Written by Arántzazu Sánchez Belastegui and Roxana Cortina Mendoza, Article No. 127 [UNCTAD Transport and Trade Facilitation Newsletter N°104 - Fourth Quarter 2024]
Article 23.2 of the World Trade Organization (WTO) Trade Facilitation Agreement (TFA) mandates National Trade Facilitation Committees (NTFCs) to be established or maintained in all WTO Members. The objective is to facilitate both domestic coordination and implementation of the provisions of the Agreement. With this, the UN-CEFACT Recommendation no. 4 on National Trade Facilitation Bodies, which was first published in 1974[1] and sets out how and NTFC is set-up gains wider relevance.
A National Trade Facilitation Committee (NTFC) is a platform or mechanism, preferably with relevant participation of both public and private sector stakeholders established by a country to coordinate and facilitate the implementation of policies, procedures and activities for facilitating cross-border trade.
Over the past decades the importance of National Trade Facilitation Committees has increasingly received wider recognition as drivers of trade facilitation reforms.
The publication of studies, best practices and data on NTFCs has also contributed to convincing countries that having an NTFC strongly contributes to accelerating the implementation of trade facilitation reforms. However, to date, it remains difficult to establish a correlation between a well-functioning NTFC and the country’s capacity to implement trade facilitation reforms.
While a majority of countries report having established an NTFC, it remains unclear to what extent these bodies are fully operational and actively delivering on their mandates.[2]
What we have learned so far
In early 2024, UNCTAD launched a global survey aiming at assessing the current level of operationalization of existing NTFCs. Information was gathered in February and March 2024, surveying activities conducted, and outcomes achieved by NTFCs during 2023. A total of 52 countries responded to the survey.[3]
This article presents the findings of the survey. Its aim is to underscore the continuous need for both domestic and international backing for NTFCs, particularly against the backdrop of ongoing disruptions in global supply chains and international trade, in particular, the transformative impact of e-commerce. Trade facilitation has become a crucial policy to ensure that essential goods and services reach the intended destination on time and at the lowest possible cost. Against this backdrop, NTFCs have a key role in streamlining border procedures and controls, thereby mitigating complexities and costs associated with international trade transactions.
In essence, the significance of NTFCs lies in their role of coordinating and facilitating the harmonization and streamlining of trade processes while simultaneously upholding robust compliance standards. As such, concerted support for NTFCs is imperative to foster a transparent and predictable environment conducive for efficient and resilient global trade.
The majority of NTFCs met one or more times in 2023
Nearly two-thirds of NTFCs (65 per cent) convened between 1 and 4 times in 2023, indicating substantial level of NTFC activity. Conversely, 12 per cent of surveyed NTFCs reported meeting between 7 and 13 times, showcasing a higher level of engagement.
In contrast, approximately a quarter of NTFCs (24 per cent) did not convene at all during 2023, with reasons ranging from operational challenges within the Secretariat, conflicting priorities, lack of support from leadership and stakeholders to constraints such as personnel changes, structural modifications, or even conflict situations. It is worth noting that a lack of meetings does not always signify inactivity, as some NTFCs clarified that activities were carried out through technical sub-committees or remote meetings.
It is UNCTAD’s experience that coordination is most efficient when meeting regularly. We propose quarterly meetings to sustain NTFC engagement. Yet, in certain nations, there's a trend of substituting general NTFC assemblies with focused technical sessions involving pivotal agencies overseeing specific project execution.
NTFCs are yielding tangible results but require enhancing their efforts in resource mobilization.
As emphasized in the UNCTAD 2017 study on NTFCs,[4] when NTFCs yield tangible results, which is particularly important for the private sector, members are more likely motivated to sustain their engagement. Such tangible results, moreover, attract high-level support, fostering the long-term sustainability of the NTFC.
Out of the 52 NTFCs that participated in the survey, 12 (23 per cent) were unable to identify any specific activities or outcomes of their NTFC in 2023.
Involving the private sector as a full member of the NTFCs will bring positive direct results for the implementation of trade facilitation reforms.
Three out of every four committees reported utilizing the NTFC as a platform for engaging with relevant stakeholders from the private sector. This emerged as the most cited outcome among the surveyed countries, underscoring the effectiveness of NTFCs in facilitating consultations with the private sector in accordance with Article 2.2 of the WTO Trade Facilitation Agreement. Despite the encouraging outcomes, there persists a reluctance in certain countries to fully integrate the private sector into consultative processes as equal members. This hesitancy, if prolonged, could potentially increase resistance among the Committee’s primary beneficiaries, the traders, against the reforms proposed by the Committee.
NTFCs need to prioritize capacity building initiatives and should adopt digital tools for effective monitoring of trade facilitation reforms.
Monitoring the implementation of the WTO TFA and other trade facilitation reforms emerged as a primary activity and/or outcome for two-thirds of the committees (67 per cent), aligning with their fundamental mandates. Similarly, participating in meetings and/or exchanging experiences with other NTFCs at regional and/or international levels was a common activity for two-thirds of the committees (67 per cent).
Half of the committees reported engaging in the following activities and/or achieving the following outcomes in 2023:
- Drafted and/or transmitted notifications to the WTO (51 per cent)
- Advised or promoted the implementation of international or regional trade facilitation obligations and standards, or other trade facilitation reforms (51 per cent)
- Developed or monitored a national trade facilitation roadmap or work plan (53 per cent)
- Collected and disseminated information on trade facilitation (56 per cent)
- Advised governmental agencies, made recommendations, or provided special advice on trade facilitation (58 per cent)
- Actively participated in updating international reports and indexes by responding to surveys or questionnaires in a timely manner (58 per cent)
- Organized or participated in training courses or capacity-building sessions in trade facilitation (62 per cent)
Less frequently reported activities and outcomes indicated by the responding NTFCs include:
- Negotiated or promoted trade facilitation agreements (36 per cent)
- Conducted studies or performed diagnostics in trade facilitation issues (38 per cent)
- Developed/updated an action plan for the NTFC Chair and Secretariat (42 per cent)
- Communicated information about the NTFC and its work (for instance through website announcements, press releases, newsletters, social media) (44 per cent)
In addition to these activities, 33 and 20 per cent of NTFCs mentioned having updated respectively their Terms of Reference and their Secretariat’s Terms of Reference. This is not surprising because such activities may not necessarily require annual revision.
NTFCs should increase their efforts to mobilize domestic and international resources.
As evidenced over the years in UNCTAD's NTFC studies,[5] the scarcity of financial resources remains a significant sustainability hurdle for NTFCs. Despite this challenge, the survey revealed that 44 per cent of committees did not engage in any resource mobilization activities in 2023. Among those that made efforts, 44 per cent reported undertaking fundraising activities. For instance, a third of committees (33 per cent) stated that they drafted or presented project proposals in the past year. A minority of committees (9 per cent) developed a resource mobilization strategy, while one in five committees reported designating a donor coordinator. Among those surveyed, 62 per cent mentioned that mobilizing resources would be critical for improving the operational performance of their NTFC in 2024.
Members of NTFCs are becoming more involved, shifting from primarily supervisory roles to actively engaging in implementing tangible trade facilitation reforms and resolving issues. This strengthens the connection between the NTFC's mandate and its practical initiatives.
Half of the NTFCs (53 per cent) reported contributing to the implementation of trade facilitation projects within the scope of the WTO Trade Facilitation Agreement. Notable measures such as single window, time release studies, and coordinated border management were highlighted as key areas where NTFCs played a pivotal coordination role. Sixty per cent of committees stated their involvement in simplifying trade procedures in 2023.
Over a third of the committees (38 per cent) are actively involved in implementing transparency measures such as trade information portals. Almost half of the committees (44 per cent) have engaged in discussions surrounding supply chain disruptions, including pandemic preparedness and congestion at ports or borders.
Transit coordination, however, remains largely beyond the scope of work of NTFCs, with only one in five (22 per cent) reporting an active role in this area.
NTFCs perform more efficiently when keeping abreast of emerging topics and adapt their mandates and scope of work accordingly to address evolving needs.
Vital areas such as mainstreaming gender in trade facilitation, integrating climate change and green policies into the national trade facilitation agenda, and implementing technical assistance projects beyond the WTO Trade Facilitation Agreement's scope remain largely unexplored by many committees. This suggests that while there is a clear progress in implementing the WTO TFA, NTFCs require assistance in transitioning from a reactive stance to an active one in embracing new technologies and global trends.
Strengthening the capacities of NTFC members should be prioritized not only by countries but also by international organizations and the donor community.
27%
of NTFCs
Adopted decisions or actions to mainstream gender in trade facilitation
25%
of NTFCs
Implemented technical assistance projects and programs beyond the scope of the WTO TFA
18%
of NTFCs
Incorporated climate change and green policies in the trade facilitation national agenda
NTFCs were queried about essential activities to undertake in 2024 to enhance the operational efficiency of their committees. The majority of NTFCs emphasized the importance of capacity building in crucial areas. Results indicate that nearly three-quarters of NTFCs (71 per cent) still need to enhance their monitoring and evaluation capacities. For 62 per cent of the NTFCs, enhancing NTFC members' knowledge of trade facilitation is deemed critical. Two-thirds of committees believe that increasing NTFC engagement in implementing concrete trade facilitation measures is vital for improving operational efficiency.
Improving NTFC communication and coordination, along with strengthening the NTFC Secretariat, were also highlighted by a half of the committees. Only 29 per cent of committees deemed institutional changes (NTFC legal framework, structure, composition, procedures) as critical activities for 2024.
Policy recommendations
To enhance the functionality and impact of NTFCs, the following strategic actions are recommended.
- Resource mobilization: NTFCs should develop comprehensive resource mobilization strategies that include identifying potential funding sources, drafting effective project proposals, and appointing dedicated donor coordinators.
- Focus on technical sessions and regular meetings: By balancing focused technical sessions with regular full committee meetings, NTFCs can ensure specialized and relevant attention to both critical projects and comprehensive oversight.
- Involving the private sector as a full member of the NTFCs will bring positive direct results to the implementation of trade facilitation reforms.
- National Trade Facilitation Committees need to prioritize capacity building initiatives and the adoption of digital tools for effective monitoring of trade facilitation reforms.
- Enhanced capacity building: Continuous training and development tailored to the needs of NTFC members are essential and should be supported by both national initiatives and international cooperation aiming at building a well-informed committee capable of managing complex trade facilitation landscapes.
- Adaptation to emerging challenges: NTFCs should remain vigilant and adaptable to new challenges and emerging topics such as gender mainstreaming, digital trade facilitation, sustainability in trade practices, and global economic shifts. This includes revising their mandates and operational scopes to stay relevant and effective.
By addressing these strategic areas, NTFCs can significantly improve their efficacy as central coordinators and facilitators of trade facilitation reforms, ultimately contributing to smoother trade processes and economic growth.
UNCTAD’s Empowerment Programme for Trade Facilitation
Continuously attentive to the needs of NTFCs, UNCTAD remains committed to strengthening the capacities of trade facilitation committees through its evolving suite of tools and programs.
- In 2024, UNCTAD unveiled a thoroughly revamped version of the Reform Tracker, offering NTFCs a more adaptable and user-friendly platform for monitoring and overseeing the implementation of trade facilitation reforms.
- Through its e-Learning & Capacity Building initiatives, UNCTAD continues to furnish NTFCs with access to training on emerging themes and global trends, including blockchain applications for trade facilitation, gender mainstreaming in trade reforms, climate-smart trade facilitation practices, communication and resource mobilization
- In 2023, UNCTAD launched its Intensive Executive Training program for NTFC Secretariats and Chairpersons, which has been successfully conducted in numerous countries worldwide.
Learn more about our work: https://unctad.org/tf
[1] After the first edition in 1974, there were three more revisions done subsequently in 2000, 2001, and 2020. (Source: https://unece.org/trade/uncefact/tf_recommendations)
[2] Only 10 out of 163 economies surveyed by the UN in 2023 declared not having established or started the establishment of the NTFC (Source: UN Global Survey on Digital and Sustainable Trade Facilitation).
UNCTAD Database for NTFCs includes over 130 profiles of NTFCs. The number of new profiles and updates has been increasing over the past years.
[3] In the sample of 52 countries:
- 12 per cent are developed countries, 54 per cent are developing countries and 35 per cent are least developed countries.
- 44 per cent are from Africa, 17 per cent from the Americas, 13 per cent from Asia, 21 per cent from Europe, 4 er cent from Oceania.
[4] National Trade Facilitation Committees in the quest for sustainability (2022) https://unctad.org/system/files/official-document/dtltlb2022d2_en.pdf , page 39
[5] UNCTAD studies on NTFCs are listed on: https://unctad.org/tfc
Authors:
Arántzazu Sánchez Belastegui | Economic Affairs Officer| Division on Technology and Logistics, Trade Facilitation Section, UNCTAD | [email protected]
Roxana Cortina Mendoza | Economic Affairs Officer| Division on Technology and Logistics, Trade Facilitation Section, UNCTAD | [email protected]
