Trade Facilitation is the process of removing obstacles to the swift movement of goods across borders, thereby reducing the cost of trade and enhancing trade performance of the region.
The need for Trade Facilitation becomes apparent when one considers that Africa accounts for less that 2.5% of world trade. The level of intra-African trade is also low - 10%, compared to about 40% in North America and about 60% in Western Europe. Africa, moreover, ranks low on trade facilitation performance. In fact, 7 African countries are currently listed among the ten most restrictive trade regimes in the world.
In an effort to improve Africa’s trade performance and competitiveness, the member states of the three Regional Economic Communities of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC) launched the COMESA-EAC-SADC Tripartite Free Trade Area on 12th June 2011. The Tripartite Free Trade Area aims to reduce tariffs imposed on goods originating in the region and traded in the region.
However, in addition to tariff barriers, the region’s producers and traders also face a number of Non-Tariff Barriers. Non-Tariff Barriers (NTBs) are factors other than tariffs that inhibit cross-border trade, for example excessive customs adherence or excessive administrative procedures.
High cross-border trade and transport costs are another major factor negatively impacting the region's trade performance. In the COMESA-EAC-SADC Tripartite region, road transport accounts for about 95% of cargo volume and the costs of road transport is directly related to the time taken for a journey. If a truck takes 3 days to clear a border (which is not excessive in the COMESA-EAC-SADC region) the transporter can pass up to US$1,200 to the importer and, eventually, to the consumer. Similarly, it costs US$5,000 to US$8,000 to ship a 20ft container from Durban to Lusaka. It costs only US$1,500 to ship the same container from Japan to Durban.
An integral part of the Tripartite Free Trade Area, therefore, is the design and implementation of a programme that is aimed at improving trade and transport measures and reducing non-tariff barriers to trade.
TMSA provides technical, administrative and financial support to the COMESA-EAC-SADC Tripartite on the following Trade Facilitation Interventions:
Tripartite Trade and Transport Facilitation Programme: The COMESA-EAC-SADC Comprehensive Tripartite Trade and Transport Facilitation Programme (CTTTFP) is a series of initiatives from different Regional Economic Communities that have been brought together into one large integrated trade facilitation programme with the purpose of reducing the time and costs of cross-border trade in the region.
Elimination of Non-Tariff Barriers to Trade: Non-Tariff Barriers (NTB’s) refer to non-tariff related trade restrictions resulting from prohibitions, conditions or specific requirements that make importation and exportation of goods difficult or expensive. The elimination of NTB’s was identified as a priority at the First Tripartite Summit that took place in October, 2008. TMSA is providing instrumental support to the Tripartite in the elimination of NTBs.
Standards and Phyto-Sanitary Standards: Trade in goods requires that goods should comply with the technical requirements of the importing country. Some of these technical requirements, however, vary from country to country, creating Technical Barriers to Trade (TBTs). Imports and exports of agricultural products, on the other hand, have to conform to Sanitary and Phyto-Sanitary (SPS) measures that are applied to protect human, animal or plant health and life. While legitimate in themselves, these measures can become barriers to trade if they vary from one country to another, or if a country lacks the technical or financial capacity to comply. TMSA is supporting the Tripartite to create a well-functioning technical infrastructure, underpinned by harmonized standards, vital to regional integration. TMSA also supports a number of regional standards projects, including support to small-scale growers.