Feedback Request on AGOA

This post originally appeared on the Africa Syndicate Blog on March 31, 2016.

What’s Your Experience with the African Growth and Development Act (AGOA)?

AGOA - The African Growth and Renewal ActThe African Growth and Opportunity, originally enacted in 2000, was renewed in the summer of 2015 for an additional ten years until September 30, 2025. It is described by the U.S. as the cornerstone of the U.S. economic relationship with sub-Saharan Africa and the most generous trade preference program offered by the U.S. While it is good news that AGOA was renewed, at the same time both the U.S. and sub-Saharan countries have entered into trade agreements with third countries and other developed countries such as the European Union and Canada have migrated away from trade preference programs to reciprocal trade agreements. This has led the U.S. to consider policies and approaches beyond preferences for sub-Saharan Africa. Both the Administration and the Congress in reenacting AGOA have expressed an interest in exploring such changes.

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Newly Enacted Customs Law Lends Helping Hand

SMEs and State Export Promotion Efforts to Benefit from Bill Signed by Obama

This article originally appeared in Global Trade on March 18, 2016.

On February 24, 2016, President Obama signed the “Trade Facilitation and Trade Enforcement Act of 2015.” This is the first major customs legislation since the 1993 Customs Modernization Act.

The law updates U.S. customs laws to facilitate legitimate trade and strengthens trade enforcement. On the trade enforcement side of the equation it includes provisions to investigate evasion of antidumping and countervailing duty orders and to enhance U.S. Customs and Border Protection’s (CBP) ability to combat counterfeit imports and to protect intellectual property rights. It also has provisions to address concerns about potentially disreputable importers of record. The law statutorily establishes CBP within the Department of Homeland Security and authorizes the Centers for Excellence and Expertise (CEEs). It provides support for CBP’s automation systems, the Automated Commercial Environment (ACE) and the International Trade Data System (ITDS).

The law encourages CBP to consolidate the two CBP partnership programs, the Customs-Trade Partnership Against Terrorism (C-TPAT) and the Importer Self-Assessment (ISA) program and to provide participants with “commercially significant and measurable trade benefits.” The benefit specifically mentioned in the law is preclearance of merchandise for those importers that show the highest levels of compliance. The law amends the drawback statute and contains a number of miscellaneous customs provisions, including a raised de minimis for very low value shipments that can be entered without the payment of duties. It also expresses a sense of Congress expressing a commitment to reinstituting the miscellaneous tariff bill legislative process.

Title V, referred to as the “Small Business Trade Enhancement Act of 2015” or the “State Trade Coordination Act,” may provide an important boost to state and local international trade economic development programs. In particular, the law authorizes grants for state trade expansion programs at $30 million a year through fiscal year 2020. It makes matching-fund awards to states to assist small businesses enter and succeed in the global marketplace. The grants to the states are for programs that support eligible small business concerns that wish to export by helping them with: participation in foreign trade missions; a subscription to services provided by the U.S. Department of Commerce; the payment of website fees; the design of marketing media; trade show exhibition; participation in training workshops; reverse trade missions; and procurement of consultancy services (after consultation with the U.S. Department of Commerce to avoid duplication).

This type of assistance can be very helpful to small businesses who do not have the financial resources for marketing and consultancy services useful critical to successful engagement in foreign markets.

The customs law seeks to improve coordination between the federal government and the states and local governments on export promotion and export financing and to reduce duplication of effort and overlapping functions. It establishes a working group selected by the Secretary of the U.S. Department of Commerce of representatives from state trade agencies representing regionally diverse areas.

The law also directs the Secretary of Commerce, in coordination with representatives of state trade promotion agencies, to develop a comprehensive plan to integrate resources and strategies of state trade promotion agencies into the overall federal trade promotion program.

The law directs a federal working group to identify a diverse group of small businesses, representatives of small businesses, or a combination thereof, to provide the working group the views of small businesses in the manufacturing, services, and agriculture industries on the potential effects of a trade agreement for which the president has provided notification of the president’s intent to enter into negotiations. These provisions are aimed at ensuring that small businesses are not harmed by and are able to take advantage of new trade agreements.

In sum, the new customs law contains measures to help SMEs and state export promotion efforts which should not be overlooked.

Where is International Trade headed and what does it mean for Africa?

nairobiAs we welcome the New Year, it is time for the African continent to take stock of developments in international trade policy that occurred in 2015. The year ended with the 10th Ministerial Conference of the World Trade Organization (WTO), which took place in Nairobi, Kenya from 15 to 19 December 2015, a first such meeting to be hosted by an African nation. The Conference was opened by Kenya’s President, Uhuru Kenyatta and hosted by Kenya’s Cabinet Secretary for Foreign Affairs and International Trade Amina Mohamed. They were joined at the Opening Ceremony by President Ellen Johnson Sirleaf of Liberia, whose country concluded its WTO membership negotiations on 16 December 2015. It is interesting to note that the round of trade negotiations being discussed in Nairobi, the Doha Development Agenda (Doha), was launched in Marakesh, Morroco in 2001.

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Does Trade Facilitation Matter in the Fight against Corruption?

This post originally appeared on Richard Bistrong’s blog on August 3, 2015. View the original article here.

The World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) may seem to be an odd topic for an anti-corruption blog but it is not. It has everything to do with good governance and addressing the demand side of corruption at the border. But in order to understand the relationship one must understand what Trade Facilitation is and how exactly it addresses public corruption at Customs.

The WTO defines trade facilitation as “the simplification and harmonisation of international trade procedures” covering the “activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade.” The main features of the TFA include: required publication of regulations and fees; appeal-and-comment rights when new regulations are introduced; mandatory internet availability of documents and payment options; simple and clear access to overseas documents and regulations; special procedures for expedited release of air cargo and perishable goods; transit guarantees for cargoes from land-locked countries through neighboring countries to seaports without special fees; support for the use of express delivery and air cargo; requirements for clear procedures to deal with cargo holdups and releases; and technical assistance and capacity building for low-income countries to put these reforms into place.  In short, TFA provides a blueprint for customs modernization. Successful implementation will lie in the detailed work that lies ahead.

The TFA was finalized at the conclusion of the 9th Ministerial Conference in Bali, Indonesia, on December 7, 2013 (see here). It was the first WTO trade agreement concluded since 1998 and the first fully multilateral trade agreement negotiated under the auspices of the WTO. Unfortunately, India held up final approval of the TFA by linkage to an entirely separate issue addressing food stockholding programs.   Thanks to the leadership of Director-General Roberto Azevedo and persistent efforts of the U.S. Trade Representative Ambassador Michael Froman, on November 27, 2014 the WTO adopted decisions related to public stockholding for food security purposes, the TFA and the post-Bali work, which put TFA back on track for ratification and implementation.

 In spite of the touted benefits, the WTO member countries has been slow to ratify the TFA. As of June 18, 2015, only eight countries had ratified. They include: the United States, Singapore, Hong Kong, Mauritius, Malaysia, Japan, Australia and Botswana. On July 14, 2015, the European Parliament’s INTA Committee approved TFA. Each European Union member state will be counted individually. Nonetheless, two-thirds of the WTO membership, or 108 members, must ratify TFA before it is implemented. Meanwhile, the U.S. and the WTO are encouraging countries to take action before the Tenth WTO Ministerial December 15-18, 2015 in Nairobi Kenya.

Deputy U.S. Trade Representative Bruce Hirsh also called on U.S. businesses with operations in developing countries to weigh in. Companies should view these reforms as a welcome opportunity to also combat public corruption at the border. Moreover, various countries are donating funds to technical assistance programs for developing countries. For example, on July 2, 2015 Australia donated AUD 1 million for the Trade Facilitation Agreement Facility and on July 27, 2015, Ireland donated EUR 350,000 for technical assistance.

The Organization for Economic Cooperation and Development estimates that the customs reforms effected by TFA implementation would lower the total trade cost of shipping goods by 10 to 15 percent depending upon the country. Some expect implementation of TFA’s measures to boost global trade by an estimated $1 trillion and global GDP by nearly 5 percent. As stated by the Office of the United States Trade Representative, “it makes it easier for businesses big and small to participate in trade around the world – and to support jobs through that trade.”

Various aspects of the Agreement, such as transparency, automated entry and payment of duties, can serve powerful measures to address corruption at Customs. Corruption at the border is undoubtedly a significant impediment to trade and investment in the developing world. Corruption at ports is such a serious problem that the maritime industry has organized a collective action effort called the Maritime Anti-Corruption Network (“MACN”) which seeks to “work toward its vision of a maritime industry free of corruption that enables fair trade to the benefit of society at large.”[1] It goes without question that TFA implementation would aid in this effort.

TFA implementation will also be a test of good governance. Countries will have to make the decision of whether they actually want to avail themselves of the donor assistance for capacity building to modernize their border processes. This can be seen as a test of whether a country is really willing to address corruption at Customs. A country’s willingness or unwillingness to adopt measures facilitating trade and reducing the opportunities for corruption at the border may be a powerful indicator of a culture of corruption – more so than any index of perception of corruption.

For companies doing business abroad, especially in emerging countries, a country that undertakes these reforms may be a better bet for business. And hopefully, the countries that take advantage of the assistance will succeed in establishing their places in the global value chain. In sum, TFA implementation should be an important tool in addressing the demand side of corruption and making the implementing country a more attractive and less risky place to do business.

Ms. Suarez is an experienced customs and international trade lawyer with a special focus on import regulation as well as on anti-corruption and trade policy issues. Her practice includes administrative, regulatory, legislative and litigation matters for global companies that are involved in importing, exporting, transportation, logistics, and customs brokerage. Ms. Suarez has also handled high-profile investigations, such as the U.N. Volcker Committee and various Congressional investigations into the U.N. Oil-for-Food Programme. She can be reached via e-mail at and at 202.552.0310.