Archives For Cross Border Trade

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This edition of WCO News features a special dossier on the theme chosen by the WCO for 2018, namely “A secure business environment for economic development”, with articles presenting initiatives and related projects that contribute to creating such an environment. The articles touch on authorized economic operators, national committees on trade facilitation, coordinated border management, performance measurement, e-commerce, data analysis, and partnerships with the private sector.

For sub-Saharan African readers, look out for the write up of the Customs systems interconnectivity and the challenges and opportunities for Customs administrations in the SACU region.

Other highlights include articles on Customs systems interconnectivity in the Southern African Customs Union, on the experience of a young Nigerian Customs officer who participated in the Strategic Management and Intellectual Property Rights Programme at Tokyo’s Aoyama Gakuin University, on how the WCO West and Central Africa region is using data to monitor Customs modernization in the region, and on the benefits that can be derived by facilitating transit procedures.

Source: WCO, February 2018

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bulk-carrier

The first full agricultural commodity transaction using a blockchain platform has been completed by Louis Dreyfus Company (LDC), Shandong Bohi Industry, ING, Societe Generale and ABN Amro.

The trade included a full set of digitalized documents (sales contract, letter of credit, certificates) and automatic data-matching, thus avoiding task duplication and manual checks. Time spent on processing documents and data was reduced five-fold. The companies involved said that other benefits included the ability to monitor the operation’s progress in real time, data verification, reduced risk of fraud and a shorter cash cycle.

In the test, the Easy Trading Connect platform was used to execute a soybean shipment transaction from the U.S. to China. The transaction involved user participation on the blockchain-based platform by teams from Louis Dreyfus Company as the seller and Bohi as the buyer, with banks issuing and confirming the letter of credit. Russell Marine Group and Blue Water Shipping also participated in the process, issuing all required certificates. The U.S. Department of Agriculture provided valuable insights on how to include phyto-sanitary certificates in the process.

The Easy Trading Connect platform was first validated with an oil cargo transaction in February 2017, with the subsequent launch in November 2017 of an energy consortium aiming to offer blockchain-based services to the energy sector. The same principle was then applied to develop a blockchain-based platform tailored to agricultural commodities trading.

ING, Societe Generale, ABN Amro and other major industry players such as LDC have a long-term ambition to improve security and operational efficiency in the commodity trading and finance sector through digitalization and standardization.

“One thing is clear: the digital revolution is transforming the commodities sector,” said Gonzalo Ramírez Martiarena, Chief Executive Officer of LDC. “Distributed ledger technologies have been evolving rapidly, bringing more efficiency and security to our transactions, and immense expected benefits for our customers and everyone along the supply chain as a result. The next step is to harness the potential for further development through the adoption of common standards, and welcome a truly new era of digital trade flow management on a global level.”

Source: Maritime Executive, 3 January 2018 (Image credit: David Hundley (LDC)

Luxor Resolution.png

The WCO Policy Commission (PC) has seized the momentum garnered in the domain of electronic commerce and has unanimously adopted the Luxor Resolution at its meeting held this week from 4 to 6 December 2017 in the Egyptian city which gives its name to the Resolution.

The Resolution, developed in close collaboration with all stakeholders, outlines the guiding principles for cross-border E-Commerce addressing eight critical aspects, notably Advance Electronic Data and Risk Management; Facilitation and Simplification; Safety and Security; Revenue Collection; Measurement and Analysis; Partnerships; Public Awareness, Outreach and Capacity Building; and Legislative Frameworks.

The Resolution is aimed at helping Customs and other government agencies, businesses, and other stakeholders in the cross-border E-Commerce supply chain to understand, coordinate and better respond to the current and emerging challenges.

Additionally, and taking into consideration the relevance of the topic and the need to better position the work of the WCO and coordinate ongoing efforts, the PC has also issued a Communiqué to the Eleventh WTO Ministerial Conference (MC11), the Organization’s highest decision-making body, attended by trade ministers and other senior officials from the WTO’s 164 Members, that will take place in Buenos Aires, Argentina, from 10 to 13 December 2017.

The Communiqué strongly reaffirms the WCO’s leadership in providing policy and operational frameworks for the effective management of cross-border E-Commerce from both a facilitation and a control perspective, and clearly demonstrates its strong commitment to supporting the WTO’s Work Programme on E-Commerce, moving forward. Source: WCO 

  • Access the Resolution on Guiding Principles here!
  • Access the Communique here!
  • Visit the WCO’s Cross-Border E-Commerce webpage here!

global-local

Global trade has reached its peak and globalisation is giving way to localisation, which is one of the most “profound changes” currently facing the global economy, says Paul Donovan, global chief economist at UBS Wealth.

Accounting for about a quarter of the world’s GDP, global trade is at a record high. “This is as good as it gets. What we are now starting to see is localisation returning to the manufacturing sector,” Donovan said on Tuesday, speaking at a Sasfin Wealth event.

Advances in robotics and artificial intelligence, collectively referred to as the fourth industrial revolution, mean that factories are mechanising, and are placed closer to companies’ consumer markets.

Swedish retailer H&M is using robotics, manufacturing most of its clothing in Europe, not Asia, enabling it to respond to consumer demand more effectively, Donovan said.

This allows the fast-fashion front-runner to quickly respond to consumer demand and even unseasonal weather.

“The fourth industrial revolution will dramatically alter investment, economics and society.”

At SA’s recent inaugural Singularity University event, disruption innovation expert David Roberts said that 40% of the S&P 500 companies would disappear in the next 10 years as exponential technologies disrupted a host of industries. The average lifespan of an S&P 500 company had decreased from 67 years to 15 years, he said.

While only about 9% of jobs would disappear altogether, automation and digitisation would affect about 40% of jobs, said Donovan. This would require people and companies to adapt to new ways of doing things.

“If your university degree is reliant on memorising a textbook, you are a low-skilled worker. We need companies and countries with workforces that are flexible.”

Donovan predicted a return to the imperial model of trade, where raw materials and intellectual property were imported, while “everything else” happened close to the consumer. “Raw materials will still be globalised, but finished products will be declining as a force for global trade in the years ahead.”

Source: Originally published in Business Day, Ziady. H, September 6, 2017. Globalisation gives way to localisation, in profound change, UBS economist says.

transfer pricing

Tax collection from transfer pricing audits has become more common in Africa, with little sign that it will abate in the near future.

The transfer pricing policies of many multinational companies have attracted widespread attention in the recent past, to the extent that it is considered the “criminal child of tax”.

Transfer pricing is the way a company prices goods and services supplied to a company within the same group. The price should be aligned to a price that the company would offer to a third party.

Nishana Gosai, senior transfer pricing executive at Baker McKenzie, and former head of the transfer pricing unit at the South African Revenue Service (SARS), says that despite having transfer policies in place, most large multinational companies find it difficult to control every aspect of its business. There is a rising perception that transfer-pricing transgressions are criminal and should be met with criminal sanction.

In Tanzania, failure to keep transfer pricing documentation is considered an offence. The punishment is a fine of $30,000 or six months’ imprisonment, or both.

In SA, the revenue authority settled a transfer-pricing dispute with a subsidiary of Kumba Iron Ore to the tune of R2.5bn in 2016. The initial assessment was R6.5bn.

In Tanzania, a large mining company recently received a $190bn tax assessment.

Transfer pricing has been regarded as the major culprit in base erosion and profit shifting (Beps) in which profits are shifted from high-tax jurisdictions to lower tax jurisdictions to limit a global group’s tax exposure.

Gosai emphasises that transfer pricing is not an exact science. It requires judgment and discretion. No one can define the exact price. Finding middle ground requires pragmatism. Information is important in any transfer-pricing dispute, but it seems the burden of proof is becoming insurmountable, she says.

“We are moving into a space where tax administrations are demanding documented proof and evidence to substantiate routine commercial realities,” Gosai says.

Andrew Wellsted, head of the tax team at Norton Rose Fulbright, says that if a company’s affairs or record-keeping are not up to scratch, it faces a long, time-consuming process of getting what the revenue authorities require.

If taxpayers have followed incorrect practices, knowingly or otherwise, it will expose them to tax liabilities and potential disputes. Irrespective of any actual legislative changes, 93% of respondents believe that tax authorities will increase tax audit assessments as a result of proposed Beps initiatives.

“If the audit is conducted in an aggressive fashion, it can be very disruptive to the day-to-day operations of the taxpayer. This needs to be carefully managed by taxpayers and the authorities,” says Wellsted.

Deloitte recently published its survey on the views of multinational companies regarding the greater interest in “responsible tax” and Beps among the media, and political and activist groups.

In the 2017 survey, 460 people in 38 countries responded. The results show that respondents are expecting a major effect on their compliance requirements due to the additional reporting requirements arising from the Beps action plans developed and published by the Organisation for Economic Co-operation and Development (OECD).

The survey shows that 94% of the respondents believe that the additional transfer-pricing reporting requirements will substantially increase their compliance burden when it comes to corporate tax.

More than 90% of the respondents agree that tax structures are under greater scrutiny by tax administrations than a year ago.

“Irrespective of any actual legislative changes, 93% of respondents believe that tax authorities will increase tax audit assessments as a result of proposed Beps initiatives,” Deloitte’s survey found.

Gosai says many multinationals make the mistake of not fully understanding what they are submitting to a revenue authority, the context of such submissions, the potential ways that it could be interpreted by a revenue official and, most importantly, that once submitted, such disclosures cannot be retracted.

Companies tend to over-comply when faced with a request for information from SARS, especially if it is not specific about its scope. There is a danger that information offered by the taxpayer that is not relevant to the question asked may lead to further questions or may create the wrong impression.

Most tax disputes turn either on a legal interpretation of legislation, or a factual issue. The dispute is often centred on whether or not an arm’s-length price (the price offered to an unconnected third party) has been charged.

“This involves complex and detailed economic analysis and is invariably very subjective,” Wellsted says.

“Thus finding the objectively right answer as to what an arm’s-length price could be, is almost impossible,” he says.

Source: Originally published in Business Day, Visser. A, published as “Multinationals face quandary over transfer pricing”, September 6, 2017.

Chamber of Mines

The report claimed there was widespread misinvoicing in primary commodities in developing countries, including South Africa.

The Chamber of Mines on Tuesday called on the United Nations Conference on Trade and Development (UNCTAD) to withdraw its report on trade misinvoicing and acknowledge its shortcomings, saying that the prestigious agency had failed to collect its data accurately.

This comes after the Chamber released the third and final report in a series commissioned to examine the July 2016 UNCTAD report that claimed there was widespread misinvoicing in primary commodities in developing countries, including South Africa.

Also read Maya Forestater’s blog post Misinvoicing or misunderstanding? for an incisive explanation regarding the UN’s claims in its recent report Trade Misinvoicing in Primary Commodities in Developing Countries.

The UNCTAD report titled “Trade Misinvoicing in Primary Commodities in Developing Countries: The cases of Chile, Cote d’Ivoire, Nigeria, South Africa and Zambia”, claimed to have found widespread under-invoicing which, it alleged, was designed by commodities producers to evade tax and other entitlements due to the fiscal authorities.

UNCTAD said some commodity dependent developing countries were losing as much as 67 percent of their exports worth billions of dollars to trade misinvoicing.

For South Africa, the report calculated cumulative under-invoicing over the period 2000-2014 to have amounted to U.S.$102.8 billion; which was U.S.$620 million for iron ore, U.S.$24 billion for silver and platinum, and U.S.$78.2 billion for gold.

UNCTAD revised the report in December, though its fundamentals remained unchanged.

The Chamber of Mines also commissioned Eunomix to compile its own reports which were published in December and February respectively, focusing on UNCTAD’s gold scenarios.

The third report, which was published on Tuesday, deals with the other commodities.

The Chamber said in terms of gold, the UNCTAD study methodology compared reported exports by product and country of destination with the reported imports of the products by those same countries, and did not use other widely available data, including that of Statistics SA and the Reserve Bank.

The Chamber also dismissed all other UNCTAD findings in terms of silver and platinum, and iron ore.

The Chamber said all the factors that UNCTAD did not consider reinforced the point made in the earlier Eunomix reports regarding the lack of rigour and unreliable methodologies used in UNCTAD’s report.

“This is extremely unfortunate given the levels of credence that tend to be given to reports of this UN agency. Accusations of extensive misinvoicing and other illicit financial flows are feeding a growing lack of trust between key stakeholders in the mining industry,” the Chamber said.

“The Chamber of Mines again calls on UNCTAD to withdraw this report and acknowledge its shortcomings.” Source: The Citizen, Business News, 22 Aug, 2017. [Picture: Chamber of Mines]

AGOA States-GAO

“Is the Africa Growth and Opportunity Act (AGOA) always a poisoned chalice from the United States of America?”, asks an editorial in The East African. The Kenya newspaper suggests it appeared to be so after the US allowed a petition that could see Tanzania, Uganda and Rwanda lose their unlimited opening to its market.

This follows the US Trade Representative assenting last week to an appeal by Secondary Materials and Recycled Textiles Association, a used clothes lobby, for a review of the three countries’ duty-free, quota-free access to the country for their resolve to ban importation of used clothes, the The East African continues.

The US just happens to be the biggest source of used clothes sold in the world. Some of the clothes are recycled in countries like Canada and Thailand before being shipped to markets mostly in the developing world.

In East Africa, up to $125 million is spent on used clothes annually, a fifth of them imported directly from the US and the bulk from trans-shippers including Canada, India, the UAE, Pakistan, Honduras and Mexico.

The East Africa imports account for 22 percent of used clothes sold in Africa. Suspending the three countries from the 2000 trade affirmation would leave them short of $230 million in foreign exchange that they earn from exports to the US.

That would worsen the trade balance, which is already $80 million in favour of the US. In trade disputes, numbers do not tell the whole story. Agoa now appears to have been caught up in the nationalism sweeping across the developed world and Trumponomics.

US lobbies have been pushing for tough conditions to be imposed since it was enacted, including the third country rule of origin which would require that apparel exports be made from local fabric.

The rule, targeted at curbing China’s indirect benefits from Agoa through fabric sales, comes up for a legislative review in 2025, making it prudent for African countries to prepare for the worst. Whether that comes through a ban or phasing out of secondhand clothing (the wording that saved Kenya from being listed for a review) is immaterial.

What is imperative is that African countries have to be resolute in promoting domestic industries. In textiles and leather, for instance, that effort should include on-farm incentives for increasing cotton, hides and skins output, concessions for investments in value-adding plants like ginneries and tanneries and market outlets for local textile and shoe companies.

The world over, domestic markets provide the initial motivation for production before investors venture farther afield. Import bans come in handy when faced with such low costs of production in other countries that heavy taxation still leaves those products cheaper than those of competitors in the receiving countries.

The US has also been opposed to heavy taxation of used clothes, which buyers say are of better quality and more durable. For Kenya to be kept out of the review, it had to agree to reduce taxes on used apparel.

These factors have left Agoa beneficiaries in a no-win situation: Damned if you ban, damned if you do not. With their backs to the wall, beneficiaries like Tanzania, Uganda and Rwanda have to think long term in choosing their industrial policies and calling the US bluff.

Beneficiaries must speak with one voice to effectively guard against trade conditions that over time hamper domestic industrial growth. Source: The East African, Picture: US GAO

WCO Transit GuidelinesYes, the info junkie I am – this is what I was really after! The WCO chose to delay the real stuff. The WCO has published its Transit Guidelines, and a substantial compendium its is. Click here to access/download the file (5,4MB)! The WCO Secretary General, Kunio Mikuriya, has noted the possibility of developing a separate publication on transit encompassing national or regional best practices.

At the recent conference on transit, particular attention was given to the difficulties faced by landlocked developing countries.  During a special session on the issue, the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS), several concrete suggestions were made on how to turn land-lockedness into land-linkedness.  The Director General of Paraguay Customs indicated that trade transactions in his country incur 30% additional costs due to Paraguay’s geographical limitations.  The Representative from UN-OHRLLS confirmed that on average, LLDCs bear up to 40 % additional costs on trade transactions.  The investment being made in hard infrastructure, such as roads, rail infrastructure, intermodal logistical hubs and dry inland ports, remains one of the main priorities in order to improve the situation.  Participants confirmed the need for harmonization and simplification of border control procedures, as well as the promotion of ICT for the management of transit systems.  This is of significant importance to LLDCs in Africa of which there are eight!.

Representatives from  several of Africa’s Regional Economic Communities present at the Conference, such as the Common Market for Eastern and Southern Africa (COMESA) and the Economic Community of West African States (ECOWAS), also highlighted the need to ensure that establishment functioning legal frameworks are in place to address the main challenges of regional transit regimes.

The use of existing information and communication technology (ICT) solutions was also raised at the Conference.  Today, numerous technologies are available to secure the movement of goods, such as electronic Customs seals which are actively used on containers transported from China to Europe and have proved to be reliable and efficient.  The regional electronic tracking system used for goods transiting between Uganda, Kenya and Rwanda was also mentioned as a successful project resulting from cooperation between neighbouring Customs administrations.  The Representative from ECOWAS informed participants that work has started to connect the IT systems of ECOWAS Members.  Regarding the challenges related to interconnectivity, the benefits of global implementation of the WCO Data Model were pointed out.

Railway transport is playing an increasingly important role in moving goods between countries in Eurasia, as explained by the Representatives from China and Russia Customs as well as the Representative from the Intergovernmental Organisation for International Carriage by Rail (OTIF).  It was pointed out that block trains now bring goods from China to Europe through Russia and Central Asian countries within a fortnight; four times faster than via maritime routes.  It is worth nothing that in the absence of a global instrument regulating the movement of trains across borders, which would obviously be of benefit to transit operations, bilateral agreements are the norm.

Transit systems, such as the European Union’s New Computerised Transit System (NCTS), the Convention on International Transport of Goods Under Cover of TIR Carnets (TIR Convention) and relatively new transit facilitation initiatives in the Eurasian Economic Union (EEU) and the Central Asia Regional Economic Cooperation (CAREC), were also discussed in detail.  Turkey, a user of two transit systems – NCTS and TIR – highlighted the importance of digitalization of the transit processes and explained its involvement in the e-TIR project aimed at providing an exchange platform for all actors (Customs authorities, holders and guarantee chains) involved in the TIR system.  In this regard, Turkey has participated in two pilot projects with two neighbouring countries, namely Georgia and Iran. Source: the WCO

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At least 30 representatives of the Southern African Customs Union (SACU) recently met in Maseru – capital of the ‘Mountain Kingdom’ – Lesotho, to undertake a 5-day training workshop on the WCO Data Model, between 29 May to 2 June.

The training formed part of capacity building support to Member States to implement IT connectivity and information exchange between SACU Customs Administration. The training was facilitated by WCO Data Model Expert, Mr Carl Wilbers from South African Revenue Service (SARS) and GEFEG.FX software tool Expert, Mr. Martin Krusch from GEFEG, Germany.

The recent ratification of Annex E to the SACU agreement – on the use of Customs-2-Customs (C-2-C) Data Exchange between member states – paves the way for participating countries to exchange data within the terms of the agreement on the basis of the GNC Utility Block, also greed to by the respective member states. It also coincides with recent work on the establishment of a SACU Unique Consignment Reference (UCR) which must be implemented by the SACU countries in all export and transit data exchanges between themselves, respectively.

Just recently, in May 2017, the heads of SACU Customs administrations were presented a prototype demonstration of data exchange between the respective systems of the South African Revenue Service and the Swaziland Revenue Authority.

The WCO Data Model provides a maximum framework of standardized and harmonized sets of data and standard electronic messages (XML and EDIFACT) to be submitted by Trade for Cross-Border Regulatory Agencies such as Customs to accomplish formalities for the arrival, departure, transit and release of goods, means of transport and persons in international cross border trade.

The course was extremely comprehensive, providing SACU customs users the full spectrum of the power and capability which the GEFEG.FX software tool brings to the WCO’s Data Model. GEFEG is also the de facto Customs data modelling and data mapping tool for several customs and border authorities worldwide. It significantly enhances what was once very tedious work and simplifies the process of mapping data, ensuring that the user maintains alignment and consistency with the most up-to-date version of WCO data model. One of the more significant capabilities of the GEFEG.FX software is its reporting and publishing capability. For examples of this please visit the CITES electronic permitting toolkit and the EU Customs Data Model webpages, respectively. Pretty awesome indeed!

Users had the opportunity of mapping the SACU agreed data fields both manually as well as using the tool. The SACU group was able to add additional enhancements to its agreed data model, providing an added benefit of the work session.

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The notices detailing President Donald Trump’s promise to build a “big, attractive wall” were made public late Friday (3 April 2017) by Customs and Border Protection. The request from the Customs and Border Protection Department called for a 30-ft-high wall, but said that plans to build a wall minimum 18 ft in height may be acceptable.

“The north side of wall (i.e. USA facing side) shall be aesthetically pleasing in color, anti-climb texture, etc., to be consistent with general surrounding environment”, reads the RFP. In the documents, CBP says that the side facing the US must also be “aesthetically pleasing” in “color, anti-climb texture etc., to be consistent with general surrounding environment”.

And that’s before a new Trump budget, which came out Thursday, includes $2.6 billion over two years to begin construction of the wall. The government is asking for a 9-meter-high concrete barrier, extending 2 meters underground, built to be “physically imposing” and capable of resisting nearly any attack, “by sledgehammer, vehicle jack, pickaxe, chisel, battery-operated impact tools, battery-operated cutting tools [or] oxy/acetylene torch”.

Earlier this week Mexican lawmakers increased pressure on Mexican construction firms tempted to help build deeply reviled wall.

The proposal document asks contractors for 30-foot-long prototypes and mock-ups of 10 feet by 10 feet. Although Trump made it a centerpiece of his presidential campaign to get the Mexican government tol pay for the wall, expectations are low that the U.S.’s southern neighbor will give money while it’s being built or afterwards.

The specifications leave almost all of the design work to interested bidders, who now have about two weeks to develop and submit their plans, known as proposals. Trump called for the wall to stop illegal immigration into the United States from Mexico and to cut off drug-smuggling routes.

Senate Majority Leader Mitch McConnell (R-Ky) said in January that the wall would cost between $12 billion and $15 billion, though other estimates have put the price tag as high $25 billion.

There was some misplaced optimism that Donald Trump would immediately jettison all of his inane campaign promises upon taking office; that the threat of a wall at the Mexican border would be quietly tabled for its obvious insanity.

Proponents of a wall make two questionable assumptions: First, that there will be a continued north flow of refugees. Friday’s release did not address the overall cost of the wall. The city of Berkeley, California, said last week it would refuse to do business with any company that’s part of the border wall. The cost of about 1,000 miles of wall could cost $21.6 billion between now and 2020. Published on Aliveforfootbal website

Screen Shot 2017-03-12 at 13.18.00The recent WCO publication of a Study Report on E-Commerce is based on a short survey answered by the Organization’s Members. The Report compiles Customs administrations’ practices as well as their ongoing and/or future initiatives related to the processing of cross-border low-value e-commerce.

Current practices, issues and challenges as well as initiatives and potential solutions are presented in each of the survey sections: Facilitation; Risk Management; Data Exchange/Cooperation with E-Commerce Operators; Control and Enforcement; Revenue Collection. Case studies are also widely used throughout the document to illustrate specific practices.

The survey was undertaken as part of the WCO Work Plan on Cross-Border E-Commerce aimed at addressing cross-cutting issues in relation to e-commerce and coming up with practical solutions for the facilitated clearance of low-value shipments, including appropriate duty/tax collection mechanisms and control procedures.

An overview of the WCO’s work so far, including tools, reports and interim recommendations issued by the WCO Working Group on E-Commerce (WGEC), as well as work to be completed in the future, is available here. Source: WCO

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Trade Facilitation Agreement, 22 February 2017.

A major milestone for the global trading system was reached on 22 February 2017 when the first multilateral deal concluded in the 21 year history of the World Trade Organization entered into force. In receiving four more ratifications for the Trade Facilitation Agreement (TFA), the WTO has obtained the two-thirds acceptance of the agreement from its 164 members needed to bring the TFA into force.

Rwanda, Oman, Chad and Jordan (pictured above) submitted their instruments of acceptance to WTO Director-General Roberto Azevêdo, bringing the total number of ratifications over the required threshold of 110. The entry into force of this agreement, which seeks to expedite the movement, release and clearance of goods across borders, launches a new phase for trade facilitation reforms all over the world and creates a significant boost for commerce and the multilateral trading system as a whole.

Full implementation of the TFA is forecast to slash members’ trade costs by an average of 14.3 per cent, with developing countries having the most to gain, according to a 2015 study carried out by WTO economists. The TFA is also likely to reduce the time needed to import goods by over a day and a half and to export goods by almost two days, representing a reduction of 47 per cent and 91 per cent respectively over the current average.

Implementing the TFA is also expected to help new firms export for the first time. Moreover, once the TFA is fully implemented, developing countries are predicted to increase the number of new products exported by as much as 20 per cent, with least developed countries (LDCs) likely to see an increase of up to 35 per cent, according to the WTO study.

At present, 10 out of 24 Members of East and Southern Africa (ESA) have ratified the TFA. These are; Mauritius, Botswana, Lesotho, Kenya, Zambia, Seychelles, Madagascar, Swaziland, Mozambique and Rwanda. So where to now South Africa?

The UK’s Daily Mail  reports the arrival of a freight train in east London has marked a new era for the 2,000-year-old trading route. It is the first freight train service from China to the UK. The route known as the ‘Silk Road’ once helped bring a wealth of goods from China to Europe.

The train pulled in to Barking after an 18-day journey from Yiwu, a wholesale market town in the eastern Chinese province of Zhejiang. It had passed through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France, finally crossing under the English Channel into Britain.

Laden with 68 twenty-foot equivalent containers, the train brought in a cargo of small commodities including household items, clothes, fabrics, bags, and suitcases.

The Silk Road Economic Belt and the 21st-century Maritime Silk Road, also known as The Belt and Road (abbreviated B&R), One Belt, One Road (abbreviated OBOR) or the Belt and Road Initiative is a development strategy and framework, proposed by Chinese paramount leader Xi Jinping that focuses on connectivity and cooperation among countries primarily between the People’s Republic of China and the rest of Eurasia, which consists of two main components, the land-based “Silk Road Economic Belt” (SREB) and oceangoing “Maritime Silk Road” (MSR). The strategy underlines China’s push to take a bigger role in global affairs, and its need for priority capacity cooperation in areas such as steel manufacturing. Wikipedia.

Ten containers were taken off at the German hub of Duisburg. The remainder arrived in London at Barking’s Eurohub freight terminal. The service is faster than sending goods by sea. Weekly trains will initially be run to assess demand.

A number of different locomotives and wagons were used as the former Soviet Union states have a larger rail gauge than the other countries involved. China Railway already has freight services to a number of European destinations, including Hamburg and Madrid.

They are part of China’s One Belt, One Road programme of reviving the ancient Silk Road trading routes to the West, initially created more than 2,000 years ago.

Run by Yiwu Timex Industrial Investment, the Yiwu-London freight service makes London the 15th European city to have a direct rail link with China after the 2013 unveiling of the ‘One Belt, One Road’ initiative by Chinese premier Xi Jinping.

UK Prime Minister Theresa May  said the relationship with China remains ‘golden’ as she seeks to bring in billions of dollars in Chinese investment as Britain prepares to leave the European Union. Read the full original Daily Mail article here!

WTO LogoThe WTO announced that the following countries have submitted their instruments of acceptance to the WTO Trade Facilitation Agreement (TFA):

  • 104. Ghana (4 January 2017)
  • 105. Mozambique (6 January 2017)
  • 106. St. Vincent and the Grenadines (9 January 2017)

Only four more ratifications from members are needed to bring the TFA into force. The TFA will enter into force once two-thirds of the WTO membership has formally accepted the Agreement.