Trade Facilitation

The U.S. and East African business communities have placed a priority on improving trade facilitation in East Africa, which will reduce the cost and time to get goods to market and enhance opportunities for trade and investment. This interest is reflected in the Memorandum of Understanding (MOU) signed by The Corporate Council on Africa (CCA) and East African Business Council (EABC) in September 2013. To move forward with commitments under the CCA-EABC MOU, CCA launched a Trade Working Group in early 2014 to jointly develop recommendations with the EABC on trade facilitation. These recommendations were developed through consultations with the private sectors in both the United States and EAC and were presented at the U.S.-Africa Leaders Summit on August 4, 2014. 

The CCA Trade Working Group, which includes an expanding number of companies across sectors, has now shifted focus to concrete actions to implement the joint recommendations, working in collaboration with other business associations, Commerce, USTR and other private sector and government partners. As part of this implementation strategy, the Trade Working Group is focusing on issue areas such as customs and port administration, supply chain and agricultural value chain development, cold chain and digital trade that are common priorities among companies. The private sectors in both the United States and East Africa have expressed support for moving forward with these issues through a number of interrelated processes, including the Commercial Dialogue and U.S.-EAC Trade and Investment Partnership, WTO Agreement on Trade Facilitation (which is on track for implementation) and renewal of the African Growth and Opportunity Act (AGOA).

Improved trade facilitation will produce a number of benefits, including increased incomes, job creation and value addition along supply chains. Enhanced trade facilitation will also require addressing capacity challenges and improving transparency in regulatory systems, and both the private and public sectors can contribute skills and resources. Ultimately, trade facilitation will benefit producers of all sizes along supply chains, including producers of intermediate industrial components, which can significantly impact competitiveness in developing markets. Trade facilitation and customs automation are also central to agricultural development and food security, allowing for faster movement of sensitive goods like agricultural products (through reduced customs clearance times) that may otherwise often spoil before reaching markets.
 
In addition to creating opportunities and jobs in numerous sectors and linking African markets into global supply chains, improvements in trade facilitation are expected to increase country revenue and individual incomes, enhance economic gains for small- and medium-sized enterprises (SMEs), and reduce the costs of trade, with significant gains going to developing markets. According to the OECD, “for every one percent reduction in global trade costs, global incomes [will] go up by $40 billion.” Sixty-five percent of these gains would accrue to developing countries. [1] The World Bank estimates that every one dollar spent on trade facilitation in developing countries yields a return of 70 dollars.[2]


Download CCA's U.S.-EAC Private Sector Trade Facilitation Priorities Outline



[1] Overcoming Border Bottlenecks: The Costs and Benefits of Trade, Organization for Economic Cooperation and Development, 14 (2009), available at http://www.keepeek.com/Digital-Asset-Management/oecd/trade/overcoming-border-bottlenecks_9789264056954-en#
[2] Trade Facilitation, http://www.wto.org/english/news_e/brief_tradefa_e.htm (last visited 5 June 2014).