What Trade Facilitation Is and Why It Matters

file0001748937726The majority of people have heard the old saying: “the early bird gets the worm.” Well, the same holds true for trade facilitation – and there are a few good reasons why.

Trade facilitation creates a more efficient supply chain connectivity for improved international trading, builds economic and port infrastructure as well as interconnecting region suppliers in a more fluid and cost-friendly way.

But first, let’s back up a bit and give some history. . .

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Addressing Public Corruption is Fundamental to Trade Facilitation

Financial crisis flowchart on a chalkboardWith the finalization of a Trade Facilitation Agreement (“TFA”) at the conclusion of the 9th Ministerial Conference in Bali, Indonesia, on December 7, 2013 (see: https://mc9.wto.org/system/files/documents/w8_0.pdf), the World Trade Organization (“WTO”) proved that it is not dead. Significantly, the TFA is the first WTO trade agreement concluded since 1998 and the first fully multilateral trade agreement negotiated under the auspices of the WTO. The Organization for Economic Cooperation and Development estimates that these customs reforms 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.” In other words, improved customs procedures and trade facilitation should help all companies, large and small, gain access to new export opportunities by providing predictability, simplicity and uniformity in customs and other border procedures.

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Africa’s Golden Opportunity To Engage the United States on Trade and Investment at the U.S. – Africa Leaders Summit

market-205227_640On January 21, 2014, the White House announced the first U.S.-Africa Leaders Summit in Washington, DC to take place on August 5 and 6, 2014. President Obama invited leaders from across the African continent with the aim of strengthening ties with one of the world’s most dynamic and fastest-growing regions. Six of the world’s ten fastest growing economies of the past decade are in sub-Saharan Africa. According to the White House Press Release, “[t]he Summit will build on the progress made since the President’s trip to Africa last summer, advance the Administration’s focus on trade and investment in Africa, and highlight America’s commitment to Africa’s security, its democratic development, and its people.”

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Why South Africa Should Not Be Graduated From AGOA

With attention turned towards the renewal of the African Growth & Opportunity Act
(AGOA), some have called for South Africa to be graduated from the duty preference
program because of its well-developed infrastructure and labor force. Some have also
raised the issue of certain non-tariff barriers said to exist that prevent U.S. companies
from entering the South African market.


Recently, the U.S. International Trade Commission (USITC) held hearings and invited comments on
AGOA in relation to four investigations covering: (1) AGOA trade and investment performance; (2) the
economic effects of providing duty-free treatment to AGOA-eligible countries; (3) possible changes to
AGOA’s rules of origin to promote regional integration and to increase exports to the U.S.; and 4) the
impact of EU’s free trade agreement with South Africa on U.S. exports.

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African Growth and Opportunity Act Renewal and its Importance to African Women

photoThe African Growth & Opportunity Act (AGOA) was enacted in 2000 to stimulate trade and investment between the United States and Sub-Saharan Africa. Since 2000, AGOA has been credited with more than doubling U.S. trade with AGOA-eligible countries. Today, African markets are growing rapidly, and trade and investment opportunities abound. With AGOA set to expire on September 30, 2015, the discussion about AGOA renewal has begun.

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