It has been proven that trade agreements, individually, do not guarantee the development of a country's foreign trade.
We explained this in a previous article, which limited culture in this development that States have been promoting since the 1990s.
Today, just over 25 years after the creation of the World Trade Organization, the WTO is promoting the development and implementation of the Trade Facilitation Agreement Facility, which aims to reduce the many bureaucratic obstacles that substantially limit international trade.
The Dominican Republic is a signatory to the WTO's TFA, having ratified the agreement in February 2017. Since then, there has been a dynamic public and private sector effort focused on monitoring and complying with the agreement, but more importantly, on optimizing the "red tapes" (bureaucratic burdens) identified in the agreement, which slow down the country's international trade development.
There are several working groups and working groups that are working to positively impact the TFA. However, we will focus on some of the mechanisms that have taken place in recent years and that have undoubtedly yielded progress in trade facilitation.
On April 28, 2017, the Executive Branch formally created the National Trade Facilitation Committee (CNFC), responding to the call of the World Trade Organization in the agreement signed that same year. This Committee was established to facilitate internal coordination and implementation of the provisions of the WTO Trade Facilitation Agreement, as well as to serve as a permanent forum for dialogue to address issues related to trade facilitation and logistics. Comprised of 18 entities—nine public and nine private—all with close ties to and interest in international trade and logistics, the committee is tasked with promoting the agreement's implementation. Some of the committee's achievements have included streamlining the implementation of the Single Window for Foreign Trade (VUCE); trade risk management, also linked to promoting AEO certification; training programs for all links in the supply chain; and, very importantly, extended operating hours at seaports.
The private sector, for its part, has embraced the Dominican State's initiative emanating from the WTO agreement and, in the particular case of North American companies, represented by the American Chamber of Commerce (AMCHAMDR), has established its own Trade Facilitation Committee, which acts as a cohesive force between American companies (and their trade concerns) and the National Trade Facilitation Committee (CNFC), which is headed by the General Directorate of Customs and of which AMCHAMDR is also a member.
It is interesting to see how international cooperation has also aligned its efforts to promote changes that contribute to trade facilitation. The United States government, through the United States Department of Agriculture, has been implementing the Export Quality Program in the country, implemented by the International Executive Service Corps (IESC). Multiple initiatives have driven significant improvements in infrastructure, trade practices, and capacity building to enable exporting and even importing companies to operate in foreign trade more easily.
The Export Quality Program, funded by the United States Department of Agriculture and implemented by the IESC, established three cold chain working groups in September 2017, focusing on the following areas: product processing, airport infrastructure and management, and regulations and inspection processes. The working groups have triggered a large number of training sessions, process improvement initiatives, infrastructure adjustments, and have even directly linked with the work carried out by the National Competitiveness Council as Secretary of the National Trade Facilitation Committee (CNFC). This program escalated the issue through Presidential Decree No. 346-2019, by which the President of the Republic ordered the definition of regulatory and monitoring mechanisms so that exporting and importing companies, as well as ports and airports, freight forwarders, and transporters, implement actions and practices conducive to preserving the cold chain for perishable products exported and imported. These important advances have contributed to addressing Article 7.9 of the WTO Agreement on Tariffs and Trade (TFTA), which requires signatory members to establish appropriate customs procedures for the international trade of perishable goods, including proper handling, infrastructure conditions, and efficient delivery times.
At the same time, Exporta Calidad has fostered closer ties between Dominican companies and the U.S. authorities involved in the import of perishable goods, such as Customs and Border Protection (CBP), the Animal and Plant Health Inspection Service (APHIS), the Food and Drug Administration (FDA), and ports and airports. This rapprochement has undoubtedly also contributed to easing the bureaucratic burdens of the process, thanks to the resulting understanding of the actors' operations. With this, the more than 1,500 metric tons of perishable goods exported weekly to the United States can present a positive and growing business scenario.
There is still a long way to go. Public-private partnerships definitely contribute substantially to this global project, which encompasses all WTO members. However, states must assume a role that is more than regulatory, but rather as facilitators, and even embrace cooperativism as a driving force in this area. A major challenge for the CNFC is that its member stakeholders (18 public and private entities) remain immersed in the day-to-day operations and find it difficult to dedicate the solemnity that such an important project deserves.
South-South cooperation, which does not necessarily imply the transfer of large-scale economic resources, can be an important instrument, as can North-South cooperation, where the most advanced countries possess not only the knowledge and experience but also the financial resources that are essential for these transformative processes. To achieve this, other public entities such as the Ministry of Public Education and Development (MEPD) and the Ministry of Foreign Affairs (MIREX), in addition to those already involved, must join forces and strengthen their participation in the various scenarios and projects.
Trade facilitation translates into more and better trade, which in turn translates into greater socioeconomic opportunities for countries. Therefore, it must be embraced as a global development project for states, businesses, and people.
By: Emmanuel Guzmán Alberto
International Trade Specialist / University Professor
