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TRADE FACILITATION CONCEPT AND SCOPE In its narrowest sense, trade facilitation refers to the reduction of the trade costs associated with moving goods across borders.
A broader interpretation encompasses all Non-Tariff Barriers [NTBs] to trade, including behind the border costs associated with the institutional and business environment, services in support of trade, and physical infrastructure in transport, energy and ICT.<br>
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TRADE FACILITATION CONCEPT AND SCOPE More recent definitions have been broadened to include the environment in which trade transactions take place, that is, the transparency and professionalism of customs and regulatory environments.
It also entails the harmonization of standards and conformity to international or regional regulations.<br>
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TRADE FACILITATION CONCEPT AND SCOPE Trade facilitation according to the WTO refers to the avoidance of unnecessary trade restrictiveness.
To achieve this, economies are applying modern techniques, standards and technologies, while at the same time improving the quality of control in an international harmonized manner<br>
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TRADE FACILITATION AGREEMENT It is the first multinational Trade Agreement to be concluded since WTO was formed 20years ago.
Trade facilitation came into force on 22nd February, 2017 when WTO obtained acceptance of the agreement from 2/3 of its 164 members.
153 members [including Nigeria] have ratified the trade facilitation Agreement. Nigeria ratified on 16th January, 2017.
About 32 African Countries have ratified the agreement.<br>
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OBJECTIVES OF THE TRADE FACILITATION AGREEMENT It has the following objectives:
Ease the flow of goods across borders
It will reduce trade cost by more than 14% in low income countries and 13% in upper-middle income countries.
Export requires 2-11 documents and could take between 6-86 days; import requires 2-17 documents and could take between 4-130 days.<br>
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KEY COMPONENTS OF TRADE FACILITATION PROCESS OPTIMISATION
COST REDUCTION
TRANSPARENCY
INTER-AGENCY COOPERATION ENHANCEMENT
DIGITIZATION
FACILITIES AND INFRASTRUCTUREE
QUALITY OF INSITUTIONS<br>
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PROCESS OPTIMISATION Prearrival Processing: ability to lodge, submit, register or check the goods declaration and supporting documents before the arrival of the consignment.
Fast tracking should work 24/7 at all customs locations and away from customs offices.
The Trade facilitation agreement requires WTO members to establish such special infrastructure facility.
Release upon Arrival: Customs can release goods prior to submission of goods declaration provided that the declaration will subsequently accomplish all formalities.
Prioritization: Customs and border agencies must give priority to clearance of relief materials, export, transit cargo etc.<br>
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RELAXING PROCEDURES There may be need to drop some requirement to expedite speedy clearance of cargo.
Simplification of Goods Declaration
Minimizing requirement: for example, reducing documentation requirement to speed up release of expedited shipments.
Flexibilities regarding inspection with better use of discretion and removing rigidities in the inspection.
Acceptance of copies; paper or electronic copies of required documentation. There may be request for signal documents if there is need to do so.
Risk Management: low risk consignment should be cleared expeditiously while high risk cargoes may attract a more rigorous scrutiny.<br>
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TRANSPARENCY AND INTER AGENCY CO-OPERATION Provision of adequate information on all imports and trade processes online to remove any form of uncertainty.
Strengthening co-operation among agencies and promoting harmonization in inspections.
Discontinue the silos mentality of government agencies.<br>
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TECHNOLOGY ADOPTION<br>
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UNCTAD SUPPORT FOR TRADE FACILITATION UNCTAD offers technical assistance in the following areas:
General Trade Facilitation Assistance
Support for National Trade Facilitation Committee
ASYCUDA Programs
Port Management Programs
Transit and Corridor Solutions
Non- tariff Measures Program<br>
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POLICY ANGLE TO TRADE FACILITATION [FOREX MANAGEMENT] Foreign Exchange Policy is critical to Trade facilitation. This is a Nigerian peculiarity which we need to acknowledge.
NXP Challenges and Forex Policy
Liquidity Challenges in the Forex Market
Forex Rationing
Transparency issues in allocation
Forex Exclusion list<br>
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Trade Facilitation[Infrastructure Issues] Lack of Scanners – Physical Examination of Cargo
Adequacy of Cargo Handling Equipment
Frequent Breakdowns of servers
Access Roads to the Ports
Quality of ICT facilities<br>
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INSTITUTIONAL ISSUES IN TRADE FACILITATION MULTIPLICITY OF AGENCIES AT THE PORTS
TOO MANY DISCRETIONARY POWERS
EXCESSIVE FOCUS ON REVENUE GENERATION AS KPI
CORRUPTION
CAPACITY ISSUES, ESPECIALLY IN THE TECH SPACE
DISPUTE RESOLUTION CHALLENGES, ESPECIALLY WITH CUSTOMS.<br>
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REFORM IMPERATIVES [DISPUTE RESOLUTION MECHANISM] Creation of credible dispute resolution framework to resolve disputes between the following:
The Nigeria Customs Service and the Exporters
The Terminal Operators and the Exporters
The shipping Companies and the Exporters<br>
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REFORM IMPERATIVES [TECHNOLOGY ADOPTON] Technology driven cargo clearance processes
Complete Single Window
Elimination of Human Interface
Use of Scanners
Discontinue physical Examination of Cargo
Strengthen Institutional ICT Capacity of Customs or Outsource<br>
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Reform imperatives [Prioritizing Exports] Shipping companies should accord better priority to Exports
Terminal Operators should give better priority to Exports.
Export Terminals should be created at all ports.
Fast track channel to the ports for exports<br>
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REFORM IMPERATIVES [STREAMLINING PROCESSES] Rationalization of Agencies involved in cargo clearance process
Reduction in documentation
Audit of Documents to determine relevance<br>
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REFORM IMPERATIVES [TARIFF & TRADE POLICY REVIEW] Tariff Reform
Tariff rates need to be reviewed.
Tariff Regime generally too high.<br>
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REFORM IMPERATIVES [DISCRETIONARY POWERS] Elimination of discretionary powers by officials of Customs
Respect for processes and the need for SOPs
Respect for hierarchy in the Customs Cargo clearing process<br>
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REFORM IMPERATIVES [POLICY ALIGNMENT] Need for Alignment between Forex Policy and Trade Policy
Need for Consultation with relevant Ministries, NEPC
Industry ,Trade and Investment, Finance, NIPC
Need for proper impact Analysis of Forex Policy on Trade<br>
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REFORM IMPERATIVES [TRADE INFRASTRUCTURE] Infrastructure issues for better Trade Facilitation
Access Roads to the Ports
Rail link to the Ports
Rail link needed for dry Ports
Adequacy of Ports Infrastructure – Graft quality the Ports etc.<br>
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REFORM IMPERATIVES [TRADE FACILITATION AS CUSTOMS KPI] Need to Prioritize the Trade Facilitation Role of the Nigeria Customs Service
Currently relegated with focus on revenue generation role
The Customs KPI Should reflect this<br>
