The Foreign Service Journal, January-February 2019

50 JANUARY-FEBRUARY 2019 | THE FOREIGN SERVICE JOURNAL ticipating countries to minimize bureaucratic delays by border control agencies (e.g., Customs, Agriculture, Standards) that con- stitute a costly burden on traders. The simplification, moderniza- tion and harmonization of export and import processes—trade facilitation—will reduce average costs to WTOmembers by 14.3 percent and could create 20 million new jobs, particularly in developing countries. It will have a greater effect on global GDP than the complete elimination of all trade tariffs. Vietnam is the location of one of GATF’s flagship projects. There, working with the government and the private sector, the alliance is implementing a bond system that will yield significant benefits to the business community. Since Vietnam concluded a bilateral trade agreement with the United States in 2001 and joined the WTO in 2007, it has become an increas- ingly important market for U.S. companies. When Vietnam joined the WTO it committed to creating a regulatory environment conducive to the operation of competitive enterprises, including smooth importation and exportation across its borders. The project aims to reduce “hold” rates for imports and exports through the establishment of a customs bond system. Vietnam’s hold rate—the time it takes for duties and taxes to be paid and certificates to be obtained, during which time Customs holds the shipment in its physical possession—has traditionally been among the highest in Asia. By reducing hold rates, Vietnam will be able to reach its goal of becoming a more efficient manu- facturing platform for the region. It can take days or even weeks for Customs officials to release shipments in Vietnam. Their understandable concern is that once goods are released, there is no way to ensure compliance with Vietnam’s laws and regulations. At the same time, import- ers and exporters are unable to predict when they will get their goods out of Customs, making it difficult to plan, let alone deliver, time-sensitive shipments to domestic and international customers. Because it is working to correct this prob- lem, the project enjoys the support of major U.S. firms such as UPS, Ford, Intel, Amazon and Walmart, as well as local Vietnamese entities such as the Vietnam Chamber of Commerce and Industry and the American Chamber of Commerce in Vietnam. The project will also positively benefit U.S. companies that already sell their products in Vietnam, such as General Electric and Caterpillar. USAID’s support of GATF advances the agency’s mission of helping our partners become self-reliant and capable of leading their own develop- ment journeys while also promoting American prosperity by strengthening and expanding markets for U.S. businesses. Reduc- ing the time and cost of trade helps both local businesses seeking greater commercial opportunities through trade and U.S. firms that are pursuing opportunities in developing country markets such as those in Africa, Latin America, Eastern Europe and Asia. Another significant, but underappreciated, benefit of enact- ing trade facilitation reforms is that international businesses are more likely to invest in places where they know that red tape will be minimized, making it easier to move their goods. This can have a positive effect on development and can make U.S. busi- nesses more competitive in the global marketplace. Kimberly Rosen joined USAID as an FSO in 2000 and is currently a deputy assistant administrator in the Bureau for Economic Growth, Education and Environment. Previously, she served as the mission director in Kyrgyzstan, director of the West Africa Affairs Office in USAID’s Africa Bureau, deputy mission director in Liberia, director of the Economic Growth Office in USAID/Afghanistan and deputy office director of the Economic Growth Office in the Central Asia Republics Regional Mission. Paul Fekete is a senior trade adviser in USAID’s Bureau for Economic Growth, Education and En- vironment. He joined USAID in 2010 after working as an international economic consultant for entities such as the World Trade Organization and the World Bank. He has worked throughout the African continent as well as in other developing countries on trade policy, economic development, and WTO accession and compliance issues. He is also an adjunct assistant professor at Syracuse University’s Maxwell School, where he teaches graduate courses on international economics, U.S. trade policy and policy formulation. Alliance Director Philippe Isler speaks at the launch of the GATF project in Morocco. COURTESYOFTHEGLOBALALLIANCEFORTRADEFACILITATION