TCB: Fast Facts
Fiscal Year 2016 Overview
During Fiscal Year 2016, the U.S. Government invested more than $1.17 billion in 651 trade capacity building (TCB) activities in 134 developing countries, geographic regions, or trade groups.
The Millennium Challenge Corporation ($653 million), the U.S. Agency for International Development ($333 million), and the Department of Labor ($57 million) were the three largest supporters of TCB-related activities. The Trade and Development Agency and the U.S. Department of Agriculture increased funding from FY2015 by $6.8 million and $4.2 million, respectively.
Total U.S Government investments in TCB activities during FY2016 increased 66 percent from the previous fiscal year, in large part because of the Millennium Challenge Corporation’s new five-year compacts, which include TCB funding of $421.5 million for Ghana and $217.2 million for Liberia. As a result, Sub-Saharan Africa was the largest regional recipient of TCB funding, receiving 70 percent of total USG investment; Western Hemisphere was second at 8 percent.
USG TCB efforts in the agricultural sector help farmers and agribusinesses connect to international markets, as well as assist countries in meeting sanitary and phytosanitary (SPS) commitments. SPS funding includes assistance to help countries comply with the basic rules on food safety and animal and plant health standards to ensure that food is safe to eat.
TCB funding for trade-related agriculture—including SPS measures—totaled $92.8 million in FY2016, an increase of 11.8 percent from FY2015. The rise was driven in large part by a 33.3 percent increase in funding for SPS measures. USAID implemented the majority of trade-related agriculture funding: 86.2 percent of the total. Although it only implements 1.3 percent of overall TCB assistance, USDA was the second-largest implementer of trade-related agriculture assistance, at 6.6 percent.
As with overall TCB funding, the majority (62.4 percent) of trade-related agriculture funding for FY2016 went to Sub-Saharan Africa. South and Central Asia received the second-largest share of trade-related agriculture funding, at 18.7 percent. The USAID-implemented Regional Agriculture Development program in Afghanistan was the recipient of much of this funding, receiving more than $16 million in FY2016 to strengthen value chains and market links to domestic and international markets, thereby enhancing food and economic security to rural Afghans in the northern, southern, and western parts of the country.
U.S. Government Investments in Customs Operations
Funding for regions facing trade facilitation challenges, as shown by the OECD's Trade Facilitation Indicators (TFI).
On February 22, 2017, the World Trade Organization’s Trade Facilitation Agreement (TFA) entered into force. According to the WTO, the aim of the TFA is to increase the efficiency of trading across borders by simplifying, modernizing, and harmonizing trade processes. As part of the TFA, developing countries schedule the implementation of provisions, notifying the WTO if they will need time and/or technical assistance to implement certain articles of the Agreement. Therefore, focused technical assistance provided by the United States and other donor countries will be critical to attaining the maximum potential of the TFA.
In the TCB database, trade facilitation is considered a subset of overall TCB funding. Here, “trade facilitation” is defined as the portion of TCB activities that fall under the categories Customs Operations, Enterprise Development, FTAs (Free Trade Agreements) and Trade Integration, and Trade Promotion.
In FY2016, the U.S. Government dedicated more than $150 million to trade facilitation activities in developing countries. USAID’s trade facilitation activities accounted for $95 million, approximately one-third of USAID’s entire TCB portfolio.
TCB BY REGION AND INCOME GROUP
FY2015 U.S.Government TCB Funding*
Obligations ($US millions) By region and income group
The largest recipient region of TCB funding in FY2016 was Sub-Saharan Africa at $826.5 million, more than three times all the other regions combined. The two largest overall individual recipients worldwide were Ghana ($431.1 million) and Liberia ($217.6 million)—primarily as a result of their new five-year MCC compacts. Even when MCC investments are excluded, however, Sub-Saharan Africa remains the largest recipient region of TCB funding in FY2016. The Western Hemisphere was the second largest recipient region, with $89.9 million obligated across 21 countries and four subregions.
East Asia and Oceania FY2016 funding totaled $38.8 million, which included funding to 17 countries, the Association of South-East Asian Nations (ASEAN) Secretariat, and regional programming. The Philippines ($6.6 million) and Indonesia ($6.3 million) were the largest individual recipient countries in East Asia and Oceania. Europe and Eurasia received the least TCB funding at $35.3 million, of which Ukraine had the highest bilateral aid at $9.1 million.
During FY2016, about 91 percent of all bilateral TCB obligations went to low-income or lower-middle-income countries, as defined by the World Bank. Sixteen percent of FY2016 funding was allocated to regional and cross-regional investments. Regional funding includes USAID assistance through its regional Trade and Investment Hubs and support for African trade blocs, such as the Common Market for Eastern and Southern Africa Secretariat. Excluding MCC funding, trade-related agriculture is the largest category of TCB assistance to low-income countries at $44.7 million. The largest categories of TCB assistance to lower-middle income countries are trade-related labor ($16 million) and enterprise development ($14 million).