Trade Facilitations

The Bali Trade Facilitation Outcomes and the Road Ahead

The 14th EAC Geneva Forum was held on January 29th 2014 where country updates notes provided by the EAC capital-based partners on “Implementation of the Trade Facilitation Agreement from the EAC stakeholders’ perspective” were discussed. An issue paper was also provided on the “9th Ministerial Conference: Trade Facilitation Outcomes and the Road Ahead”. Delegates’ interventions focused on the post-Bali agenda.

Country Update Notes

In the EAC, an EAC level needs assessment has been carried out with regards to the WTO Trade Facilitation Agreement. Some of the EAC countries, such as Kenya and Burundi, have also country-specific Trade Facilitation (TF) needs assessments that have been undertaken and others, such as Tanzania and Uganda, have expressed the need for one to determine which Trade Facilitation Agreement Category the different measures should be confined to and what are the exact benefits and costs of implementation.

Each of the EAC countries has some TFA measures that have already been fully complied with, meaning that these can easily be classified into the TFA category A, and which are designate for implementation by developing and LDCs upon entry into force of the Agreement. According to current indications, it seems like most of the measures that need to be implemented will be categorised into categories B and C, category B providing a transition period for implementation and category C measures allowing for transition time as well as acquiring capacity to implement the measures through provisions of technical assistance to them.

The EAC stakeholders highlighted some opportunities that implementing the TFA will bring to their countries. Some of the most important were boosting competitiveness of the manufacturing sector through increased possibilities for value addition; reduction of trade transaction costs, particularly for the land-locked countries; modernization of facilities and higher revenue collection that will come about making trade transactions easier and thus increasing trade; increased intra-EAC trade; as well as additional resources for capacity building.

The challenges highlighted were lack of information to the private sector and need for sensitation and awareness raising workshops in Rwanda; Tanzania is concerned that TFA implementation may divert public investments from more vital sectors and implementation with the requirement of participation of many stakeholders is tedious and expensive; low capacity of representation of Burundi at the WTO as well as a need to change many laws before the TFA can be implemented; lack of political will to implement the TFA and also need of a legal/policy action on at least 23 TF obligation before they can be implemented in Kenya; Uganda also highlights heavy costs associated with implementation and they find the ‘best endeavour’ language in the TFA problematic.

The country-based stakeholders recommend to the Geneva Ambassadors to closely engage the capital-based stakeholders for coherent responses (Burundi); facilitate the access to capacity building and technical assistance support for category C (Rwanda and Kenya); creating conductive environments for cooperation with the private sector; making clear to the capital-based government officials that implementation is conditional upon capacity to do so (Uganda); assisting national government officials to carry out a thorough analysis of implications and obligations under each article of the Agreement and come up with a roadmap how to proceed with the transition effectively (Uganda); more efforts to be invested in addressing EAC-wide supply-side constraints for exporters.

Delegates’ Deliberations

During deliberations by the Geneva Delegates, the post-Bali talks were highlighted. The EAC delegates agreed that the most important stage is agenda-setting. It is important that agenda-setting in diverse groups, such as the LDC group, should be conducted from the beginning in a transparent manner by countries expressing their reservations on any agenda item in order to avoid surprises and breaking up the group at the end of negotiations. For the post-Bali agenda, some countries talk about services liberalization and plurilaterals. But the EAC countries take side with the WTO DG that has mentioned that to negotiate the DDR, there is no more room for cherry-picking issues. The important issues for LDCs in post-Bali agenda are agriculture, questions on export subsidies and trade-distorting subsidies.

The delegates also expressed their satisfaction with the impressive structure and involvement of stakeholders in the capitals to provide information to the Geneva-based delegates through the ‘country update notes.’ They highlighted the importance of involving particularly the private sector in the National TF committees to be established. With regards to lobbing for technical assistance for implementing the category C measures, the delegates have outlines that this work is done in the capitals and not in Geneva.

Specific requests and needs that were suggested to CUTS included: (i) How can CUTS help the EAC countries to prepare for the full implementation of the TFA in their countries? ; (ii) EAC fought for binding language in the TFA since the beginning. They are wondering if there is any way at this point to insert more binding language into the TFA and replace the ‘best endeavour’ language on assistance; a,d (iii) Can CUTS help the EAC to undertake becoming a recognized group at the WTO, so that the EAC Geneva Forum could turn into a formal forum for the EAC Ambassadors and delegates?