Towards a robust, competitive trading environment

A cargo ship docked at the Port of Port of Spain. Recent changes to the method of releasing containers caught many port users unawares.   File Photo
A cargo ship docked at the Port of Port of Spain. Recent changes to the method of releasing containers caught many port users unawares. File Photo

Trade facilitation is a fundamental driver for economic prosperity and sustainable development. Initiatives benefit both the private and public sectors as it increases administrative efficiency and reduces transactions costs associated with doing business. Ultimately, effective trade facilitation will propel economic development and a competitive business environment.

According to the World Trade Organisation’s (WTO) Trade Facilitation Facility, traders from developing and developed countries have long pointed to vast amount of “red tape” that still exists in moving goods across borders, creating a burden on small and medium-sized enterprises. To address this, WTO members concluded negotiations on a landmark Trade Facilitation Agreement (TFA) at their 2013 Bali Ministerial Conference.

The TFA represents “the simplification and harmonisation of international trade procedures; that is the activities, practices and formalities involved in collecting, presenting, communicating, and processing data required for the movement of goods in international trade”. Broadly speaking, trade facilitation involves at the border measures, infrastructure relating to trade, simplification of trade procedures and documents, non-tariff measures, customs procedures and trade security.

As a member of the WTO, Trinidad and Tobago ratified the TFA in July 2015 and subsequently launched several reforms to improve trade facilitation and the ease of doing business in TT. Some of these included: implementation of the single electronic window (SEW) for trade and business facilitation (TTBizLink); reduction of the time taken for container clearance; integration of the TTBizLink system with customs border control systems (Asycuda); the use of modern risk analysis techniques which allows compliant importers and exporters to have access to automated import procedures; institution of an automated payment system; and enhanced coordination and cooperation between the Ministries of Trade, Finance, and Agriculture.

However, since the onset of covid19, many efforts have regressed and businesses have suffered grave losses from inefficiencies as well as lengthy processing time of shipments. For example, recent changes to the method of releasing containers caught many port users unawares. This is indicative of challenges that the local private sector often faces, where changes are made in trade facilitation procedures without sufficient communication or consultation with principal users. This results in importers being faced with increased wait time for appointments at the airport bonds and increased container clearance times at the seaports. Containers awaiting examination incur demurrage (at a rate of US$100 per day) and storage fees. When one considers that all the shipping lines are foreign owned, it means that foreign exchange is leaving the country, exacerbating an already difficult situation of access to foreign exchange. Ultimately, there is a negative and unsustainable impact on the cost of doing business.

The private sector needs are clear. Traders want transparent, accessible and predictable rules and procedures; harmonisation of legislation and regulations; a single access point for all public services and agencies; simple and efficient administrative processes; a fair system; and to be part of the policy making process.

To move forward, a number of actionable objects and reforms can be implemented:

1. Utilize the Trade Facilitation Agreement Facility (TFAF) which offers technical assistance and capacity building initiatives, in which best practices can be discussed and shared.

2. Educate and train customs officers, immigration officers and other border controllers to effectively use the new online systems

3. Quickly implement the enhanced risk management system within a centralised unit which will enable efficient clearing of some shipments and improve efficiency.

There are great potential gains from trade facilitation. Public entities will profit in terms of enhanced trade tax collection, better use of resources and increased trader compliance. A more efficient and transparent delivery of public services will allow the administration to maintain high security levels and effective government control, while decreasing opportunities for corruption. Traders will gain in terms of higher predictability and speed of operations and lower transaction costs, resulting in more competitive exports on global markets.

(Content sumbitted by the TT Chamber of Industry and Commerce)

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