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New UNECE recommendation to strengthen private sector participation in National Trade Facilitation Bodies

New UNECE recommendation to strengthen private sector participation in National Trade Facilitation Bodies

International trade facilitation

Strong private sector engagement positively impacts the relevance, legitimacy, and credibility of national trade facilitation bodies (NTFBs) and encourages a business-centric approach to trade facilitation. Over the past several years, governments, donors and international organizations have invested in establishing such bodies and currently they exist in many countries around the world.

According to the latest 2023 United Nations Digital and Sustainable Trade Facilitation Survey, 111 out of 163 respondent economies have established NTFBs and 37 have partially established NTFBs. In the UNECE region, 31 out of 48 countries have established NTFBs and 9 have partially established NTFBs.

Yet not all NTFBs are successful in securing active private sector engagement due to multiple barriers, such as the cost of in-person participation, knowledge and language gaps, conflicting interests and perspectives, lack of reputation, lack of political commitment to the NTFB, lack of feedback and results.

Given this context, the new recommendation (Recommendation No. 48) adopted at the 29th Plenary of the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) provides guidance on how to actively strengthen access to NTFBs for private sector representatives, to encourage private sector representatives to engage and to strengthen the impact of NTFBs for the private sector, as well as to harness the benefits of their participation for countries' overall progress towards the Sustainable Development Goals.  

A motivational driver for governments to set up such a body is the implementation of the World Trade Organization (WTO) Trade Facilitation Agreement (TFA), which entered into force in 2017. Pursuant to Article 23.2 of the TFA, governments must set up a national committee for the implementation of the TFA or entrust this function to an existing body.

The new recommendation lists six basic principles to be met for trade facilitation consultation approaches, including for NTFBs: partnership and trust, transparency, managing differences of opinion and interests, results orientation, consultations as an iterative process with respect for time and timing, and accountability and responsibility.

Enhanced engagement with the private sector offers multiple benefits. First of all, consultation with the private sector leads to holistic solutions that respond better to actual trade facilitation needs and problems. The private sector has direct, first-hand knowledge of bottlenecks and inefficiencies and can provide meaningful input on the pros and cons of government regulations and procedures.

Secondly, private sector representatives can share their knowledge of solutions and practices with the government, such as those gathered from piloting new technologies like artificial intelligence (AI), blockchain technology and the internet of things (IoT). Involving and learning from the private sector can increase innovation within the public sector and promotes fresh thinking.

Thirdly, the private sector is an invaluable contributing partner in trade facilitation. This refers both to the private sector internalizing and taking responsibility for compliance, as well as their ability to contribute information and data for problem identification and decision-making.

Fourthly, encouraging women-led businesses and their representatives to participate in NTFBs would enable a gender-inclusive approach to trade facilitation initiatives.

Finally, it is well known that the legitimacy and acceptance of decisions and reforms is often contingent upon private sector consultations. A trusted dialogue is key to overcoming resistance to change from certain stakeholders.

This new recommendation builds on previous Recommendation No. 4, which stressed that governments and the trading community should aim to establish NTFBs that embrace the views and opinions of all stakeholders and pursue agreement, cooperation and collaboration. Furthermore, Recommendation No. 40 presented basic principles for trade facilitation consultation approaches and highlighted the importance of NTFBs to facilitate private-public dialogue.