TCB: Fast Facts

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Fiscal Year 2015 Overview

U.S. Government Trade Capacity Building Funding

Obligations by Funding Agency, $US millions

Source: USAID, Trade Capacity Building Database

*MCC reports obligations for five-year compacts in the year in which the compact enters into force.

During the 2015 fiscal year, the U.S. Government invested nearly $702 million to 567 trade capacity building (TCB) activities in 134 developing countries, geographic regions, or trade groups.

The U.S. Agency for International Development (USAID) ($336.4 million) and the Millennium Challenge Corporation ($167.5 million) provided the most funds for TCB activities during FY15. The Department of Commerce more than doubled its TCB funding from the previous fiscal year, with most of its investments aimed at strengthening intellectual property rights and environmental standards.

Total U.S. Government investments in TCB activities during FY15 increased 20 percent from the previous fiscal year, in large part because of the Millennium Challenge Corporation's new five-year compact in El Salvador. The compact includes $167.5 million in TCB funding. As a result, Western Hemisphere was the largest regional recipient of TCB funding at 38 percent; Sub-Saharan Africa was second at 22 percent.

Trade-related Labor

U.S. Government Funding for Trade-Related Labor: Top 10 Recipients

FY2015 Obligations, $US millions

Source: USAID, Trade Capacity Building Database

Trade-related labor investments include activities that support improved labor standards, support worker rights, support strengthened trade unions, and address the social aspects of liberalization. USAID, the Department of Labor, Department of State, and the Millennium Challenge Corporation are key contributors to funding and implementing trade-related labor activities.

During the 2015 fiscal year, the U.S. Government invested almost $88 million in trade-related labor activities—about 13 percent of total TCB funding. About 75 percent of this funding went to projects in the Western Hemisphere and activities designed to make a global impact. For example, the Department of Labor invested about $22 million to raise awareness about and prevent child labor and poor working conditions. Additionally, El Salvador received significant funding from MCC's compact and from USAID's Employment Training Project, which provides training and job-placement services.

TCB and Trade Facilitation

U.S. Government Investments in Customs Operations

Funding for regions facing trade facilitation challenges, as shown by the OECD's Trade Facilitation Indicators (TFI).

* Average of developing countries in each region that are eligible for Official Development Assistance (ODA). The TCB Database does not report assistance to developed countries that are not ODA-eligible.

Sources: USAID, Trade Capacity Building Database; OECD, Trade Facilitation Indicators

In December 2013, World Trade Organization (WTO) member countries finalized negotiations on the Trade Facilitation Agreement (TFA), which aims to boost global trade flows by streamlining border procedures, enhancing international cooperation, increasing transparency and domestic communication, and other activities. The Agreement enters into force once two-thirds of members (110 of 164) officially accept its terms, which is anticipated to happen in early 2017.

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.

Many of these countries already receive assistance in these areas. The U.S. Government invests in improving and modernizing customs procedures in developing countries. These activities include customs integration efforts through USAID's Africa Trade Hubs, export control and border security assistance through the Department of State, and customs workshops through the Department of Commerce, among others.

The chart below shows the U.S. Government's investments in customs operations in FY15, plotted against the average score of TCB-eligible countries in each region according to the OECD's Trade Facilitation Indicators, an index designed specifically to measure how close countries are to the best practices outlined in the TFA. In 2015, USG assistance was positively correlated with the need for assistance in border procedures and transparency as outlined in the TFA. For example, Sub-Saharan African countries generally scored worse on the Trade Facilitation Indicators and received more "Customs Operations" assistance than their Western Hemisphere counterparts.

TCB Funding By Region and Income Level

FY2015 U.S.Government TCB Funding*

Obligations ($US millions) By region and income group

Source: USAID, Trade Capacity Building Database

* Excludes globaland cross-regional funding

During the 2015 fiscal year, about 86 percent of all bilateral TCB obligations went to low-income or lower-middle income countries (as defined by the World Bank). More than half of the $702 million in TCB funding went to coun-tries in the Western Hemisphere ($266 million) or in Sub-Saharan Africa ($153 million).

Nearly two-thirds of FY15 funding in the Western Hemisphere was invested by the Millennium Challenge Corporation in TCB components of its new compact in El Salvador, which was classified as a lower-middle income country in 2015.

Thirty-five percent of FY15 funding in sub-Saharan Africa was bilateral TCB assistance to low-income countries, while nearly 42 percent were regional investments. This 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.