Trade shocks have been an interesting feature of the global economy in the last decade. From global maritime disruptions to the Ukraine crisis, African ports have been congested revealing the need for resilient trade facilitation mechanisms that stand the test of time in crisis [1]. This blog examines how one Article (Article 10.4) of the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO) – the Single Window (SW), could serve as a shock absorber to bolster trade procedures and offer synchronized trade implementation efforts. The benefits of reduced custom time, harmonized, digitized or automated trade formalities and procedures, obtained from the Single Window implementation, can boost intra-African trade considering the African Continental Free Trade Area Agreement (AfCFTA).
The Trade Facilitation Agreement of the WTO
The Trade Facilitation Agreement of the World Trade Organization (WTO) came into force on February 22, 2017, with one objective – to strengthen Member States’ trade procedures. This includes the movement of goods, and the border clearance procedures for import and export of goods [2]. Currently, over 150 WTO members of the 164 members have ratified the TFA. The uniqueness of the TFA and why most countries would benefit from it is that it is tailored to the realities of each country. The TFA is framed by individual countries to meet the specific trade facilitation needs of each country at their level of development. Countries are then required to provide progress updates on implementation on each commitment. This information is publicly available on a dedicated TFA database or platform (TFAD - Trade Facilitation Agreement Database).
A Single Window for trade
Developing and least developed countries in Africa recognize that the TFA provides the opportunity to develop trade facilitation measures and enhance trade. A World Trade Organization report from 2015 shows that many developing countries (65%) ranked this ambitious trade measure – the Single Window - as the highest priority needed for trade facilitation. It is worth noting that the Single Window measure is only but one of the 36 TFA measures, others include institutional arrangements such as establishing a permanent committee on trade facilitation, among others [3],[4].
The single window concept is one where Member States establish or maintain a single window, enabling traders to submit documentation and/or data requirements for importation, exportation, or transit of goods through a single-entry point to the participating authorities or agencies. After the examination by the participating authorities or agencies of the documentation and/or data, the results shall be notified to the applicants through the single window in a timely manner [5].
Essentially exporters (& importers) instead of 'running' from one agency or ministry to another to access or submit requisite trade documentation, are able to make one submission, which all trade-related agencies or ministries can access and evaluate through the single channel (see Figure 1).
Figure 1: The United Nations Economic Commission for Europe 0330640_ECE_TRADEAnglais (unece.org)
How can a Single Window boost regional trade in Africa?
The implementation of the TFA, of which the Single Window is a significant measure, has three effects that culminate in boosting trade in Africa.
Firstly, a reduction in custom time, which De Melo et al. (2024) [6] estimates on the import side, a reduction of 2.7 days in customs time could equate to a tariff reduction of 3.6-7.0%, while on the export side, a reduction of 1.7 days could translate into an 8.1% increase in exports [6],[7].
Secondly, possibilities of increased product exports to additional destinations. According to the WTO [5], with only a partial implementation of the TFA, LDCs can increase product exports to additional destinations by 11.8–12.8%, on average. With full implementation of the TFA, trade gains increase to 32.9–35.6%. If the TFA is implemented only partially, African countries would experience an increase in the product exports to destinations from 8.4 to 9.1%, and if fully implemented, trade gains increase from between 18.4 and 20% [4].
Thirdly, any measure to harmonize or digitize trade formalities and procedures, provides tremendous benefits offering synchronized trade implementation efforts considering AfCFTA. This is the most significant contribution of a Single Window for trade. Especially when border procedures are disjointed and inefficient [8].
While generally, SWs are expensive to implement, cost estimates show that establishing a Single Window could range from US$ 100,000 to US$ 27 million because of the necessity of ICT, hardware and software to facilitate the harmonization, integration and interoperability of different agencies’ ICT systems etc., they are still highly beneficial in boosting trade and can shape the future of Africa’s economy [1],[5].
In the next blog post, Part II will cover the international experience of implementing SWs and will provide an overview of active SWs across Africa and when they became operational.
Reference
African Export-Import Bank (Afreximbank, 2024). African Trade and Economic Outlook 2024 A Resilient Africa: Delivering Growth in a Turbulent World. Available from Afreximbank-African-Trade-and-Economic-Outlook-2024_compressed-1.pdf
Ugaz, P. (2019). The World Trade Organization's Trade Facilitation Agreement at two: Where do members stand? Available from: The World Trade Organization's Trade Facilitation Agreement at two: Where do members stand? | UNCTAD
World Customs Organization (WCO, 2024). WTO Trade Facilitation Agreement. Available from: World Customs Organization (wcoomd.org)
Hassan, M. (2020). Africa and the WTO trade facilitation agreement: State of play, implementation challenges, and policy recommendations in the digital era. Fostering Trade in Africa: Trade Relations, Business Opportunities and Policy Instruments, 5-38.
World Trade Organization (WTO, 2015). World Trade Report 2015: Speeding up trade: benefits and challenges of implementing the WTO Trade Facilitation Agreement. world_trade_report15_e.pdf (wto.org)
De Melo, J., Sorgho, Z., & Wagner, L. (2024). Implementing the Trade Facilitation Agreement should boost trade among African Continental Free Trade Area members. FERDI Notes brèves/Policy briefs.
Taljaard, N. (2024). Implementing The TFA: A Boost For Intra-African Trade. Available from: https://africantraderemedies.com/articles/implementing-the-tfa-a-boost-for-intra-african-trade/
Ndonga, D. (2013), “Increasing Africa’s Share of Vertical Investments Through Single Window Systems”, The Law and Development Review 6(2): 181-215.
Author's bio
Oluwatobi Ogundele's economics experience and interests have been in the areas of competition law and policy, health and migration. She has masters degrees in Economics and in International Public Policy with specialization in International Economic Relations and Global Governance.
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