East African Community: Non-Tariff Barriers & Trade Facilitation

 

Executive Summary

 

Trade facilitation, or the simplification and harmonization of trade processes, has emerged as a vital element in the effort to stimulate global economic development. Simplification and harmonization of trade processes play a key role in the elimination of Non-Tariff Barriers (NTBs), reducing the cost of cross-border activities and helping states reap the benefits of international trade. NTBs have a particularly significant impact on Small and Medium-Sized Enterprises (SMEs), especially those in developing and least-developed countries (LDCs). The limited resources of these organizations mean they are more vulnerable than larger businesses to the added costs and administrative burdens that arise from NTBs. In recognition of these issues, World Trade Organization (WTO) Members negotiated the Trade Facilitation Agreement, the purpose of which is to “promote the simplification, modernization and harmonization of export and import processes.” This Agreement entered into force in February 2017 following its ratification by two-thirds of the WTO membership. In essence, the Agreement aims to cut, in its various forms the “red tape” that hampers the movement of goods across borders and thereby reduce the time and costs associated with the exporting and importing of goods. It is estimated that the implementation of the TFA will reduce trade costs by an average of 14.3% and boost global trade by up to $1 trillion per year, with the biggest gains accruing to the LDCs. The Agreement was also ground-breaking due to the innovative way it permits developing countries and LDCs the freedom to determine the timing for the coming into force of their commitments under the Agreement.

 

 Students, Tristan McLeod and Isabella Mira, presenting their research and findings (above).

 

 

It is within the context of these global trade issues and developments that the University of Ottawa and Queen’s Trade Law Practicum Team (the Team) undertook this project to assist the East African Community (EAC), the Team’s beneficiary, in its efforts to eliminate regional NTBs and simultaneously assist states in the Tripartite Free Trade Area (TFTA) in meeting their obligations under the Trade Facilitation Agreement (TFA). The Team was keen to ensure that it would deliver an excellent end product capable of providing practical value to the EAC in achieving its goals. We therefore devoted our time at the outset of the project to understanding the cross-border trade issues facing TFTA traders. Once we had satisfied ourselves that we were sufficiently well versed about this aspect of the project, we turned our efforts to determining the form and attributes of a suitable deliverable for the EAC. This report and the accompanying documents comprise that deliverable and represent the culmination of our work.

 

The project focuses on tradebarriers.org (the Website), an online reporting tool used by the EAC and its trade partners(1) to identify and address NTBs encountered by traders in the TFTA. After thoroughly reviewing the Website’s content and functionality, consulting with trade facilitation experts at the WTO and elsewhere, and discussing our findings with the EAC Secretariat, the Team identified several ways in which the tool could be improved and devised a three-part project directed at addressing these shortcomings. Specifically, the project seeks to expand the scope and utility of the Website by making it a “one-stop-shop” for trade-related information, and by linking the resolution of NTB complaints to legal obligations under the TFA. The components of the project are as follows:

 

Complaint Management Framework: The Team created a two-part framework that (i) facilitates the accurate and consistent categorization of traders’ complaints within the Website’s NTB Classification System (NCS), and (ii) identifies which TFA obligations, if any, are implicated by each complaint. The former ensures that NTB information is accurately reported so that it can be more readily addressed by relevant authorities, while the latter links complaint resolution to legal obligations under the TFA and assists government agencies in fulfilling their mandates under that agreement. As a necessary first step, the Team created descriptions and objective criteria for the NTB subcategories found on the website, so that website users will be able to determine under which NTB they should log their complaint. (Currently, NTB subcategories are not described or defined, which las led to inaccurate filing of complaints under incorrect NTB subcategories.) This will enable more efficient resolution of NTB-related trading problems. Ultimately, this part of the project should create the most value for the EAC because it emphasizes the importance and relevance of trade facilitation to states in the TFTA, and grounds the resolution of complaints in binding legal obligations.

 

Given the significant amount of work required for this part of the project (i.e. a two-part framework for each of the 81 categories of NTBs found in the website), it was not possible to complete this component of the project during the single academic semester available to TradeLab students. (The Team designed and then completed the framework for 23 subcategories.) Therefore, the EAC may wish to engage another researcher or another TradeLab team to complete the framework for the remainder of the NTB subcategories. Recognizing that TFA obligations will only arise in a subset of NTB complaints, the EAC may wish to consider asking future researchers or TradeLab teams to go further and associate the Website’s NTB categories with other WTO agreements (e.g. the Agreement on Technical Barriers to Trade and the Agreement on the Application of Sanitary and Phytosanitary Measures) in addition to the TFA.

 

Website Index: The Team created an index of hyperlinks (the Index) for the Website that directs users to the websites of relevant government agencies of states in the TFTA. These links will enable users to have access to trade information, such as tariff rates, prohibited goods, document requirements and licensing procedures. In the time available, the Team was able to index the agency websites of five TFTA states, namely: Botswana, Kenya, Lesotho, Rwanda and Uganda. If this component is found useful, the EAC may wish to have the Indexing of the remaining TFTA states taken up by other researchers or future TradeLab teams. This aspect of the project will improve users’ access to information and furthers the purpose of the TFA’s publication obligations.

 

Transition Package: As the scope of the project expanded, it became clear that the Team did not have the resources to complete each component of the project in the two remaining months of its academic year. The Team developed a guide for future research teams highlighting its methodology, strategies and suggestions, to facilitate seamless transitions between future teams. To implement the recommendations of this report, the EAC will need to engage someone familiar with website development to input the new information provided herein (e.g. add links, NTB descriptions, adjust information) as well as a data scientist to develop and program the Complaint Management Framework. We understand, based on consultations with an expert, that this would not be overly complicated or costly. It would also be useful to conduct an awareness campaign to inform users and relevant government officials about the changes made to the Website, the reasons for making them, and the benefits anticipated in using the revised system. It may be possible to obtain assistance from the WTO or Non-Governmental Organizations (NGOs) to fund and/or undertake these activities.

 

 

(1) The trade partners of the EAC and contributors to the website are the Southern Africa Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA).

 

 

The full report can be read and downloaded here

Please reload

Recent Posts

Please reload

Archive

Please reload

Tags