urging more assistance.

Red tape at borders and cumbersome, manual processes continue to ramp up the time and cost of doing business and denying MSMEs – and their countries – the benefits of global trade.

Outdated processes also delay vital medical supplies from reaching people in need and causes food to become spoiled. The Alliance is engaged in supporting governments and businesses in implementing solutions to counter this unnecessary waste, bolstering food security, and improving health outcomes.

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Our approach to breaking through trade barriers.

The Alliance has developed a unique methodology aimed at being more effective in delivering aid for trade based on three principles:

Leveraging the expertise and insight of the private sector in actively contributing to overcoming trade barriersBuilding an operational structure which is agile and responsiveQuantitatively measuring the impact of work carried out on the ground

Additionally the Alliance has focused on pushing innovation through a number of initiatives including the hosting of the inaugural Trade Facilitation Innovation Days in partnership with the United Nations Conference on Trade and Development (UNCTAD) aimed at reinvigorating and reimagining ways of streamlining cross-border trade. The online initiative attracted almost 700 participants in over 100 countries, including trade facilitation experts, government officials, border agents, logisticians, academics, and other specialists.

Benefits of the removal of trade barriers

Specific improvements have already been seen in some countries. In Mozambique, the Alliance supported government agencies and the private sector in digitalising processes to speed up imports of childhood vaccines and rapid test kits for the early detection of HIV and malaria. Streamlining import processes also increases resilience against future adverse events.

And in Madagascar, just 36 hours before Cyclone Batsirai ripped through the island on February 5, 2022, the Alliance partnered with the National Center for Disaster Preparedness at Columbia University, the World Customs Organization (WCO), Madagascar’s National Office for Disaster and Risk Management (BNGRC), and Madagascar Customs, to organise a workshop on stress testing new Customs procedures designed to fast-track foreign emergency relief.

The Alliance is also collaborating with the International Plant Protection Convention (IPPC) Secretariat, supporting countries in adopting electronic phytosanitary, or ePhyto, certificate exchange through the IPPC ePhyto Hub. Replacing manual, paper-based procedures mitigates loss, error and fraud. It also slashes the time and cost of trade in agricultural products, while strengthening plant health protection and consumer safety.

“The Alliance has been a driver of the public-private interaction and has been a key factor in the strengthening of trust between the different trade actors in Colombia. These real, two-way discussions are the key to understanding the needs and wants of businesses and developing meaningful solutions.”— — Ingrid Diaz, Customs Director, Colombia Customs and Tax Administration (DIAN)

Get involved.

The Alliance is always interested in hearing from corporate partners in emerging markets. If your business can bring a solutions-oriented approach to facilitating trade in a particular region, we want to hear from you.

The Alliance is part of the Forum’s Platform for Shaping the Future of Trade and Investment. This platform modernizes international trade rules, national policies and behind-the-border trade facilitation strategies with the aim of reducing trade barriers and strengthening trade and investment flows globally, in a rules-based system for the benefit of all.

Companies can join the Alliance and contribute their resources, actively participate in projects run by the Alliance, and share their expertise.