RESTRICTED  
  
WT/COMTD/SE/M/36  
 
18 September  2018 
(18-5772) Page: 1/10 
Committee on Trade and Development  
Thirty -Sixth Dedicated Session    
 
 
NOTE ON THE MEETING OF 7 JUNE  2018  
H.E. Mr Diego Aulestia  (Ecuador ) 
A. ADOPTION OF THE AGEN DA ................................ ................................ ....................  1 
B. MINISTERIAL DECISION  ON THE WORK PROGRAM ME ON SMALL ECONOMIE S 
(WT/MIN(17)/63 –WT/L/ 1030) – CHALLENGES A ND OPPORTUNITIES EXP ERIENCED BY 
SMALL ECONOMIES IN T HEIR EFFORTS TO REDU CE TRADE COSTS, PART ICULARLY IN THE 
AREA OF TRADE FACILI TATION (WT/COMTD/SE/ W/34)  ................................ .................  1 
TOPIC: MOST IMPORTAN T SOURCES OF MERCHAN DISE AND SERVICES TR ADE COSTS 
REPORTED BY SMALL EC ONOMIES  ................................ ................................ ...................  1 
(I)  PRESENTATION BY WTO SECRETARIAT  ................................ ................................ .........  1 
(II) PRESENTATIONS BY REPRESENTATIVES FROM THE GROUP OF SMALL, VULNERABLE 
ECONOMIES (SVES)  ................................ ................................ ................................ ............  3 
A) PRESENTATION BY THE REPRESENTATIVE OF PANAMA  ................................ ...................  3 
B) PRESENTATIONS BY REPRESENTATIVES OF SRI  LANKA  ................................ ..................  4 
C. OTHER BUSINESS  ................................ ................................ ................................ .. 10 
 
A. ADOPTION  OF THE AGENDA  
1. The draft agenda as contained in WTO/AIR/COMTD/SE/8  was adopted . Nothing was added 
under other business.  
B. MINISTERIAL DECIS ION ON THE WORK PROG RAMME ON SMALL ECONO MIES 
(WT/MIN(17)/63 –WT/L/ 1030) – CHALLENGES A ND OPPORTUNITIES EXP ERIENCED BY 
SMALL ECONOMIES IN THEIR E FFORTS TO REDUCE T RADE COSTS, PARTICUL ARLY IN THE 
AREA OF TRADE FACILI TATION (WT/COMTD/SE/ W/34)  
TOPIC: MOST IMPORTAN T SOURCES OF MERCHAN DISE AND SERVICES TR ADE COSTS 
REPORTED BY SMALL EC ONOMIES  
2. The Chairman  recalled that the Secretariat  had introduced a background note on this topic in 
a meeting of the Dedicated Session in May 2017 , following a mandate from Ministers at MC10 in 
Nairobi. At  that meeting, Members had expressed preliminary reactions to the document. However, 
the Dedicated S ession had agreed to hold two meetings to discuss it in 2017. The present meeting 
would focus on the specific challenges derived from trade costs that SVEs face d and the most 
important sources of merchandise and services trade costs reported by them.  
(I)  PRESENTATION BY WTO SECRETARIAT  
3. A representative of the WTO Secretariat  made a presentatio n on the global trends of trade  
costs and SVEs. She explained that total trade costs had been going down since 1995, particularly 
in the case of South -South trade. Sh e said that transportation and logistics costs had a greater role 
in goods trade than in services trade while trade policy barriers, including tariff and non -tariff 
measures (NTM), and therefore regulations, were more important for services trade. Transact ion 
costs and border costs had a similar share for trade in goods and services. These were costs related WT/COMTD/SE/M/36  
 
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  to obtaining information, for instance, on where to source from in the case of imports and how 
distribution systems work and which channels to use in t he case of exports. The main determinants 
of transportation and logistics costs were distance, type of products, the quality of infrastructure 
such as ports and roads.  Regulations  were also an important factor. Another  element that affected 
costs was the timeliness of deliveries, particularly for participation in global value chains (GVC). 
Delays were extremely costly because they could disrupt supply chains and create additiona l costs. 
Border costs, red tape, i.e. the amount of documentation, the information required, the coordination 
between agencies and the time required for crossing the border were all important elements that 
built up costs. Any progress in these areas such as facilitating the flow of information, re ducing the 
amount of documentation or using online documentation could help to reduce trade costs. The 
representative added that transaction costs, mainly distribution costs, which as had been said were 
related to information, were major contributors to tr ade costs. On tariffs and NTMs, she said that 
not only the level of tariffs should be taken into account, but also the uncertainty of trading 
conditions was costly. She stressed that this was evident by looking at new export orders which had 
dropped in the  first quarter of 2018, even before tariffs had been raised. Just the fear of change 
seemed to have affected export orders negatively.  
4. The representative went on to discuss the challenges for SVEs. She spoke of three major 
challenges: remoteness, which was  a high burden for remote economies; dependency on few 
products, often agricultural, that were sensitive to NTMs , while in services there were higher barriers 
in regulatory frameworks that would also have an impact on SVEs; and size, which meant fixed cost s 
were a problem for exports. A clear example of this were information costs: the costs of knowing 
the legislation in the destination country, consumer tastes, the distribution channels for products 
were important costs for small economies. Also, there was  a large share of small firms in small 
economies which faced obstacles such as poor access to information, costly product standards and 
certification procedures, burdensome customs procedures, poor access to finance and in services , 
obstacles in modes 1 an d 4. 
5. Talking about the opportunities for SVEs, the representative explained that participation in 
GVCs could help because bigger firms could solve the problem of acquiring information about the 
characteristics of destination markets, therefore facilitating  access to foreign distribution networks. 
This could allow SVEs to exploit economies of scale. Yet, SVEs also faced difficulties to take 
advantage of these opportunities, some of them internal, like lack of skills and technology, and some 
external, like hi gh logistics and infrastructure costs, high tariff barriers and uncertainty. Other 
potential opportunities for SVEs were those arising from digital technologies. Online trade could 
partially reduce information costs. Also, while Small - and Medium -sized Ent erprises (SMEs) 
continued to have a reduced presence online due to connectivity gaps, the vast majority of those 
who did have access to e -technology used it to export. SVEs could also benefit from blockchains, 
which were a trusted ledger of information tha t allowed to trace back the origin and characteristics 
of goods and could compensate for low contract enforcement. Thus, blockchains contributed to 
building trust among buyers. Looking more into the future, the representative said, the obstacles 
created by  remoteness could be reduced in part by 3D printing. Nevertheless, there were also 
difficulties for SVEs to exploit these opportunities. The main obstacle for online sales was the cost 
of IT infrastructure, but there were also issues that had to do with re gulations and the governance 
of information flows.  
6. Next, the representative listed some policy approaches that SVEs could take in the context of 
the WTO . WTO agreements helped SVEs to reduce variable and fixed costs by keeping tariffs low 
and predictable t hrough bindings. There was all Duty -Free and Quota -Free (DF QF) Market A ccess 
and preferential rules of origin, which clearl y provided them with advantages  and disciplines on SPS 
and Technical Barriers to Trade ( TBT) that encouraged the use of international  standards, thus 
reducing the fixed costs of entry to markets. Also, work in committees in the WTO increased 
transparency. She added that the Trade Facilitation Agreement ( TFA) would reduce costs for crossing 
borders. Some provisions in the Anti-Dumping ( AD), Subsidies and Countervailing Measures ( SCM), 
and Government Procurement ( GPA) agreements speci fic to SMEs could help SVEs.  The 
representative also mentioned the work programme on e -commerce that could be a useful venue to 
discuss digital issues in the future. She said that more could be done to improve access to finance 
in order to close the gap between small and large firms, and SVEs could use the WTO's capacity 
building mechanisms, such as Aid for Trade, the Enhanced Integrated Frame work (EIF ) and the  
Standards and Trade Development Facility (STDF).  At the regional level,  SVEs could proceed further 
in the use of regional certification centre s, fostering harmonization or equivalence of standards and WT/COMTD/SE/M/36  
 
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  promoting air services and postal agreements. In concl usion, the representative said that progress 
in any of these areas would help SVE participation in global trade.  
7. The Chairman  thanked the WTO representative and wondered about a graph that had been  
presented with the share of eB ay enabled SME s. He asked fo r clarification on  whether a comparison 
was being made between exporting businesses and non -exporting businesses.  
8. The representative  of the Secretariat  explained that what was being compared was the share 
of SMEs exporting online using e Bay versus traditio nal businesses.  SMEs that had access to i nternet 
were more likely to export  than an average small firm.  
9. The representative of Guatemala  recalled a meeting that had been held at UNCTAD on the 
issue of access of small firms from developing countries to globa l platforms. Her delegation had said 
that there were small producers and small businesses that wanted to sell their products in global 
platforms like e -bay or Amazon, but these platforms did not allow direct sellers from developing 
countries.  Reports of sa les from developing countries were from firms that were based in countries 
where they were allowed to sell. She explained that a firm from Guatemala that wanted to sell on 
e-bay would have to constitute a company in the United States, for example, and woul d have to sell 
through that company. So, the opportunities from global marketplaces were diminished. Constituting 
another firm was an additional trade cost.  
10. The Dedicated Session took note  of the interventions.  
(II) PRESENTATIONS BY REPRESENTATIVES FROM TH E GROUP OF SMALL, VULNERABLE 
ECONOMIES (SVES)  
A) PRESENTATION BY THE REPRESENTATIVE OF PANAMA  
11. A representative from  Panama  said that her country was a service -based economy. The 
logistics conglomerate was one of the pillars of the econo my and comprised transportation, 
communications , commerce and manufacturing. Panama's geographical location allowed it to offer  
many connectivity services and infrastructure.  They had one of the m ost connected airports in Latin  
America, two of the most act ive ports in the region and seven submarine fiber optic cables. 
Regarding Panama's trade facilitation performance, the representative  presented Organization for 
Economic Cooperation and Development ( OECD ) indicators, according to which , Panama was better 
positioned than many Latin American countries but was still very far from the top regarding best 
practices. Some of the main issues they had to improve included the private involvement in the 
trade community, advanced rulings in the cases of certificates of  re-exportation and origin which 
were very complicated in Panama, fees and charges that were not well defined and the automation 
of some processes. On the subject of  logistics, Panam a was  rated number one in Latin America in 
the World Bank's Logistics Per formance Index in 2016, but was  only 40th worldwide. The main issues 
here were  in the tracking and tracing part of that indicator and in customs.  Regarding customs, the 
representative explained that there were no standard processes and there was a lack of t echnology. 
Trade interactions also posed challenges to Panama. Many institutions participated in import and 
export activities. In the importation process of  one product, 17 government agencies  were involved. 
Also, communications with the private sector wer e paper -based , and this was time -consuming and 
caused  delays. Panama had been focusing on these challenges to improve traceability of cargo and 
documents . To address this, they were moving toward the use of more technology solutions in order 
to have more r eliable statistics which would help them make policy changes and improve controls in 
ports and airports.  
12. The representative went on to explain that th e expansion of the Panama Canal had  been a 
game changer not only for the maritime industry but also for the country's business model.  Panama 
was not a big exporter or importer. Their business model was based on trans -shipments. With the 
expansion of the Canal they sought to maintain their m arket share in trans -shipment but also to add 
value to the cargo that passed through the Canal.  To this end, they had devised a national logistics 
strategy, with four main pillars. The first one was the interoceanic hub, which was centered in the 
Canal and  included ports, airports and railroads. The second was the national logistic integration, 
which sought to integrate the whole country into the strategy. The third pillar was trade facilitation, 
in which the focus had been the modernization of processes in cluding technology and the WT/COMTD/SE/M/36  
 
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  development of human resources. The last pillar was consensus and governance , which sought to 
include the private sector in order to improve decision making processes.  
B) PRESENTATION S BY REPRESENTATIVE S OF SRI  LANKA  
13. A representa tive from  Sri Lanka  said that the geographical location of his country meant that 
their main trading activities had to do with transit, trans -shipment and tourism. Its income sources 
were direct and indirect taxes, exports of tea, coconut and apparel, fore ign employment transfers 
and tourism . In 2017,  Sri Lanka was ranked in the 111th position overall in the 
World  Bank's  Group  Doing  Business  Index, and 73rd in trading across borders.  In 2018 , it had fallen 
to 86th position due to several reasons.  Release ti me was a factor tha t could affect trade costs. 
Sri Lanka had been making efforts to improve in this area, but in spite of  having automated several 
processes, the release time had increased due to poor infrastructure facilities. In 2014, the country 
had only one container gate  that had not changed. Also , containers had to pass through heavy traffic 
areas to reach the examinat ion yards . On top of that, the volume of containers had increased  by 
almost 17  million  between 2014 and 2017.  The representative said that key challenges ha d an 
influence on trade costs b ecause in Sri Lanka , the pol itical situation was not steady and  there  had 
been poor policy decisions. He added that bureaucracy also had an impact on trade costs , especially 
stringent procedures and financial regulations. Currently, 57% of their revenue came from import 
taxes, and Sri  Lanka used GATT Article VII which posed  problems because of under -invoicing, due 
to deficiencies in the country's post -clearance audit system. In line with the implementation of the 
TFA, several processes had been  initiated to strengthen the post -clearance audit system. The 
representative expla ined that Sri Lanka also faced challenges due to the concentration of their 
exports on a few products.  He added that even though progress had been made in the automation 
of certain processes, like online SPS certificates, there were no refrigerated areas i n ports or airports. 
SMEs in the country, which were the majority of enterprises in Sri Lanka, had to absorb high 
transportation costs to reach their main markets.  On TFA, the representative said that  it had 
provided greater opportunities to improve the gr ound level situation with support of donors. 
Currently they were receiving help from World Bank and the ITC to improve their post clearance 
audit systems, and they were planning to have a comprehensive time release study. Remedial 
actions were also being p rocessed in line with the implementation of the TFA. However, they did not 
have a very good cargo selectivity system because they had no automated risk management 
systems. Regarding border control, prior to the implementation of the TFA, customs and other 
government agencies and the private sector were working under their individual scopes. Now all had 
come to a common platform and were working close together.  
14. A second representative from Sri Lanka  said that competitiveness in trade was the cause of 
customs  fraud. He explained that the only way to be more competitive was to reduce costs. So , 
trade costs were a factor that had to be addressed beyond punishments. M odernization initiatives in 
Sri Lanka customs had begun  more than a decade ago in gradual phases  starting with organization 
restructuring, by creating several c lusters for the various aspects  and introducing new directorates. 
Legal reforms were also undertaken, such as the implementati on of the WTO Customs Valuation 
Agreement (CVA), which had a direc t impact on trade costs. A Tax Appeals Commission was 
established because there was no appeals process for customs formalities and forfeitures. And one 
of the most important  legal reforms was the integration of intellectual property rights into the 
Customs  Act. A further step in this modernization was introducing automation. Sri Lanka started 
using the Automated System for Customs Data ( ASYCUDA ) software provided by UNCTAD  in 2012. 
It moved then to receiving cargo manifests digitally in real time. Another d rastic improvement was 
the digital customs declaration, whereby all brokers submitted customs declarations online, and once 
it was submitted, the assessment of taxes took place in real time. Last year, Sri Lanka customs 
introduced online payment, which was  one of the main requests from traders. The representative 
added that his country was now in the process of im plementing paperless processing of documents , 
such as digitally signed customs declarations, commercial invoices, bills of lading and delivery 
orders. Before this automation, for a cargo manifest 16 paper copies were required; now, only a 
single digital submission and one paper copy were needed. In the case of customs declarations, 
brokers had to print them and take it to the customs document proces sing center, where an officer 
keyed in the data into the system. This caused delays, errors and hidden costs. Now all customs 
declarations were made online.  The representative added that before automation, importers and 
exporters had to obtain a pay order or manager's cheque at a bank and then deposit payment into 
the custom's bank account. This again caused costs and delays. Now, real -time online payments 
could be made. Another improv ement was paperless processing. The process had started last year 
and by November it was ready. Testing with selected brokers and traders and training for WT/COMTD/SE/M/36  
 
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  stakeholders was already completed. They were now in the process of drafting the necessary 
regulations to allow the acceptance of digitally signed e -documents, and they were hoping to roll 
out the system with selected brokers and  traders at first in two months'  time. Full implementation 
would be accomplished in three phases within 8 to 12 months. The representative went on to explain 
that some of the  causes of additional costs  were delays in transporting shipments , delays in 
examination of cargo and  lack of inter -agency coordination . Regarding the first one, he said that the 
problems faced in the transportation of containers from Colombo port to the inspection yards were 
beyond  the control of Sri Lanka customs and had to be solved by the Transport Authority and the 
Ports Authority in conjunction with the relevant ministries. The delays in the examination of cargo 
were due to a lack of modern cargo examination centers. The lack o f inter -agency coordination 
remained because of bureaucratic problems.  Other challenges were multiple submission of 
applications and multiple payments. The key projects now included the implementation of a national 
single window . The World Bank was in the process  of developing the blueprint which  would probably 
be ready by the end of the month. Nevertheless, implementation would be a major challenge in the 
next five years for Sri Lanka. Another project was the establishment of a central cargo examination 
center, and for this a location next to the port access road had already been identified. I t would have 
to be developed in order to introduce smart customs.  Finally , the implementation of a container 
tracking system and an automated gate, as well as road dev elopment would be necessary.  
15. The representative of El Salvador  observed that when the speaker from the Secretariat was 
talking about the main sources of trade costs in services, there was a large part attributed to "other 
costs" and she wished to know more  about this.  
16. The representative of the Secretariat  said that the way in which costs were broken down was 
an indirect way of calculating these costs by comparing how much trade went on internationally and 
how much was exchanged domestically  and assigning di fferent variables that explained why 
international trade was less than domestic trade . The "other costs" were elements that could not be 
explained with the variables available. There were a series of variables that captured the different 
components. For in stance, in the case of border costs  the OECD's Trade Facilitation I ndex was used 
and for logistics, there was the Logistics Indica tor of the World Bank. However, the use of these 
indicators left  a gap between international and domestic trade that could not  be explained. 
Nevertheless, work was underway to reduce this gap by trying to include uncertainty of trade policies 
or timely deliveries.  
17. The representative of El Salvador  thanked the Secretariat for the answer and said that services 
were important for her country. She proceeded to share El Salvador's national experience.  In recent 
years, her country had started several economic reforms as part of a strategy for integration  into 
international trade through an increased participation in multilateral, regional and bilateral trade 
negotiation processes.  These efforts are being complemented with the implementation of policies 
and strategies aimed at facilitating trade, through w hich we seek to reduce the costs of commercial 
transactions, in order to achieve greater competitiveness for our products and services in markets. 
In this framework, at the meeting of Heads of State of the Central American Integration System 
(SICA), the Pr esidents placed special emphasis on implementing reforms that would promote the 
reduction of international trade costs for the countries of the region. They gave instructions to work 
on the elaboration of a trade facilitation strategy, based on th e Coordin ated Border Management 
(GCF) model, which was approved in 2015 and which countries are currently making great efforts 
to implement.  In the elaboration of this strategy, some trade costs were identified and prioritized, 
among them the need to improve the pr ocedures at the border posts, as well as the physical and 
technological infrastructure s, in order to implement more efficient , agile and efficient processes,  
coordinated by the different institutions that intervene d in these posts . Specific measures were being 
promoted by the region, which were complemented by others that were being applied  unilaterally.  
The measures implemented to date had allowed El Salvador  to have the lowest import and export 
border compliance costs in the Central American region at US$128, in comparison with the  average 
for the region of US$ 306 for exports and US$396 for imports , according to the 
World  Bank's  Doing Business 2018.  However, there were still challenges in terms of border 
enforcement, understood as the regulations regardi ng mandatory inspections for shipments to cross 
the borders, as well as the time and cost of handling goods at the border. This variable represented 
up to 72% of the cost of export transactions and 67% of imports.  This could  be explained by the 
challenges encountered in border control activities, due, among others, to factors such as the need 
to make adjustments in border infrastructure, that were proportional to the growth of the economy 
and the increase in foreign trade transactions, as well as the need t o automate on -site control 
processes . This was reflected, for example, in the World Bank's Logistics Performance Index 2016, WT/COMTD/SE/M/36  
 
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  since in the quality of infrastructure related to trade and transport, her country had obtained a score 
of 2.249 from a maximum sco re of 5 . The representative  added that w ith a vie w to improving these 
indicators  on 31  May of this year , the Special Law on penalties for customs offences , which allowed  
for a simplified penalties  process and an increase  from 3% to 5%  in the margin of tolerance between 
the difference in the declared weight and the verified weight at the border, was reformed.  This added 
to the efforts being made to automate procedures.  In this regard , along with the areas of governance 
and advance resol utions , the OECD Trade Facilitation I ndicators 2015 place d El Salvador among the 
top evaluat ed countries in Central America. At the end of her intervention, t he representative 
reaffirmed El  Salvador's commitment to continue working on improving conditions for the reduction 
of time and costs in international trade transactions.  
18. The representative of the United States  said that  although the Secretariat's report had been 
written for Small Economies, its conclusions  were applicable to most developing Members. T he 
Secretariat had rightly noted that the cost of cross -border trade could make the difference between 
being able to fully exploit foreign markets or being priced out of international trade. Trade costs 
helped explain why some countries grew and diversifie d and the speed at which they did so, in 
addition to attracting greater  foreign direct i nvestments  (FDI). She said that her country had always 
been supportive of cutting red tape and advocated the benefits of trade and customs facilitation. 
They believed that one of the most important actions Members could take to show political will and 
demonstrate they were open to business was rat ifying and implementing the WTO TFA. 
The United  States took note of the positive success stories highlighted in the Secretari at's report . As 
Members had been discussing in the Trade Facilitation Committee, technical assistance for 
implementation was available to developing Members and they encouraged Members to comply with 
and use their notification obligations under the TFA to start conver sations with donors. 
The United  States had stated previously  that they viewed these notifications as part of directing their 
resources accordingly. They relied on notifications in order to identify and prioritize funding needs. 
The representati ve said that the United States encouraged again Members who had not yet ratified 
or implemented the TFA's provisions to do so. The TFA, as the World Bank had noted, was but a first 
step towards improved trade facilitation and lower costs. She requested the  presentations given 
today to be made available to Members so they could be shared with capitals.  
19. The Chair  said that the presentations would be circulated by the Secretariat.  
20. The representative of Guatemala  said that  one of the main costs for her country was 
transportation. According to the World Bank statistics, the cost of transport in Latin America and the 
Caribbean was between two and four times higher than in OECD countries. In some cases, given the 
insufficient  road infrastructure, transport costs could reach  up to 30% of the final price of ex ports, 
while for small producer, the cost exceeded  50% of the final p rice of their products. This had  a great 
impact on competitiveness . One of the reasons for the high transportation costs is the poor quality 
of the roads. Although Guatemala has made efforts to improve this infrastructure, the country is 
constantly affected by natural phenomena such as earthquakes, volcanic activity, landslides and 
floods that hinder  long-term maintenance of  roads . The represen tative added that the transport of 
goods to the rest of the Central American countries was also affected  by costs generated by 
insecurity. The region suffered from problems related to drug trafficking and crime, which forced 
exporters to hire private secur ity companies, patrol car assistance and satellite systems, which 
significantly increased transport costs.  In this sense, she would like t o ask the representative of 
Sri Lanka about the new satellite systems that he mentioned.  She explained that there were  also 
logistical barriers especially at border crossings. Several of the presenters had talked about the times 
in which a merchandise can be moved when going through customs and they were currently working 
on the implementation of the TFA to reduce these t imes and speed up procedures. Currently, efforts 
were being made at the regional level. Guatemala  had agreed with Honduras on a series of trade 
facilitation measures between the customs of both countries, with which it was expected that trade 
costs would b e reduced by up to 25%. Likewise, it was expected that both nations could have 
increases in their GDP of between 0.6% and 2.5%.  Regarding NTM s, the representative said that 
Guatemala also saw the issue as a relevant source of costs for Guatemalan products,  particularly 
agricultural products that were affected by SPS . Producers, particularly small producers, were unable 
to adapt to the constant changes in these measures that were normally notified in the WTO, and 
many times the costs of changing the form of production to adapt to new regulations made it 
impossible for them to export.  In the services area, the main sources of costs  are the lack of 
infrastructure  and the low level of skills needed to support the services sector. Currently, Guatemala 
was seeing heavy investment in technology services and call centers, and there had been an increase 
in job offers, but unfortunately there were not enough qualified wo rkers to cover these positions. WT/COMTD/SE/M/36  
 
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  She would like to ask the representative of Panama, who spoke in her presentation about how to 
improve the capacities of people who worked in these services and would like to know more about 
the initiatives that Panama had t aken on this issue.  
21. In answering Guatemala's question, the representative of Sri Lanka  said that  as far as the 
improvements proposed for the transport system, his country had a three -fold approach. The first 
thing needed was roads. The construction of road s was under the purview of the 
Road Development  Authority. Since 2009, after t he civil war in Sri Lanka, the G overnment took 
many initiatives to develop and fast-track the construction of expressways. Now it had connected 
the southern and central parts of the country, but the major challenge was that the container traffic 
from Columbo Port still had to go through the ordinary public transport n etwork to enter the 
expressway and reach the examination centers , which  were located within a radius of three km fr om 
Colombo Port . The first initiative was to construct an elevated expressway connecting the Columbo 
Port. But constructing it would not solve the problem unless selectivity was improved through the 
introduction of an automated risk management system. This  would help to minimize the number of 
containers selected for examination. There was a proposal for the Asian Develo pment Bank to finance 
all this. In order to improve the selection of containers for examination, his country had to use 
technology. Having a  GPS tracking system for the containers moving from Colombo Port to the 
examination centers with geofencing would be one of the initiatives to speed up their movement. 
This could be supplemented by introducing an automated gate. All these processes were be ing done 
manually, but once the three projects were implemented, they expected to see more efficiency and 
reduction of transport costs.  
22. The representative of Panama  also took the floor to answer Guatemala's question. She said 
that they had several initiatives for capacity building.  For the implementation of technology and 
single windows and the elimination of paper documents, they had created working groups with the  
public sector with the help of the Inter -American Bank. In order to build new capacities for young 
people, the national government had invested in a national specialized i nstitute, where technical 
careers for new students would be offered.  Students would graduate with an advanced technical 
degree that did not exist in Panama and would help to accommodate the new technologies that were 
entering key sectors such as logis tics, finance and tourism. The G overnment had also worked with 
public and private univers ities so that the programs were strengthened to advance Panama's goals. 
There was also a scholarship program with Georgia Institute of Technology (Georgia Tech)  in Atlanta 
that was a dual program with a public university in Panama.  
23. The representative of Sri Lanka explained that ultra -modern  scanners were being used in 
Sri Lanka harbo ur, in order to avoid delays  to expedite cargo and to minimize human intervention 
to establish a transparent environment.  
24. The representative of Paraguay  asked the representative of Panama how they identified  the 
digitization of procedures as a challenge . The representative of Panama said that it was included in 
the national logistics strategy and in that sense,  he wanted to ask what were the challenges to  
implement this plan, how was it designed , whether work had  already begun and what are the 
potential problems that they would have with human resource s. 
25. The representative of Panama  answered that the National Logistics Strategy with a 2030 vision 
was desig ned in consensus with the public and private sectors. For over  eight months they had  sat 
down to define the strategic goals of the logistics sector in Panama. This was divided into four 
strategic pillars that in turn have strategic objectives to strengthen each of the areas. This resulted 
in 121 initiatives, 60% of which had private secto r participation. They had  been working with the 
private sector on the plan and all the other changes that had been made. The difficulties that they 
had been facing were when they were  trying to implement technology.  The representative said that 
her country  had implemented a maritime window where information was received through the 
Panama Canal systems 72 hours before ships arrived, and one of the biggest challenges had been 
the management of change in the public sector. They were very u sed to working with paper and 
receiving  cash. To face these challenges, intense change management programs had been 
established to explain the rationale for the changes and, as in the case of the maritime single window 
that had contributed to reduce around 400,000 paper docum ents per year, Panama had also moved 
to eliminate all documents in d ifferent processes such as trans-shipment , imports and exports. 
Regarding human resources, it was a challenge. Panama was a small country but initiatives had 
been taken, such as the higher  technical part that did not exist in Panama, and a specialized higher 
institute had been established where specialized technical careers were offered in the most important WT/COMTD/SE/M/36  
 
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  sectors: logistics, tourism, finance and construction. There were also master's deg rees in 
cooperation with universities in the United States in the fields of supply chains,  data analytics and 
technology.  
26. The representative of Honduras  asked the representative of Sri Lanka to provide further details 
on the main obstacles he saw for the i mplementation of the single window. He also asked the 
representative of Panama to illustrate how the adoption of the strategy that her country had recently 
adopted would allow it to overcome the challenges they face and what was the relationship with the 
TFA at the time of the design or application of the strategy.  
27. The representative of Sri Lanka  said that implementing the single window  was one of the 
major projects for any nation. Looking at the Sri Lankan approach, the major challenge was money. 
Although they were establishing the single window to reduce costs, it was itself a huge cost to the 
government, because software and hardware were very costly. That was why they were expecting 
assistance from donors.  Nevertheless, the commitment of stakeholders was also necessary. The 
major stakeholders in any single window environment were customs and other border regulatory 
agencies. To bring these agencies together was one of the major challenges. As the representative 
of Panama said, change management was  difficult. Officials were used to certain procedures and 
processes, and once process reengineering was started, especially when having to w ork in a digital 
environment without paper, these practices were difficult to change. The other main challenge was 
bureaucracy. Whenever an effort was made to integrate  other border agencies , there was the feeling 
that Customs was trying to step into their  territories, so they feared that they would lose their 
authority and therefore there was some resistance.  Another factor was the driving force. In countries 
where there had been success in the implementation of a single window there had been a champion, 
an agency that drove the project. Without a champion and a legally enabled agency that could 
muster the cooperation of the rest of the agencies to drive the project, establishing a single window 
could  be difficult.  
28. The representative of Panama  said that for  her country  one of the challenges was change in 
the public sector. She said that in her country the public sector was very fragment ed, unlike  in other 
countries where a Ministry of Public Works or Transport s and Logistics would oversee  everything 
related  to maritime, air and road transport. This had been  a major challenge because there were 
more than 21 institutions that had to sit down to work with a common vision to make Panama a 
world -class hub.  
29. The representative of the Former Yugoslav Republic of Macedonia (FYROM)  shared his 
country's experience in trade facilitation. He said that trade facilitation measures had to be taken 
continuously . That meant, first of all , that thought should be given to  the capacity of the public 
administration, because withou t this capacity these reforms could not be undertaken. Trade 
facilitation implementation entities should have functional and sustainable mechanisms to retain 
knowledge, enrich institutional memory and self-developing  and self-controlling  mechanisms.  He 
explained that his country had conducted functional analyses to identify whether there were written 
procedures and what was their scope regarding business processes. Since 2010, his country's 
Customs Administration had electronic systems to manage busi ness processes and documents which 
included, inter alia , the processing and archiving of documents, electronic signatures  and the 
identification of business processes and standard types of documents and contact points.  They also 
considered strategic planni ng, human resources management, ICT support and transparency to be 
of great importance.  The representative added that 70% to 80% of  trade facilitation took place 
within customs . He then gave a detailed explanation of several of the roles of customs authori ties in 
his country, including giving permits and licenses, facilitating customs clearance, carrying out 
customs control activities , such as risk management and cooperation with neighboring countries  
and, particularly, e -customs. He said that the FYROM had  a single window in operation since 2008. 
Fifteen public institutions participated in it  and a centrally managed common data set of 80 
harmonized and standardized data had been created. Traders could find all the information about 
obtaining import, export and transit licenses, and could submit requests electronically.  
30. The representative of Dominica  said that many of the challenges his country faced regarding 
trade costs were reflected in the Secretariat's report. He highlighted that one of the difficulties for 
their exports trade was the unavailability of export financing mechanisms. This increased the 
financing costs which exporters usually had to bear, including risks related to upfront inventories  to 
fulfill orders and for micro, small and medium size ent erprises this could reduce the cashflow for 
operations, especially when interest rates or credit conditions could be high. There were also WT/COMTD/SE/M/36  
 
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  problems linked to the lack of cold storage facilities at the border, particularly when exporting 
agricultural produc ts. Access to information in relation to duties, SPS measures, Non-Tariff Barriers 
(NTBs) and other logistical  issues was also a challenge. Transport costs were also high because of 
the small volumes shipped, port and airport fees, inventory and warehousing costs, freight insurance 
and increasingly costs associated with tropical storms and hurricanes. The Organiza tion of Eastern 
Caribbean States ( OECS ) and the wider region were working on the establishment of regional export 
and trade financing facilities and mechanisms. The Eastern Caribbean Central Bank was developing 
a credit guarantee scheme for the OECS but ad ditional frameworks would be needed to provide a 
broader range of export financing services needed by the region's exporters.  Support would also be 
needed to increase transparency and predictability of port costs and operations, to increase access 
to infor mation for trade, to increase the resilience of trade related infrastructure and for capacity 
building.  The OECS was engaged in broader regional integration and the initiative to create an 
economic union and the free circulation project were part of that. Finally, he said that the 
implementation of the TFA was ongoin g with the ratification by all m ember States.  
31. The representative of Japan  commented that  his country ha d launched its single window 
in 2003 and had also experienced difficulties in the transitio n to a paperless system , so he was aware 
of the problems SVEs were facing. Regarding the need for aid that had been highlighted, he urged 
entities in charge of trade facilitation to prioritize their agendas and push them when asking for 
bilateral aid to fo reign embassies in their countries.  
32. The representative of Mauritius  said that  while trade costs alone did not explain the 
development pathways of small economies, they were a major factor in clarifying why some 
countries were unable to grow or diversify , or did so slowly. He said that NTMs,  more specifically 
those related to TBT and SPS compliance  significantly influenced the cost of trade . Small economies 
were more specialized in products that were significantly exposed to NTMs, especially SPS measures. 
Work by the World Bank, ITC and other international organizations indicate d that sometimes SPS 
measures were implemented in a way that was more trade disruptive than necessary.  Export 
requirements also pose d significant challenges to small economy exporter s.  As indicated in some of 
the ITC surveys of private sector exporters in small economies, it was essential to establish and 
upgrade national testing facilities and laboratories , so that domestic products could meet 
international standards,  especially tho se of key partners and markets.  One concrete example where 
Mauritius had been at a disadvantage was with respect to the exportation of honey , due to the 
absence of a relevant framework or regulations in place, including a surveillance and a monitoring 
plan for the testing of chemical residues.  Small economies therefore require d flexibility to overcome 
problems relating to lack of appropriate testing laboratories.  The representative  also point ed out  
that, for SVEs, support measures and other  incentives had a developmental dimension.  Specific 
support and incentives were needed by SVEs to attract investment and  promote transfer of 
technology,  offset the effects of distance and rem oteness and help restructuring  in light of global 
economic challenges. Small  economies also face d both challenges and opportunities when trying to 
integrate into GVCs. Small economies were mainly involved in the production of a few products 
namely ag ricultural products, seafood,  textile s and apparel. Tourism accounted  for almost h alf of 
small economies’ services exports. The export of both goods and services were now pa rt of complex 
GVCs. However, integration in to GVCs also entailed  a number of challenges for small economies 
such as  small size, remoteness to main markets, difficult ies related to accessing finance, inadequate 
transport infrastructure, compliance with health and safety standards, upgrading labour skills, 
ensuring sound legal institutions and improving the nation al business environment, among  others. 
Targeted assistanc e to improve their supply side capacities, transfer of technology and building their 
manufacturing capacities were needed to help SVEs to take advantage of the opportunities which 
value chains offer ed. 
33. The representative of Guatemala  made a statement on behalf of the SVE Group. She thanked 
the Secretariat for its presentation and for the insightful comments and data shared with the 
Committee, and said that the SVE G roup believed the work of this Dedicated S ession could continue 
to ben efit from the current work of the Economic Research Division of the WTO. She also thanked 
the SVE panellists and all the SVEs and non -SVEs that had participated from the floor sharing their 
national experiences. As a Group, they see much value on these dis cussions and looked forward to  
the follow up on  these discus sions at the second session on  the topic of Reducing Trade Costs, 
following the Group’s proposal approved by the Committee contained in document 
WT/COMTD/SE/W/33/Rev.1. The Group would work togeth er with the Secretariat on the 
organization of the next meeting, in consultations with interested Members. She announced that WT/COMTD/SE/M/36  
 
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  once the sessions were completed, the SVEs Group would prepare an outcome document o f the 
discussions in order to  further review  at the Dedicated Session.  
34. The Dedicated Session took note  of all the interventions.  
35. The Chair said that this had been a very helpful and instructive session which would  contribute 
to the progress of the Work Programme. He recalled that  the Dedicated Session  had agreed to hold 
two meetings to discuss this topic. In this first session, Members  had focused on the specific 
challenges faced by SVEs. Later this year a second meeting would be held  where best practices and 
policy approaches for addressing the challe nges identified in this session  would be discussed . There 
would be  speakers from SVEs that would share their experiences and the Secretariat  would  also 
endeavour to find speakers from other International Organizations to help enrich the dialogue.  
C. OTHER BUSINESS  
36. The Chairman  said that no issues  had been raised under this agenda  item. However, he again  
asked if any delegation wanted to raise an issue at that point. There were no requests for the floor.  
37. The meeting was adjourned . 
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