The Director and Lead Consultant at Trade Development and Facilitation (TDAF) Consulting in Geneva, Switzerland, Tom Butterly has urged policy-makers in Ghana to pay keen attention to trade facilitation to enhance administrative efficiency and effectiveness, reduce costs and time to markets, and increase predictability in global trade.

According to him, the primary goal of trade facilitation is to help make trade across borders (imports and exports) faster, and cheaper and more predictable, whilst ensuring its safety and security.

Mr Butterly made the call when he facilitated a one week Trade Facilitation Implementation Guide (TFIG) training workshop for senior level managers of the Customs Division of the Ghana Revenue Authority (GRA), Ghana Institute of Freight Forwarders (GIFF), Association of Ghana Industries (AGI), Ghana Chamber of Commerce and Industry (GCCI), Ghana Union of Traders’ Association (GUTA), West Blue Consulting, and National Security in Accra.

The workshop was organised by the United Nations Economic Commission for Europe (UNECE) in collaboration with the GRA and sponsored by West Blue Consulting under the Ghana National Single Window (GNSW) project.

The participants were trained on how to use the UN Trade Facilitation Implementation Guide for Trade Facilitation (TF) reform efforts and to stimulate the sharing of best practices and the discussion of opportunities for inter-agency cooperation in the TF.

The UN Trade Facilitation Implementation Guide is a web-based interactive tool to help countries better understands the key elements and instruments of trade facilitation. A set of case stories on how countries have succeeded in facilitating trade complements the Guide.

Mr Butterly noted that trade facilitation has become a key policy issue for both governments and business as it cuts the costs of doing trade, reduces delays at the border, and makes public agencies dealing with trade more efficient. It is at the heart of the World Trade Organization (WTO) Doha Round of negotiations.

He explained that; “in terms of focus, it is about simplifying and harmonizing formalities, procedures, and the related exchange of information and documents between the various partners in the supply chain”.

For UNECE and its UN Centre for Trade Facilitation and Electronic Business (UN/CEFACT), trade facilitation is “the simplification, standardization and harmonization of procedures and associated information flows required to move goods from seller to buyer and to make payment”. Such a definition implies that not only the physical movement of goods is important in a supply chain, but also the associated information flows.

It also encompasses all governmental agencies that intervene in the transit of goods, and the various commercial entities that conduct business and move the goods. This is in line with discussions on trade facilitation currently ongoing at the WTO, Mr Butterly emphasized.

Why does trade facilitation matter
There are great potential gains from trade facilitation for both governments and the business community. Public entities will profit in terms of enhanced trade tax collection, better use of resources and increased trader compliance, according to the renowned trade consultant.

“A more efficient and transparent delivery of public services will allow the administration to maintain high security levels and effective government control, while diminishing opportunities for corruption.

Traders will gain in terms of higher predictability and speed of operations and lower transaction costs, resulting in more competitive exports on global markets”.

For countries including Ghana as a whole, reducing unnecessary delays and costs attracts investments, and supports growth and job creation. Trade facilitation measures can particularly benefit developing countries, where it frequently takes three times as many days to export goods as it does in developed ones.

Exports from developing countries require nearly twice as many documents and six times as many signatures, according to Word Bank’s Doing Business 2012 report.

Implementing trade facilitation reform programmes certainly has a cost, and facilitation measures need to be prioritized in order to maximize benefits.

However, there are rich opportunities for gains, as documented in many studies and reports, particularly from the World Bank and the Economic Co-operation and Development (OECD).

At the macro level, these look at the positive effects on the trading environment and trade volumes. Every extra day required to ready goods for import or export decreases trade by around 4.5%, according to the OECD.

For the Asia-Pacific Economic Cooperation (APEC) which is the premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region, reforms in countries that perform below the regional average could increase intra-APEC trade by US$245billion. While a 2012 World Bank research on aid effectiveness found out that US$1 of aid for trade facilitation translated into US$70 in exports for recipients.

At the micro level (firms), these studies assess the ease of doing trade and a firm's export performance, measured as export intensity and diversity. And they find that exporters in African countries with more efficient Customs agencies send more products abroad.

Key principles of TF
The fundamental principles of trade facilitation are transparency, simplification, harmonization, and standardization.

Transparency within government promotes openness and accountability of a government's and administration's actions. It entails disclosure of information in a way that the public can readily access and use it. This information may include laws, regulations and administrative decisions of general application, budgets, procurement decisions and meetings, Mr Butterly stressed.

He added: “Regulatory information should be published and disseminated, when possible, prior to enforcement to allow parties concerned to take note of it and make necessary changes. Furthermore, relevant stakeholders and the general public should be invited to participate in the legislative process, by providing their views and perspectives on proposed laws prior to enactment”.

Simplification which he described as the process of eliminating all unnecessary elements and duplications in trade formalities, processes and procedures should be based on an analysis of the current situation.

Harmonization is the alignment of national procedures, operations and documents with international conventions, standards and practices. It can come from adopting and implementing the same standards as partner countries, either as part of a regional integration process or as a result of business decisions, Mr Butterly explained.

“Standardization is the process of developing formats for practices and procedures, documents and information internationally agreed by various parties. Standards are then used to align and, eventually, harmonize practices and methods.

To achieve these principles, full cooperation between government authorities and with the business community is essential”.

Supply chain perspective
Mr Butterly observed that often activities promoted and conducted under the overall heading of trade facilitation focus on Customs administrations, emphasizing: “Although Customs is a key player in trade facilitation, focusing on these agencies and their processes alone is not sufficient”. Trade facilitation has to encompass the entire trade environment, actors and processes involved in a transaction. An international supply chain perspective should be adopted, he advised.

A supply chain embraces all activities necessary for goods to be produced and delivered to the final consumer. Such activities, according to him include sourcing of raw materials, preparing for transport, requesting an import license, preparing documentation for Customs clearance, clearance, payment, and delivery to the consumer.

“As a minimum, a supply chain involves two parties, the seller and the buyer. In reality, a supply chain involves many different parties. These can be private-sector traders, transport operators, service intermediaries, or regulatory bodies from the public sector.

Adopting a supply chain perspective makes it possible to view and understand all possible processes and the interlinkages between them. It provides the framework to logically connect different actors, procedures and requirements in one picture of the trade environment”.

In emphasizing the dependencies, it becomes clear that improvements are realized throughout the chain but changes in one area can easily be offset by stalemates in others.

There are many variants of supply chains. Using a supply chain perspective therefore requires the use of a theoretical pattern that simplifies its complexity and can be used as a reference model.

The Buy-Ship-Pay Model (BSP) developed by UN/CEFACT is an example of such a model. It presents the supply chain as a sequence of business processes that can be grouped into the high-level domains of Buy, Ship and Pay.

3 levels of TF
The Geneva-based trade consultant noted: “Trade facilitation has to take place at three levels- at the national, regional and international levels. While at the regional and international level standards and agreements are developed and agreed, the operational implementation of trade facilitation measures including these standards, take place at the national level”.

Many trade facilitation measures require a reform and modernization process that depends on an enabling environment, which is built upon strong political support and professional programme management and change management capabilities. This enabling environment involves different types of interventions and activities addressing the various dimensions of the government, including legal, organization, technology, processes, and people.

Generic approach to TF implementation
For a senior official of UNECE, Julian Fraga-Campos who was one of the facilitators indicated that the generic approach to trade facilitation implementation is a simplified mapping and description of how to plan for trade facilitation reforms and to monitor their challenges. It was developed using the experience of trade facilitation implementers from different areas of expertise within UN Centre for Trade Facilitation and Electronic Business (UN/CEFACT).

The approach consists of a sequence of steps that policy makers and managers need to take in the formulation and implementation of trade facilitation initiatives. Such steps he explained range from assessing performance in trading goods and services across borders, to following up on the impact of the reform and the achievement of its objectives.

“As it is a generic model, adaptation to a specific country or organizational context, needs and capacities is necessary”.

The Trade Facilitation Implementation Guide (TFIG) focuses on the central steps of the generic approach. The process steps "Assess needs" and “Decide” are considered to be part of the preparatory work before actual implementation can take place. The "Follow-up" step is also excluded, as it is part of the evaluation process that a country needs to carry out at a later stage to assess the actual impact of implemented measures.

 -modernghana