In this episode of the World Bank Group's Trade Tips podcast, we find out what Caribbean rum cake can tell us about trade. We learn about the World Trade Organization's Trade Facilitation Agreement and why National Trade Facilitation Committees – made up of both the private and public sectors – are essential for cutting red tape and making trade work better.
We hear from a trader in Jamaica about the challenges and opportunities, and from the World Bank Group's Bill Gain, on possible solutions.
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Featured Voices
- Jeffrey Hall, CEO, Jamaica Producers Group: “The idea of Kentucky Bourbon cake made in Jamaica is what global trade is all about. It’s putting all of these ingredients together and serving them to the world. We need trade facilitation for this to take place.” Jeffrey Hall, CEO, Jamaica Producers Group #TradeTipsPodcast
- Bill Gain, Head of Trade Facilitation and Border Management, World Bank Group: “The WTO Trade Facilitation Agreement will help improve transparency and predictability, and increase opportunities for developing countries.” Bill Gain, Head of Trade Facilitation and Border Management @World Bank #TradeTipsPodcast
Transcript
[00:05] Sarah Treanor: Hello and welcome to Trade Tips from the World Bank Group. I'm Sarah Treanor. This is the podcast where we tackle the big issues in the world of trade and explore the solutions. In this episode, cutting red tape and making trade work better. What is the Trade Facilitation Agreement? Why does it matter? And how are National Trade Facilitation Committees making a difference? If this all sounds very technical, fear not, we will be digesting it all with a helping of cake.
Jeffrey Hall: The idea of Kentucky bourbon cake being made in Jamaica is precisely what global trade is all about. It's putting all these ingredients together and serving them to the world, and we need trade facilitation for this to take place.
Bill Gain: The agreement will help improve and enhance transparency, predictability, increase possibilities and opportunities.
Sarah Treanor: Yes, we'll be taking you on a trip to the Caribbean and getting the view from Jamaica. We'll also be hearing from the World Bank. All that and more coming up on the podcast.
Montage: Trade tips, trade tips, trade tips.
[01:29] Sarah Treanor: The sound of a bustling port in Kingston, Jamaica,
Bureaucratic delays and red tape are age old problems when moving goods across borders. If you think about cargo being loaded and offloaded at ports like this one in the Caribbean, and everything you buy which has been transported from another part of the world, everything is subject to rules, regulations, and administration. So harmonizing, import and export processes. So it's not a patchwork quilt of contrasting rules is key to efficient trade and good for economies. And this is what the Trade Facilitation Agreement or the TFA as we'll be calling it aims to do. It came into effect in 2017 after World Trade Organization (WTO) members had spent a long time agreeing to the terms and conditions. It tackles things like speeding up the movement of goods across borders, and the clearance of them too. It outlines how customs and other authorities can cooperate. It's important, and we'll be talking in more detail about it in a little bit.
We're also going to be looking at something called a National Trade Facilitation Task Force or Committee. And we're talking about that in Jamaica because Jamaica had been lagging behind other countries in the region when it comes to cross-border trade, thanks to a complex and inefficient set of procedures. But Jamaica has modernized and coordinated things. It's set up a National Trade Facilitation Task Force or Committee. That's important because it means bringing together public and private sector representatives to make things work better, crucially, work better for everyone. Okay, that's enough for me on that. For now, let's get the view from someone very well equipped to give us the inside track on Jamaica and trade.
[03:30] Jeffrey Hall: My name is Jeffrey Hall. I am speaking to you from Kingston, Jamaica actually at the Port of Kingston. And I am the Chief Executive Officer of Jamaica Producers Group and chairman of Kingston Wharf. Kingston Wharf is what's called a multipurpose port, and it does everything from containers to motor vehicles, large car ships, it has grain, you name it. And when you're at the port, it's just a metaphor for what it takes to get a country moving. So Jamaica Producers Group has a number of businesses and has always been in international commerce. We started life as a banana growers cooperative in Jamaica, exporting bananas to Europe. And we always say that if you look at a banana on the shelf in the UK, for example, about half of the cost of the banana is the food. And about half of the value of the banana is shipping and logistics. And so since inception, we've been in both of those businesses. The level of farming, we still grow bananas here in Jamaica for the Jamaican market and for export around the Caribbean. Our largest business by revenues is in the fresh juice business in the Netherlands. We have a bakery business here in Jamaica that exports to over 20 countries. And then we have a logistics business. So we do shipping, freight forwarding operations, and as I mentioned before, Kingston Wharf - a port, warehousing, customs clearance, et cetera. So we're in the thick of the business of trade.
[05:13] Sarah Treanor: And Jeffrey is about to give us all a lesson in trade tips via cake.
Music: It was a rum cake, Hey rum cake.
Sarah Treanor: As this song said, it was the rum cake. Take it away, Jeffrey
Music: Rum cake.
[05:34] Jeffrey Hall: So Tortuga Rum Cake, as we call it, but it's moved beyond just rum cake, started life in the Caribbean. And it's essentially cake infused with rum, which of course is a Caribbean favorite. We started selling it in the Caribbean, and tourists would buy the rum cake at cruise ports and airports. And of course, the first order of business from a trade perspective was to move the rum cake around the Caribbean. So we now have a bakery in Jamaica. And then we realized, of course, that they, the person who was consuming this rum cake in the Caribbean who wanted to take it back with them. And so that was good. And then they wanted to buy it in their retail establishments in the US, North America, broadly Europe, etc. And so now we've had to trade and we've had to make sure that we well understand all the rules applicable to that specialized product, which includes alcohol.
And then we realized something fascinating, which is that people wanted not just a rum cake when they came to the Caribbean, but a spirit cake that connected them to wherever they would visit. And so we found ourselves being asked for and making Tennessee whisky cake, Kentucky bourbon cake, we found ourselves having to import stuff in order to export. So we have to import bourbon, for example, or whisky. And so it's a very complex trade operation and requires facilitation. Frankly, I don't think we could do it if there wasn't a mindset around trade facilitation. We're very optimistic about the growth of that business. It taps into what makes people feel good. You're putting sugar, butter, <laugh> flour, making a cake, and then adding rum to it or adding bourbon to it. And so we're really pleased to be able to do this business and serve it to the world. Cause I think it's important for your listeners to know that the idea of Kentucky bourbon cake being made in Jamaica is precisely what global trade is all about. It's putting all these ingredients together, wherever they come from and serving them to the world. And we need trade facilitation for this to take place.
[08:04] Sarah Treanor: Jeffrey is exactly the person we need to give an explanation of why trade facilitation matters. I asked him what kinds of issues make his life harder.
Jeffrey Hall: So, it's a long list. It's a long list that we hope is getting shorter. What we want to see happen is the bureaucratic elements of trade be minimized. So we know that it takes 10 days to cross the Atlantic from the UK, let's say, to move cargo in whichever direction. And what we want to do is make sure that when the cargo lands in either place, it gets through the system quickly and predictively and efficiently from a cost perspective. When it doesn't, it's a problem. In the old days, it was almost like a treasure hunt of stamps and documents that needed to be procured. You were getting customs to stamp a document, agents to stamp a document and various ministries that had specific approvals to stamp a document and the port to stamp a document. And for us, we have a strong view that with effort, all of these things can happen in a single place and in an ideal world electronically, and can allow for quick and easy payments of predictable amounts and significant variations from that theme cost time, and they cost money.
[09:37] Sarah Treanor: A treasure hunt of stamps and documents. What's Jeffrey's take on the TFA?
Jeffrey Hall: As a private actor, the idea of governments coming together to say that the business of facilitating trade presents an opportunity. As a project, that's a hugely important perspective and very valuable. And to accept the agreement documents the appetite of countries, and the willingness to commit resources to this project. It's a good thing. It's a powerful thing. I think a lot of emphasis has been placed on tariffs. That's important. But there is a win in removing bureaucratic impediments to trade within the context of non-tariff barriers generally. And to accept the agreement addresses that and that's important. There's value to the harmonization of procedures, and there's value to transparency as between countries as to what our goals are in this regard. The Caribbean is a very trade-dependent region. These are small countries each with their own port and their own customs agency. Jamaica, within the Caribbean, is considered a big country with 2 million people. But we have countries that range down into the tens of thousands. And so if they have to replicate bureaucracy everywhere with their own systems and technology that's expensive. And they say we can harmonize it and simplify it, that's an important opportunity for the Caribbean.
[11:18] Sarah Treanor: What about the public and private sectors coming together and the National Trade Facilitation Task Force or Committee in Jamaica? What's your view on that?
Jeffrey Hall: So Jamaica has a Minister of Foreign Affairs who's also the Minister of Foreign Trade. And that minister at the beginning of her term convened a group of members from the government sectors that have some responsibility or engagement in trade, but also private enterprise and private associations that have involvement in trade. I attended some of the sessions, and the idea was to give a strong mandate to the government from this group or give an expression of objectives from this group. And I would say that it was well received at the cabinet level of the country and included elements of a roadmap for reform. Jamaica has good access to its elected officials and to its government agents. And I think what's important is a clear statement of what our objectives are that is inclusive and participatory. And my experience with the Trade Facilitation Task force is that it did that.
[12:37] Sarah Treanor: Well from Tortuga Rum Cake in the Caribbean to a coffee in London.
Bill Gain: My name is Bill Gain. I lead the trade facilitation, customs reform, and border management work in the World Bank Group based in Washington, DC.
[12:50] Sarah Treanor: So you really are the man to answer this question. What is the WTO TFA?
Bill Gain: Well, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods and transit, and also sets out measures for effective cooperation between customs and other appropriate authorities or border agencies. So not just between one or two, but across the whole spectrum of border agencies involved in the clearance of trade and the compliance issues around customs and border agencies. It further contains a range of provisions for technical assistance and capacity building in this area. The agreement will help improve and enhance transparency, predictability, increase possibilities and opportunities for countries, particularly least developed countries to participate in the global value chain, and reduce scope for informal payments and corruption.
[13:48] Sarah Treanor: So how does this cut red tape? How does it make things easier at the border?
Bill Gain: Take the technical measures under the TFA that relate to processes and procedures. They range from harmonizing and simplifying pre-order processes like advance information, advance declarations, and pre-arrival information. So this is for information to be available to the border agencies in advance so they can take appropriate action, they can assess the risk and - where relevant and where appropriate - clear goods before they arrive into the country of import. Additional measures under the TFA include transparency, so availability of information, which is particularly important for the private sector. And one way of achieving that is through the implementation of a trade portal where all trade-related information is available to the private sector. And through that, you can add a number of connections to other systems. So feeding into the national single windows to the automation of the customs declaration processing system. All of this should be implemented under the leadership of the National Trade Facilitation Committee, which is a mandatory provision under the Trade Facilitation Agreement. It is essential that the National Trade Facilitation Committee is actually made up of both the public sector private sector participants, although often led by a ministry - maybe customs or the Ministry of Trade. It's important that the private sector participate firstly to identify constraints and more importantly, to validate solutions that are being implemented mostly by governments.
[15:39] Sarah Treanor: Jeffrey, Bill, many thanks. It's clear that these are hugely important topics when it comes to trade. We hope you enjoyed this episode of Trade Tips from the World Bank Group. I'm Sarah Treanor. Do check out some more of our episodes. We cover topics such as inclusion of women in trade, digitization, and the role of technology, and the relationship between trade and climate change. See you again soon.
Presenter and Producer: Sarah Treanor
Executive Producer: Marisa Zawacki
Cover art photography: Jamaica Producers Group
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This podcast was created by the World Bank Group with funding from the Trade Facilitation Support Program (TFSP). The TFSP is funded by nine donor partners: Australia, Canada, the European Commission, the Netherlands, Norway, Sweden, Switzerland, the United States, and the United Kingdom. This initiative provides assistance to countries seeking to align their trade practices with the World Trade Organization Trade Facilitation Agreement (WTO TFA).
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