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WEDF 2014 Session report - Plenary 2: Boosting SME participation in trade through trade facilitation and regional integration

  • WEDF 2014 - Session report - Plenary 2: Boosting SME participation in the international trade

    Speakers

    • H.E. Amb. Richard Sezibera, Secretary-General, East African Community
    • Ms. Agnes Katsonga Phiri, Vice-Chair for East and Southern Africa, World Customs Organization & Commissioner for Customs and Excise, Malawi Revenue Authority
    • Mr. Frank Matsaert, CEO, TradeMark East Africa
    • Mr. Hannington Namara, CEO, Private Sector Federation, Rwanda
    • Mr. Jeroen Roodenburg, Ambassador Private Sector & International Cooperation, Ministry of Foreign Affairs, Netherlands
    • Mr. Stefano Arganese, CEO, DHL Freight CESE & AMEA
    • Moderator: Mr. Shawn Donnan, World Trade Editor, Financial Times

    Overview

    Value chains present opportunities for SMEs to provide goods and services at specific points in the production and distribution process. Inputs into final goods and services now cross borders multiple times. With a supportive business environment, SMEs are better placed to take advantage of emerging opportunities.

    Trade facilitation is about doing business efficiently. A lot of progress has been made, and it provides a good basis for the implementation of further trade facilitation measures.

    Senior industry executives, business association leaders and government officials examined the constraints for SMEs to enter and move up value chains, and discuss measures to address trade facilitation, non-tariff measures and greater regional integration.

    The WTO Trade Facilitation Agreement provides the right platform, but stakeholders need to ensure that these commitments are implemented. This is especially important for land-locked countries. Building SME capacity to address non-tariff measures is equally key.

    Conclusions

    • Trade facilitation does not simply equal modernization of customs procedures. For trade facilitation to be effective, broader issues need to be addressed, including infrastructure, transport and access to finance.
    • There is a close link between trade facilitation and the involvement of SMEs in value chains. With a growing component of world trade taking place within value chains, effective trade facilitation is crucial.
    • For trade facilitation to be effective it needs to address the real bottlenecks. Businesses are best placed to identify where problems lie and draw the attention of policymakers to them for effective action. This requires governments, SMEs, TSIs, multinationals and development partners to work in coordination.
    • Given the small size of most African markets, effective trade facilitation is an important pre-condition for African countries to achieve competitiveness and economies of scale.
    • The time required for customs clearance has an impact on the competitiveness of the private sector, particularly SMEs. To strike the balance between trade facilitation and control, countries need to simplify and harmonize procedures, and increase the use of modern solutions, such as e-tracking of transit cargo.

    Speakers' key messages

    • Ambassador Sezibera
      To create a common market such as the East African Community, trade facilitation, harmonized procedures and standards are essential. This could only be achieved through political will, building skill sets and improving infrastructure and the establishment of one-stop-border-posts.

      “So easy to put roadblocks up, but so very difficult to remove them.”
    • Ms. Katsonga Phiri
      There is a need to raise awareness among SMEs concerning the opportunities the implementation of the WTO Trade Facilitation Agreement will offer. Furthermore, the TFA provides an opportunity to raise awareness about trade facilitation in general, and challenge poor practices and exploitive behaviour by some border agencies, including corruption and unnecessary delays.
      A single customs territory has been a positive development in the East African Community. It is a model to influence other regional integration processes in Africa, such as COMESA.
    • Mr. Matsaert
      Trade facilitation plays a key role in private sector development. Improved border efficiency would provider huge gains to small traders, enabling trade.
      TradeMark is working with partners such as the Government of Rwanda to reduce costs and time delays at the border. It is working with Uganda on the modernization of its customs management system. It is also working with Burundi's revenue authority to improve revenue collection.
    • Mr. Namara
      To be landlocked is a reality, not a destiny. With a change of mindset, landlocked countries can overcome their disadvantages. This is now happening in Rwanda. Strong institutions have been key in supporting private sector growth.
      The right policy mix and thorough implementation are equally important. The government has embraced this and is now leading the charge in the region.
    • Mr. Roodenburg
      Public-private partnerships are essential to achieve inclusive growth. Donors are willing to contribute to trade facilitation projects in general and towards the implementation of the TFA in particular. Investment is needed all along the supply chain to stimulate SME growth and competitiveness.
    • Mr. Arganese
      Training SMEs on all issues around trade facilitation can help them understand the challenges and create new businesses linkages around the world.
      By establishing 3,000 services points in the space of three years, DHL has contributed to improving linkages between businesses, as well as efficient service delivery from businesses to consumers.
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