EU pledges new financial support to help developing countries implement WTO Trade Facilitation Agreement

In a move to support the timely implementation of the World Trade Organisation (WTO) Trade Facilitation Agreement, which will help developing countries by simplifying, harmonising and modernising international border procedures, Development Commissioner, Andris Piebalgs and Trade Commissioner, Karel De Gucht, today committed to cover a significant share of the funding needs of developing countries to implement the Agreement.

The EU's support, worth some €400 million over five years, responds to demands for help from countries most in need in order to comply with and draw the full benefit of the deal for growth and development. The Agreement was approved at the WTO's 9th Ministerial Conference in Bali, Indonesia, on 3-6 December 2013.

EU Development Commissioner, Andris Piebalgs said: "Investment in trade is fundamental to boosting the growth and development of a country. EU support to trade has helped to lift millions of people out of poverty in the last decade and will remain key to our development work. We want make sure that every country can enjoy the benefits that implementation of the Trade Facilitation Agreement can offer; that’s why we are ready to go the extra mile and help our partner countries which needs it to reach their full potential through trade.”

EU Trade Commissioner Karel De Gucht added: “The EU wants to send a decisive message that swift implementation of this Trade Facilitation Agreement is essential for developing countries. The agreement will make it easier and cheaper for developing countries to trade, with the biggest gains realised in south-south trade, thereby facilitating their integration into regional and global value chains. Returns on a relatively modest up-front investment will be considerable in terms of growth, jobs and development”.

The EU will aim to maintain at least its current level of support to trade facilitation over a five-year period; starting from the signature of the Trade Facilitation Agreement, namely €400 million over five years, or over a third of developing countries’ estimated needs, primarily through regular EU aid channels. Within this amount, it also stands ready to make a contribution of up to €30 million to a dedicated international trade facilitation facility for the most urgent actions for aligning legislation and procedures in developing countries to the new agreement.

EU support will be provided in the framework of its regular Trade-Related Assistance to developing countries. The EU is currently working on the allocation of its development aid for the period 2014-2020, and time is therefore ripe for developing countries to reflect their trade needs, including for trade facilitation, into their development strategies and include them in their priorities for EU aid for the period 2014-2020. EU aid will be financed partly from the EU budget, subject to the approval of the necessary legal instruments and partly from the European Development Fund (EDF), currently in the process of ratification by EU Member States.

At the same time, the EU recognises the potential value of a dedicated facility jointly funded by the major donors to support the Trade Facilitation Agreement. Such an international facility would provide initial fast-track funding and fill-in gaps in on-going or planned funding for making compliance with the Trade Facilitation Agreement fully and rapidly possible.

Trade facilitation refers to measures aimed at simplifying, modernising and harmonising merchandise import, improving border tax collection, export and transit procedures, especially customs requirements but also those of the many other agencies operating at borders. Possible measures include simplifying rules, standardising and reducing the number of custom forms, and computerisation. The WTO Trade Facilitation Agreement creates an international framework for these reforms, thereby spreading the benefits of trade facilitation across the globe.

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