Trade Facilitation - IDB

Trade facilitation is key for boosting trade in intermediate products and particularly critical for developing countries. Coordination among national border agencies and better cross-border cooperation is particularly effective for reducing trade costs and enabling the private sector to benefit from RTAs. There are some estimates that at the global level, 75% of delays are due to inefficient processes, while only 25% are attributable to inadequate infrastructure.

Several LAC countries have embarked on an effort to reduce trade costs related to the “software” of integration to facilitate trade, by streamlining administrative processes and making them more efficient, and to make it more secure. To this end, they are adopting the Single Window for Foreign Trade (see Successful Projects), the Authorized Economic Operator (AEO), special procedures in the form of the International Transit of Merchandise (TIM, for its Spanish acronym), and making investments in the “hardware” of integration, that is, in physical infrastructure, such as stretches of highways in integration corridors and in border crossings to improve cross-border transit. Coordinated Border Management (CBM) addresses the question of how border agencies can improve effectiveness and efficiency, while balancing competing concerns for national security and trade facilitation.

The IDB has worked with the Bahamas, Costa Rica, Ecuador, Jamaica, Nicaragua, Peru, and Uruguay in the establishment of AEO programs. Mexico and Korea concluded an AEO Mutual Recognition Agreement (MRA) in March 2014 with IDB support. In April 2015, an AEO MRA was signed between the Dominican Republic and Korea, and negotiations for an AEO MRA between Korea and Peru were announced in August 2015.

The IDB designed, financed and led the implementation of the TIM, including the training of implementing officials, which is now managed by the Secretariat for Central American Economic Integration (SIECA). The system uses the Internet to connect all agencies’ risk-analysis and cargo-control systems. The TIM is also under implementation in Colombia and Ecuador.

The IDB is working with Costa Rica, Ecuador, Honduras, Nicaragua, and Panama on CBM.

The IDB, in coordination with INTAL and the Consejo Suramericano de Infraestructura y Planeamiento (COSIPLAN-IIRSA), has already implemented three editions of a virtual tutored course on Freight Transport and Logistics Policy. This effort has redundant in more than 120 public officials trained.