Improving the Border Agency Cooperation
Among the OIC Member States for Facilitating Trade
14
and shared responsibilities both between different agencies and across the borders, there
would be less need for staff that inspects cargo, vehicles and people at the borders.
Cooperation also often simplifies and clarifies border procedures, and this way it reduces
fraudulent and corrupt practices that are often found in opaque and complex trading
environments.
In the broader picture, cooperation between border agencies and across borders makes cross-
border trading faster, cheaper and more predictable (time- and cost-wise) – a significant trade
facilitation benefit with positive implications to export-driven economic growth. Transparent
and accountable government also helps attract direct foreign investments, a major incentive
for developing countries to engage in BAC.10 Higher throughput of border crossings also
reduces pressure on infrastructure, especially on congested waiting areas at borders.
The extended cooperation across borders benefits particularly the trading community. In the
globalising economy, many companies have adopted just-in-time manufacturing and
synchronised logistics on international scale, as well as global sourcing strategies. Common to
these management strategies is that they call for fast and predictable cross-border logistics
and transport. For this reason, many trading companies are putting pressure on government
agencies, which play a role in facilitating the cross-border trade – to provide fast, predictable
and simple public services at borders.11 Besides the shorter waiting times at borders12,
simplified border formalities save time and money that trading companies must spend to
ensure their compliance with regulatory requirements. This benefits especially small and
medium-sized enterprises (SMEs) that may be discouraged to export due to complicated
regulatory requirements and customs formalities. BAC removes disincentives of these SMEs to
expand their sales internationally, with obvious impact on the economic development
worldwide.
Trade facilitation and border agency cooperation activities hold a huge potential in emerging
and developing economies. According to McLinden, who refers to the World Bank’s Doing
Business data, “it takes three times as many days, nearly twice as many documents, and six
times as many signatures to import goods in poor countries than it does in rich ones.” 13 USAID
reports that there are up to ten border control agencies operating at certain border posts in
East-Africa, each agency conducting their own inspections and levying their own charges on
the cross-border traffic.14 Tan generalises that 40% of delay time in international supply
chains can be attributed to administrative burden caused by paper-based documents and
uncoordinated inspections.15 Numerous further examples exist in trade facilitation literature,
making the “baseline trade facilitation business case” a positive one.
10 Doyle, 2010
11 Accenture, 2006
12 Border Agency Cooperation often expedites border crossings of cargo and people. Reduction of waiting time is a rather
important goal because each extra day to imported or exported goods wait at border decrease trade by around 4.5% (OECD
2011).
13 McLinden, 2012
14 USAID, 2012
15 Tan, 2015