Development and building trade capacity
Recommendations
LLDCs are a very special group of countries which face very atypical constraints. To address these challenges will require special measures to more fully integrate LLDCs into the multilateral trading system. This report has identified some of the areas and issues where targeted steps need to be taken to ease trade bottlenecks – not only by the LLDCs themselves but also transit countries and organizations involved. The paucity of up-to-date data and the difficulties to collect it from some of the remotest areas of the world make it hard to capture all the factors comprehensively and accurately.
Foreword by Director-General Ngozi Okonjo-Iweala
Among the outreach activities I have undertaken since becoming Director-General have been very detailed and substantive meetings with landlocked developing countries (LLDCs). They have told me how the particular barriers they face due to a lack of territorial access to the sea and isolation from the world’s largest markets restrict the free flow of trade and impose constraints on their socio-economic development. The COVID-19 pandemic has been especially damaging to their fragile economies which has brought new challenges such as container shortages high shipping costs and the closure of borders to stop the spread of COVID-19. In response I requested the WTO Secretariat to conduct this study on the logistical constraints impacting the trade performance of LLDCs and how trade bottlenecks could be reduced. I am very happy that the study has been produced in such a short time.
WTO’s Trade Facilitation Agreement
The TFA contains several provisions for expediting the movement release and clearance of goods including goods in transit and easing trade bottlenecks at borders. It sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. A key pillar of the TFA is a series of provisions for technical assistance and capacity building (TACB). Entering into force on 22 February 2017 all 26 LLDCs who are WTO members have completed their domestic ratification process.
Landlocked developing countries and trade bottlenecks
Trade is critical to the economic growth of countries which means facilitating trade is a priority for governments. Landlocked developing countries (LLDCs) are without direct territorial access to a sea or ocean so ease of trade is linked to their survival.
WTO’s TBT Agreement: technical barriers to trade
The WTO’s TBT Agreement entered into force with the establishment of the WTO on 1 January 1995. It aims to ensure that product requirements in regulations and standards (on safety quality health and the environment) as well as procedures for assessing product compliance with such requirements (certification testing inspection accreditation) are not unjustifiably discriminatory and do not create unnecessary obstacles to trade.1 The TBT Agreement also emphasizes the importance of transparency and contains disciplines that strongly encourage the use of international standards as a basis for harmonizing regulations across WTO members.
WTO’s SPS Agreement: sanitary and phytosanitary measures
The WTO SPS Agreement sets out the basic rules for food safety and animal and plant health standards. It aims to strike a balance between WTO members’ rights to protect human animal or plant life or health and their obligation not to restrict trade more than necessary. Given the technical and costly nature of some of these measures certain sanitary and phytosanitary (SPS) requirements imposed by importing members could be difficult to meet for LLDCs for whom agricultural products might represent an important part of their exports.
COVID-19 and border measures
Countries have put in place a range of restrictions on the movement of persons across borders especially for non-essential purposes as well as export prohibitions on essential goods and food. There has been a proliferation of measures banning the export of essential medical supplies as well as food paired with measures to facilitate the import of the same types of product (i.e. value added tax and import duty exemptions).
Trade profiles of landlocked developing countries
Trade plays a critical role in achieving the development objectives of LLDCs and is key to realizing the Sustainable Development Goals (SDGs) in particular target 17.11: significantly increase the exports of developing countries.
The effect of COVID-19 on the economies of Africa
On 14 February 2020 Africa confirmed its first COVID-19 case in Egypt. To date over 1 million cases have been reported and there have been cases in every country on the continent. A study in May 2020 from the WHO Africa Regional Office posited that within the first year of the pandemic between 83000 and 190000 deaths and 5 million related hospitalizations could occur and a further 29 to 44 million people could be infected if containment measures failed (WHO Africa 2020). As of 1 December 2020 a total of 2179843 COVID-19 cases and 51915 deaths had been reported in 55 African countries. This makes up 3.5 per cent of all cases reported globally (Africa CDC 2020).
Aid for Trade
Launched during the 2005 WTO Ministerial Conference which was held in Hong Kong China the WTO-led Aid for Trade initiative aims to help developing countries particularly LDCs build the supply-side capacity and trade-related infrastructure that they need to implement and benefit from WTO agreements and more broadly to expand their trade. The Aid for Trade Global Review which usually takes place biennially provides a platform to examine how developing countries and in particular LDCs can better utilize market access opportunities through targeted Aid for Trade; how this aid is assisting their integration into the global economy; how development partners are helping in this process; and above all the effectiveness of this support.
Introduction
The multilateral trading system overseen by the WTO has contributed significantly to the unprecedented economic development that has taken place over the last decades across the world. Trade has allowed many developing countries to benefit from the opportunities created by emerging new markets by enabling them to integrate into the world market through global value chains. Moreover the unbiased predictable and non-discriminatory regime maintained by the multilateral trading system places all economies – developing and developed small and large – on an equal footing.
Executive summary
The multilateral trading system overseen by the WTO has helped to spur economic development for both developing and developed economies by creating a more predictable fair and transparent trading system that encourages investment and industrialization.
Implementation of the Trade Facilitation Agreement
There is widespread agreement among trade and development experts that tackling the high trade costs of African countries is of utmost importance in achieving their greater integration into world trade and global value chains. Lowering trade costs is crucial for increasing competitiveness and ensuring economic development in Africa.