Here is how trade facilitation has led to inclusive development

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

• The Global Alliance for Trade Facilitation supports trade reform in developing and least-developed countries, forging public private partnerships to make cross-border trade simpler, faster and more inclusive.
• The Alliance has engaged 45 global business Partners and over 1,000 local MSMEs in its activities, resulting in US$ 11.8 million business contributions.
• The Alliance has successfully delivered 21 projects which are helping solve global challenges, including food security, access to healthcare and building disaster resilience.

The importance of trade facilitation for development.

According to the World Bank, between 1990 and 2017, developing countries increased their share of global exports from 16% to 30%, correlating with a fall in the global poverty rate from 36% to 9% and helping to lift around 1 billion people out of poverty.

The Global Alliance for Trade Facilitation works to remove obstacles to trade and simplify and streamline supply chains, mainly by supporting countries in implementing the World Trade Organization’s (WTO’s) Trade Facilitation Agreement (TFA), which simplifies export and import processes by cutting “red tape.”

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With outsized benefits for micro, small and medium enterprises (MSMEs) and women-led businesses, streamlining access to global markets can directly raise incomes while producing a multiplier effect, alleviating systemic poverty. WTO figures show that between 2017 and 2019, trade facilitation increased the agricultural exports of least-developed countries by 17%, manufacturing exports by 3.1% and total exports by 2.4%.

The Alliance works off this direct correlation between development and trade. In total, the Alliance successfully delivered 21 projects that supported developing and least-developed countries in achieving their WTO objectives and broader reforms in furthering UN Sustainable Development Goals. By the end of 2023, Alliance initiatives will have saved $65 million in eight project countries, with expectations of continuous return on investment expected year-over-year as projects are designed to live beyond the completion of activities.

The Alliance is led by the World Economic Forum, the Centre for International Private Enterprise and the International Chamber of Commerce in cooperation with the German development agency, Gesellschaft für Internationale Zusammenarbeit. It is funded by the governments of the United States, Canada and Germany.

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The Alliance has become one of USAID’s strongest partners in demonstrating how we can accomplish global development goals through collaborating with government and business alike in delivering targeted trade reforms.”— — Paul Fekete, Trade Team Leader, USAID Center for Economics and Market Development

The resourcing challenges of global trade.

WTO members are reported to be on track to meet around 90% of their TFA commitments by 2030 but the head of the organization recently noted that “large gaps” still separate least-developed countries and land-locked developing countries from that level of fulfilment, urging more assistance.

Red tape at borders and cumbersome, manual processes continue to ramp up the time and cost of doing business and deny MSMEs – and their countries – the benefits of global trade.

Outdated processes and sociopolitical upheaval also increase food spoilage at ports and delay vital medical supplies from reaching vulnerable populations.

Agile engagement will address global challenges.

In a poly-crisis world, trade plays a vital role in boosting economic growth in developing countries. The Alliance’s public private partnership approach has a proven, reliable record of producing measurable impacts that benefit countries, businesses and consumers.

The Alliance complements private-sector engagement through strong, strategic partnerships with organizations such as UNICEF, the UN Food and Agriculture Organization and the Islamic Centre for Development of Trade.

Working through public private partnerships, Alliance projects contribute towards solving many of the world’s greatest challenges, including food security, access to healthcare and building disaster resilience. Digitalizing cross-border processes helps to ensure critical goods reach vulnerable populations more efficiently, boosting inclusivity by improving market access for small and women-led businesses.

For example, in Senegal, the Alliance led complementary projects, streamlining key import and export processes to bolster food security while increasing export potential, especially for MSMEs. In Mozambique, the Alliance partnered with UNICEF to change border processes, expediting imports of critical vaccines while benefiting shipments of medicines and medical equipment. In Madagascar, it supported the introduction of new protocols for the fast-track clearance of goods, including recovery equipment following natural disasters.

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This new system has helped push people to adapt to digitalization and will save them time and cost. Also, electronic certification means we can improve our competitiveness with international trading partners.”— — Mamadou Ndiaye, Coordinator, Association of Market Gardening Unions of Niayes, Senegal

Additionally, innovation remains at the core of Alliance-led efforts. In collaboration with the UN Conference on Trade and Development, the Alliance hosted its second Trade Facilitation Innovation Days on 19-20 September 2023, bringing together diverse trade facilitation and technology experts to share innovative proposals on streamlining trade. Over two days, there were discussions on reinforcing supply chain sustainability, improving risk management and transitioning to clean energy, among others.

Bolstering inclusivity.

Recognizing that MSMEs and women-led businesses face additional barriers to accessing the benefits of global trade, activities in all Alliance projects are tailored towards maximizing equal participation.

The Alliance actively supports selected MSMEs in the Dominican Republic to supply multinationals operating in the country’s Free Trade Zones. In Malawi and Zambia, e-learning and a scholarship fund to help implement the introduction of clearance agent certification in both countries are just two initiatives designed to maximize women’s involvement.

Recently in Fiji, numerous MSMEs were happy to speak about the benefits a successful project had brought to their lives beyond the time and cost savings for their businesses, such as newly developed trust between public and private-sector stakeholders.

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Working with the private sector is one of the priorities for the Ministry of Commerce. Through the Alliance project, we have been able to further this priority.”— — Laichea Chea, Director of the Department of International Cooperation, General Department of International Trade, Ministry of Commerce, Cambodia

Get involved.

The Alliance is always interested in hearing from corporate partners in emerging markets. We want to know if your business can bring a solutions-oriented approach to facilitating trade in a particular region.

The Alliance is part of the Forum’s Centre for Regions, Trade and Geopolitics which brings over 130 leading global companies together with policymakers for action-oriented exchange on building resilient, sustainable, and inclusive trade and investment.

The Alliance provides a platform for businesses of all sizes to participate in trade facilitation initiatives, streamlining border processes for everyone’s benefit.