Transcript TRADE FACILITATION - Ethiopia Commodity Exchange

Regional Integration and Trade Facilitation
Joseph Atta-Mensah
Regional Integration, Infrastructure and Trade Division (RITD)
United Nations Economic Commission for Africa
Ethiopia Commodity Exchange –
UNDP Knowledge Forum
24 February 2010, Addis Ababa, Ethiopia
PRESENTATION OUTLINE

Evolving definition and scope of trade
facilitation
 Key issues of trade facilitation
 Trade facilitation initiatives in Africa
 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
 Harmonization of standards, conformity with international
and regional regulations

Natural barriers to trade

Non-tariff barriers
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Regional Economic Communities
(RECs)
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Considered by the African Union as the building blocks of the
African Economic Community within the context of an African
Common Market

8 are seen by the AU as the main pillars namely:
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Arab Maghreb Union (UMA)
Common Market for East and Southern Africa (COMESA)
Community of the Sahel-Saharan States (CENSAD)
East African Community (EAC)
Economic Community for Central African States (ECCAS)
Economic Community for West African States (ECOWAS)
Inter-Governmental Authority on Development (IGAD)
Southern Africa Development Community (SADC)
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Evidence of weak Intra-African
Trade
REC
Intracommunity
Rest of
Africa
EU
US
Others
CEMAC
1.9
2.2
41.2
30.5
24.2
COMESA
6.0
8.2
39.3
20.8
25.7
EAC
18.1
12.4
40.5
3.6
25.4
ECCAS
1.9
2.5
45.2
27.7
22.8
ECOWAS
10.3
2.9
39.0
26.1
21.8
SADC
12.8
4.6
26.6
14.0
42.0
Africa
6.8
5.8
49.7
15.1
22.7
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Marginalisation in the Globalisation
Process
 Volume of goods across borders has increased exponentially in
recent years: 50 times higher in 1999 than in 1960
 Africa has failed to benefit from
trade
steady increase in international
 In 1950, Africa delivered 10% of world exports, by 2000 this share
had declined to <3%
 Situation worse in sub-Saharan Africa whose share of world
exports of goods and services is < 1.5%
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KEY ISSUES OF TRADE FACILITATION
1.
2.
3.
4.
5.
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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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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CUMBERSOME CUSTOMS AND
ADMINISTRATIVE PROCEDURES HAMPERS
TRADE EXPANSION
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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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Industrial
ec.
Asia
Transition
ec.
W.Europe
L.America
SSA
14
12
10
8
6
4
2
0
Africa
Days
AFRICAN CUSTOMS HAVE THE LONGEST DELAYS
IN WORLD
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INSUFFICIENT USE OF ICT INCREASES
TRADE TRANSACTION COSTS
•
Telecommunication services are inadequate, inefficient and
very expensive
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Strong linkage between customs delays and telephone
charges and internet distribution:
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•
Botswana and Namibia: 4 days delay; $4.8 and $4.28 per 3 minutes
international call respectively
•
Ethiopia and Cameroon: 30 and 20 day 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
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Mobile Telephone and Internet connectivity
in African RECs
RECs
Cellular
subscribers per
100 people
Internet users per
10,000 people
CEMAC
5.2
21.8
COMESA
5.8
35.0
IOC
15.6
115.5
SACU
11.3
490.5
SADC
10.1
147.1
UMA
5.2
129.3
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INEFFICIENT INTERNATIONAL PAYMENT
MECHANISMS RESULT IN LONG DELAYS
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Documentary credit is the most popular international
payment system in Africa
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Half of all payment requests are rejected because of
documentary inconsistencies.
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High insurance premiums for African countries
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Customs guarantee payments represent a high cost for
transport operators
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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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ONGOING EFFORTS TO FACILITATE
TRADE IN AFRICA

Efforts at sub regional level
 Several RECS have trade facilitation programmes
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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
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Efforts by international organizations
 Corridor management committees
 Observatories of abnormal practices
 Joint border posts
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Probable and Unique Regional
TF Activities :
Creation of Knowledge Networks

Questions that can be addressed through creation of
Knowledge Networks as rightly stated amongst themes
of this Knowledge Forum are:
 How can markets be appropriately developed to transform
the African primary commodities sector?
 What are the prospects for commodity exchanges in Africa?
 How can commodity exchanges be regionalized or
contribute to regional trade?
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Observatories could also play an important role in that
regard
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THE WAY FORWARD ON TRADE
FACILITATION
1. Strengthen Africa’s infrastructure network to support
international trade
2. Improve the efficiency of transport services
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!
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