Priority 3: International trade and trade facilitation

International trade

Greater integration of landlocked developing countries into world trade and global value chains is vital for increasing their competitiveness and ensuring their economic development. Exporting goods produced in landlocked developing countries incurs additional transport costs, which may decrease competitiveness and reduce revenue for producers from those countries. The export structure of many landlocked developing countries continues to be increasingly characterized by reliance on the export of a limited number of products, in particular agricultural products and mineral resources. Priority should be given to policies and measures, with the support of development partners, to diversify the production and export structures of landlocked developing countries and to enhance their productivity and competitiveness in order to take full advantage of the multilateral trading system.

With the growing interlinkages between world trade, investment and production, global value chains account for a rising share of international trade. Landlocked developing countries have not been able to fully participate in regional or global value chains. Linking into global value chains presents an opportunity for landlocked developing countries to achieve greater integration within world markets, increase their competitiveness and become important links in production and distribution chains.

Services are important enablers of trade in goods and effective participation in international trade and global value chains. Efficient services enhance productivity, reduce the cost of doing business and promote job creation. Landlocked developing countries should be supported so as to increase the share of services in their economies and exports, including through enabling policies.

One of the main causes of marginalization of landlocked developing countries in the international trading system is high trade transaction costs. The importance of enhanced and predictable access to all markets for the exports of developing countries, including landlocked developing countries, was recognized in the Monterrey Consensus of the International Conference on Financing forDevelopment. In accordance with the commitments contained in the Ministerial Declaration of the Fourth Ministerial Conference of the World Trade Organization and the rules of the World Trade Organization, full attention should be given in the Doha Development Round of trade negotiations to the needs and interests of developing countries, including landlocked and transit developing countries. Given the increasing growth in South-South trade, other developing countries could be important export destinations for the products of landlocked developing countries and sources of critical foreign direct investment.

Trade ministers at the Ninth Ministerial Conference of the World Trade Organization, held in Bali, Indonesia, in December 2013, agreed by consensus to the Bali package, including the Agreement on Trade Facilitation, which clarifies and improves articles V, VIII and X of the General Agreement on Tariffs and Trade of 1994, with a view to further expediting the movement, release and clearance of goods, including goods in transit. The Agreement on Trade Facilitation and its timely implementation in the context of the Bali package are important so as to facilitate trade for landlocked developing countries. The Agreement includes important provisions on technical assistance and capacity-building to help landlocked developing countries to implement it effectively.

Specific objectives are:

(a) To significantly increase the participation of landlocked developing countries in global trade, with a focus on substantially increasing exports;

(b) To significantly increase the value added and manufactured component, as appropriate, of the exports of landlocked developing countries, with the objective of substantially diversifying their markets and products;

(c) To further strengthen economic and financial ties between landlocked developing countries and other countries in the same region so as to gradually and consistently increase the share of landlocked developing countries in intraregional trade;

(d) To invite Member States to consider the specific needs and challenges of landlocked developing countries in all international trade negotiations.

Actions by landlocked developing countries include:

(a) To develop a national trade strategy based on comparative advantages and regional and global opportunities;

(b)  To integrate trade policies into national development strategies;

(c)  To promote a better business environment so as to assist national firms to integrate into regional and global value chains;

(d) To promote policies to help national firms, especially small and medium-sized enterprises, to participate better in international trade;

(e) To fully leverage bilateral and regional preferential trading arrangements with a view to broadening regional and global integration;

(f) To implement policies and measures that will significantly increase economic and export diversification and value added.

Actions by transit developing countries include:

(a) To promote investment in landlocked developing countries with the aim of promoting their productive and trading capacity and supporting them in their participation in regional trade arrangements;

(b) To improve market access for products originating from landlocked developing countries, without arbitrary or unjustified non-tariff barriers that are not in conformity with the rules of the World Trade Organization;

(c) Transit countries and landlocked developing countries should carry out studies on logistical competitiveness and logistical costs based on internationally recognized methodologies.

Actions by development partners include:

(a) To support efforts by landlocked developing countries to diversify exports, integrate into global and regional value chains and effectively participate in multilateral trade negotiations;

(b) To address non-tariff measures and reduce or eliminate arbitrary or unjustified non-tariff barriers, that is, those that are not in conformity with the rules of the World Trade Organization;

(c) Landlocked developing countries and development partners should promote better integration of small and medium-sized enterprises within international trade by, when appropriate, strengthening institutions that support trade, fostering trade competitiveness, building spaces for private-public dialogue, fostering technical and vocational education and training and capacity-building, and creating market linkages through business-to-business platforms;

(d) To promote the diffusion and uptake of appropriate and environmentally sound technologies on mutually agreed terms and conditions, including through investment or cooperation projects to promote economic diversification and sustainable development, as appropriate;

(e) To offer appropriate technical assistance and capacity-building to landlocked developing countries to complete the process of their accession to the World Trade Organization, fulfil their commitments and integrate into the multilateral trading system;

(f) To continue to provide aid for trade to landlocked developing countries, consistent with World Trade Organization guidelines.

Trade facilitation

Non-physical barriers, delays and inefficiencies associated with border crossings and ports, including customs procedures and documentation requirements, uncertainty in logistical services, weak institutions and widespread lack of human and productive capacities, continue to make transport costs high. They are at the core of the continued marginalization of many landlocked developing countries. Further streamlining and harmonization of customs and transit procedures and formalities and transparent and efficient border management and coordination of agencies involved in border clearance, should have a concrete and direct impact on reducing the cost of doing trade and stimulating faster and competitive trade for landlocked developing countries. Such improved trade facilitation would help landlocked developing countries towards enhancing the competitiveness of their export products and services.

In many landlocked developing countries, human and institutional capacities are not adequate in many areas, including in customs and border entities, transit transport agencies, the trade negotiation process and implementation of transit and trade facilitation agreements, including the World Trade Organization Agreement on Trade Facilitation, leading to a lack of effective implementation. Technical assistance and improvement of trade- and transit-related logistics are crucial in enabling landlocked developing countries to fully participate in and benefit from multilateral trade negotiations, effectively implement policies and regulations aimed at facilitating transport and trade, and diversify their export base.

Specific objectives are:

(a) To significantly simplify and streamline border crossing procedures with the aim of reducing port and border delays;

(b) To improve transit facilities and their efficiency with the aim of reducing transaction costs;

(c) To ensure that all transit regulations, formalities and procedures for traffic in transit are published and updated in accordance with the World Trade Organization Agreement on Trade Facilitation.

Actions by landlocked developing countries include:

(a) To establish or strengthen, as appropriate, national committees on trade facilitation, with the involvement of all relevant stakeholders, including the private sector;

(b) To scale up and implement trade facilitation initiatives such as single-stop inspections, single windows for documentation, electronic payment, and transparency and modernization of border posts and customs services, among others;

(c) To effectively implement integrated border management systems and strive to establish one-stop border posts, where appropriate, with neighbouring landlocked or transit developing countries that allow for joint processing of legal and regulatory requirements, with a view to reducing clearance times at borders, while fully utilizing the tools for trade facilitation developed by international organizations to build national capacity;

(d) To ensure full and inclusive representation of the private sector, including public-private partnerships and transport business associations, in trade facilitation initiatives and policy, and to develop the necessary policies and regulatory framework to promote private sector involvement.

Actions by transit developing countries include:

(a) To ensure that trade facilitation initiatives, including the World Trade Organization Agreement on Trade Facilitation, are developed and implemented together with landlocked developing countries in all the relevant areas;

(b) To undertake further harmonization, simplification and standardization of rules, documentation requirements and border crossing and customs procedures; to enhance collaboration and cooperation among various customs and border-crossing agencies across borders; to promote the use of electronic (e-transaction) processes, the pre-arrival submission of customs declarations, risk management inspection systems and authorized economic operator systems; to improve transparency, predictability and consistency in customs activities; and to establish one-stop border posts, as appropriate, joint customs controls and inspection at border sites and other forms of integrated border management at borders with landlocked developing countries;

(c) Sharing best practices in customs, border and corridor management and in the implementation of trade facilitation policies should be encouraged at the global, regional, subregional and South-South levels, including among the private sector;

(d) To fully utilize the tools for trade facilitation developed by international organizations to build national capacity and ensure secure and reliable transport across borders by, inter alia, effectively implementing existing international standards and best practices for customs transit and safety and security of transport chains;

(e) To ensure transparency in border crossings, customs and transit transport rules, regulations, fees and charges and accord non-discriminatory treatment so that the freedom of transit of goods is guaranteed to landlocked developing countries.

Actions by development partners include:

(a) To support landlocked and transit developing countries in the area of trade facilitation in accordance with the World Trade Organization Agreement on Trade Facilitation, which was agreed by consensus at Bali, Indonesia, and to encourage international organizations to help landlocked developing countries to assess their needs in implementing that Agreement and relevant trade facilitation measures;

(b) To support activities, including trade facilitation, aimed at simplifying, streamlining, standardizing and harmonizing import, export and customs procedures;

(c) To encourage sharing information on experiences and best practices related to trade facilitation with a view to creating an environment that allows for the implementation of multi-country customs transit guarantee regimes, through the implementation of either international transit agreements or functional regional agreements;

(d) To support capacity-building, including training programmes, in the areas of customs, border clearance and transport;

(e) To encourage regional aid for trade so as to promote trade integration among landlocked developing countries and transit countries.

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