Written by: Arántzazu Sánchez Belastegui, Article No. 83 [UNCTAD Transport and Trade Facilitation Newsletter N°93 - First Quarter 2022]
© Jan Hoffmann - Kingston container terminal
Creating a sustainable and successful National Trade Facilitation Committee (NTFC) may seem to be a bit of a science. You can carefully mix all the ingredients that will normally contribute to the sustainability of an NTFC and still get a Committee that is rather inactive and fails to perform and produce results.
Thus, what makes a Committee sustainable over time? Are some factors more important than others? To what extent? We will try to answer some of these questions in this article.
Ingredients
The UNCTAD Trade Facilitation Team has over the past couple of years experienced an increasing demand to support National Trade Facilitation Committees. Together, we have accumulated over 150 years of experience in supporting the creation and operation of NTFCs in a diverse range of countries and environments, empowering them to ensure they are in a good position to fulfil their role as coordinators of trade facilitation reforms.
We put all this cumulated knowledge on the table and sprinkled it with the quantitative data we have collected thanks to the 130 NTFCs that have shared their NTFC profiles in our online Database. With this mix, we came up with a list of ingredients for the UNCTAD sustainability recipe for NTFCs.
- A broad scope: To ensure that the work of the National Trade Facilitation Committees remains relevant over the years, the scope of action of the Committee needs to be formulated in broad terms, allowing for adaptation to the requirements that will arise from future trade facilitation reforms.
- A legal foundation: NTFCs with a solid institutionalization and legal foundation entail high-level political commitment, strong participation of members, and the prevention of possible conflicts of interest between the parties involved.
- A formal anchoring: Having specific terms of reference that have been validated and officially adopted by the NTFC will support the operationalization of its activities, thus increasing the chance of the NTFC to be sustainable over time. Having a defined work plan makes the NTFC more efficient and this in turn increases its chances of being sustainable over time.
- Regular & frequent meetings: A NTFC that meets regularly has higher chance of being sustainable in time. A higher frequency of meetings shows than an NTFC is more active and if efficient and well organized has a higher out and impact. A monthly or quarterly frequency has been demonstrated to be convenient for NTFCs.
- Human resources: Having a permanent secretariat increases the chances of an NTFC to be sustainable.
- Financial resources: If an NTFC has an allocated budget to finance its activities, it has greater chances of being sustainable in time. This is particularly important when resources are domestic because resources from donors tend to be limited in time.
- Involvement of the private sector: Genuine involvement of the private sector will ensure that the work of the NTFC addresses the needs of the trading community. If the work of the NTFC translates into benefits for the private sector, the Committee will have more chances of getting the necessary support to ensure its sustainability in the long run.
- Gender balance: Evidence has shown that bodies with a more balanced representation of women, particularly at the senior level, considerably outperform their counterparts with a lower representation of women. Research has likewise shown that teams with gender parity demonstrate greater potential for innovation. NTFCs that perform better have better chances of being sustainable.
- Capacity to communicate: If the NTFC is communicating properly to its stakeholders, it will be easier for the committee to ensure political buy-in as well as the support from the trading community, both essential to the sustainability of its activities.
- Concrete outcomes: If the NTFC produces tangible results, members will be more motivated to continue participating in its work (this is specially the case for the private sector) and high-level support will be granted.
All these factors together will contribute to making the NTFC sustainable.
Method
Now that we have defined our ingredients, how do we mix them?
In 2021, we developed the UNCTAD Sustainability Score of National Trade Facilitation Committees, a recipe to mix all the ingredients described earlier. The recipe we created used the ingredients we had at hand. We took the data we have gathered in the 59-question long survey that countries filled in to have their profiles updated in our NTFC Database. Then, we mixed them in the following proportions:
Thanks to this recipe, now each NTFC in our Database has access to its NTFC Sustainability Score. The Score calculates the sum of all the ‘ingredients’ the NTFC has, and it determines, on a scale from 0 to 100, how far the individual NTFC is in maturing towards the ideal sustainability level. In other words, based on the weight those ingredients have on the Committee’s capacity to be functional, it calculates its prospects of being sustainable.
The secret ingredient
While the recipe for sustainability is applied to all Committees without making distinctions, there are subtle factors contributing to the long-term prospects of NTFCs that might not be necessarily reflected in the UNCTAD Score. As such, it is interesting to compare the UNCTAD Sustainability Score by each country with the perception of sustainability that the leaders of that Committee have. We can understand a lot from a country just by comparing these numbers. Let’s look at them globally and by level of development.
By February 2022, the average NTFCs Sustainability score was 46 out of 100 points. In our survey from where we retrieved the recipe data to calculate the score, we also included the following question regarding the perception of sustainability that chairpersons and members of the Secretariat have of their own NTFC; ‘On a scale from 0 (where 0 represents "Not sustainable at all") to 100 (where 100 represents "sustainable"), to what extent do you think that your NTFC is sustainable in time?’. The average score when answering this question was 69 out of 100 points compared to the calculated average score of 46 points. Thus, we see a discrepancy.
While both figures are not fully comparable, they help us illustrate that there is something ungraspable that makes sustainability prevail in each country, a secret ingredient in the sustainability recipe. In fact, developing and least developed countries have similar calculated Sustainability Scores, 49 and 47 points, respectively. However, the perception of sustainability by the leaders of the NTFCs is drastically lower for least developed countries (57 points) compared to developing countries (75 points). It is in those 18 points of difference that the hindrance of development shows its face.
There is no one fits all
Some countries might score low in UNCTAD Sustainability Score even when they have demonstrated over the years that their structure is sustainable. This is specially the case in developed countries, which might not necessarily need a strong legal back up or official set up to continue moving forward the trade facilitation agendas in their countries.
While the UNCTAD Sustainability Score as a number, is not always the answer to the question “What does this NTFC need to be sustainable?”, the Score can be very helpful to analyse a committee’s strengths and weaknesses, so that committees can focus on the mixing ingredients and can request organizations like UNCTAD for a targeted technical assistance action plan. It also helps to examine the differences between NTFCs according to their levels of development and other differences, contributing to the research debates in this field.
Contact the author:
Arantzazu Sanchez | Economic Affairs Officer, UNCTAD Trade Facilitation Section | Arantzazu.sanchez@unctad.org
