What are the main challenges facing developing countries, particularly African ones, in international trade?  

Africa's share of global trade remains relatively small, accounting for about three percent of global exports and imports.

Even with fairly open market access and reduced tariff rates for exports, African countries face numerous problems and challenges in their economic development.

First, various supply-side and trade infrastructure constraints limit these countries' ability to participate in international trade. African countries suffer from issues related to poor infrastructure quality, such as ports and transportation systems.

The high cost of transportation is a significant obstacle, not only to development but also to investment in foreign trade. The cost of transporting goods by road within the region is higher than in other parts of the world, hindering the regionalization of trade on the continent. 

Additionally, African traders and businesses face other challenges like the overwhelming administrative procedures in Africa.

Bureaucratic requirements are higher in Africa than anywhere else in the world.

A typical customs transaction requires 40 paper documents and 200 pieces of data, with many redundancies, in addition to numerous charges imposed by different agencies.

Moreover, customs clearance times are generally longer in African countries than in other regions.

Are the high trade costs the most significant challenge, especially for landlocked countries, which hinders their participation in global value chains?  

Africa has 16 landlocked countries. These nations face numerous obstacles related to transit, delays at border crossings, and high transportation costs.

On average, the trade of landlocked developing countries is 30 percent lower than that of their coastal neighbours.

Border crossings lead to increased trade costs, and any export or import by sea from a landlocked country must go through at least one additional set of border controls. 

The participation of African countries in global value chains is limited.

According to a 2015 joint OECD-WTO publication, lower trade costs are linked with increased participation in global value chains.

African countries may not be able to access specific export markets or participate in global supply chains if there are long delays in trade shipments and if trade costs remain high.

Another challenge for African trade is the existence of many regional trade agreements, making it difficult for traders to comply with the requirements of these different agreements and benefit from such preferential arrangements.

How can African countries overcome these challenges?  

To overcome these trade barriers, diversify Africa’s exports, integrate the continent into regional and global value chains, and promote investment, African countries must first accelerate the implementation of the African Continental Free Trade Area (AfCFTA). This will better integrate the continent economically, commercially, and socially. 

The WTO’s Trade Facilitation Agreement (TFA) aims to simplify, modernize, and harmonize export and import processes.

Full implementation of the TFA's 36 measures could generate an additional $1 trillion in global trade annually and could potentially reduce trade costs by 14 percent for African countries while increasing African exports by 35 percent.

Studies have also shown that small and medium-sized enterprises (SMEs), the predominant business form in African countries, stand to be one of the biggest beneficiaries of the reforms introduced by the TFA.

Proper implementation of WTO rules and agreements can also offer some flexibility and specific benefits to developing and least-developed countries.

This approach recognizes that these countries have different levels of economic development and institutional capacity from developed countries and, therefore, need specific measures to participate equitably in global trade.

How can digitalization and innovation promote sustainable and inclusive entrepreneurship, especially in developing countries? 

The digital economy now plays a central role in how we do business in the 21st century.

The Covid-19 pandemic accelerated digital and electronic commerce, with significant implications for cross-border trade.

Digital technologies allow entrepreneurs to access global markets through online platforms. This is especially important for small businesses in developing countries, which can sell their products internationally without having to reach those markets physically.

Digitalization and innovation can transform entrepreneurship in developing countries by making resources more accessible and offering opportunities for funding and training.

To maximize these benefits, public policies should support these initiatives by ensuring access to technology and fostering an environment conducive to sustainable and inclusive innovation. 

Within the WTO, the Joint Declaration on Electronic Commerce, backed by 91 member countries, focuses on developing rules, policies, and standards to facilitate and regulate digital trade transactions globally.

The WTO, as an international organization responsible for regulating international trade, strives to create a framework that encourages the growth of e-commerce while addressing associated challenges and opportunities.  

To support developing countries, the WTO emphasizes the need to help them overcome challenges related to infrastructure, digital skills, and regulation in the field of e-commerce. This includes access to technology and the necessary training to take advantage of the opportunities presented by e-commerce.

* This story was published in Al-Ahram Hebdo (in French) on Wednesday 18 September.