How can trade facilitation and digitalization enhance competitiveness and inclusiveness?

3 How can trade facilitation improve TOT and development?

Trade facilitation is the simplification, harmonization, and modernization of trade procedures and regulations which can reduce the time, cost, and uncertainty of cross-border trade. This process can enhance the efficiency and transparency of customs and other agencies, as well as increase the export competitiveness and diversification of developing countries in sectors with high value-added and quality. Furthermore, trade facilitation can lower import costs and barriers for developing countries, particularly for intermediate and capital goods, which are essential for production and innovation. Additionally, it can foster regional integration and cooperation among developing countries in areas such as infrastructure, standards, and trade agreements. Finally, it creates more opportunities and benefits for small and medium enterprises (SMEs), women, and informal traders who are often faced with higher trade costs and constraints.

4 How can digitalization enhance TOT and development?

Digitalization is the use of digital technologies and data to transform business processes, products, and services. It can offer numerous benefits to TOT and development, such as enabling more efficient and secure trade transactions and logistics through online platforms, electronic documents, and digital payments. Additionally, digitalization can expand the market access and reach of developing countries in e-commerce, digital services, and digital content. It also has the potential to support innovation and productivity in sectors with high digital potential, such as agriculture, manufacturing, and services. Moreover, it can empower the participation and voice of developing countries in areas such as digital governance, digital skills, and digital inclusion.

5 What are the benefits of enhancing competitiveness and inclusiveness?

Enhancing competitiveness and inclusiveness through trade facilitation and digitalization can bring multiple benefits for developing countries, such as improving the income and welfare of producers and consumers, particularly the poor and vulnerable groups. It can also boost economic growth and structural transformation, particularly in sectors with high value-added and quality. Moreover, it can strengthen the resilience and sustainability of developing countries when facing shocks and challenges such as the COVID-19 pandemic, climate change, or geopolitical tensions. Finally, it can advance social and environmental goals in areas such as health, education, gender, and environment.

6 What are the challenges of enhancing competitiveness and inclusiveness?

Enhancing competitiveness and inclusiveness through trade facilitation and digitalization also poses some challenges for developing countries. These include addressing gaps and asymmetries in trade rules and negotiations, managing the risks and costs of trade liberalization and digitalization, building capacities and capabilities, and coordinating policies and strategies. Specifically, this entails considering market access, subsidies, intellectual property rights, dispute settlement, adjustment, distribution, regulation, security, infrastructure, institutions, human capital, innovation, coherence, complementarity, and cooperation.