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Statement by Ms. Rabab Fatima at the Side Event of Legal Tools for Empowering LLDCs: Enhancing Freedom of Transit and Trade Facilitation
Ambassador Aida Kasymalieva, Permanent Representative of the Kyrgyz Republic, and Vice Chair of the Group of Landlocked Developing Countries,
USG Elinor Hammarskj?ld,
Excellencies,
Distinguished Colleagues,
I thank you for joining this important discussion on advancing freedom of transit and trade facilitation for Landlocked Developing Countries (LLDCs).
This meeting assumes special significance as we prepare for the third UN Conference on LLDCs this August, on an issue which is of critical importance to the LLDCs.
LLDCs continue to face persistent structural challenges due to their lack of direct access to seaports, which significantly increases their trade costs, limits competitiveness, and restricts integration into regional and global value chains.
While international legal frameworks - such as Part 10 of the UN Convention on the Law of the Sea and Article 11 of the WTO Trade Facilitation Agreement - explicitly provide for freedom of transit through the territory of transit States, inconsistent implementation undermines their effectiveness.
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As a result, LLDCs remain constrained by transit bottlenecks that hinder their trade growth.
The new Programme of Action for LLDCs for 2024-2034 reaffirms the global commitment to addressing these challenges. One of the key outcomes is the establishment by the UN Secretary General of a high-level panel on Freedom of Transit, to assess and strengthen the application of existing legal instruments.
This will serve as a platform for LLDCs, transit countries, and development partners to identify solutions that reduce trade costs, which is currently 30% higher for LLDCs compared to coastal nations, and ensure that freedom of transit is a practical reality than a legal aspiration.
[And] An important component of this discussion is UNCITRAL¡¯s ongoing work on Negotiable Cargo Documents (NCDs), which presents an opportunity to enhance trade efficiency, flexibility, and access to finance for LLDCs. By allowing goods in transit to serve as collateral, NCDs can politically unlock liquidity, reduce financial risks, and facilitate trade finance solutions.
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This is particularly relevant given that limited access to financing remains a major constraint for LLDCs, restricting export growth and economic diversification.
As the SG appoints the High-Level Panel on Freedom of Transit to review the existing legal frameworks, it would be essential to explore how NCDs can complement broader trade facilitation efforts.
The new Programme of Action has identified trade and trade facilitation as priority areas, emphasizing the need for efficient and cost-effective transit access to enhance LLDCs¡¯ economic prospects.
To fully leverage the Programme of Action and emerging trade facilitation tools such as NCDs, I would like to highlight four key priorities:
First and foremost, we must strengthen the international legal and regulatory frameworks for transit trade.
There is an urgent need to harmonize transit regimes, promote regional legal coherence, and facilitate greater participation of LLDCs in global trade negotiations.
Accession to multilateral trade conventions will help LLDCs to modernize their domestic legal systems, enhance trade facilitation, and improve access to global markets.
Targeted capacity-building support for WTO accession, trade negotiations, and participation in standard-setting bodies is therefore, essential to ensure that LLCCs can effectively benefit from global trade rules.
Secondly, we must tackle the disproportionately high trade costs due to limited transport infrastructure, delays at border crossings, and regulatory inefficiencies.
Investments in dry ports, multimodal transport corridors, and digital trade platforms are crucial to improving transit efficiency and lowering costs.
However, infrastructure alone is not enough - harmonized legal and institutional frameworks are equally critical to ensuring seamless and cost-effective transit.
Third, interoperable border management systems, seamless customs procedures, and mutual recognition of transport documents can significantly reduce transit costs and delays.
Regional trade agreements should prioritize transit and connectivity, ensuring that LLDCs benefit from greater harmonization of cross-border transport regulations.
Finally, limited access to trade finance remains a major barrier to LLDCs' ability to expand exports and diversify economies.
The ongoing UNCITRAL negotiations on NCDs provide an important opportunity to address these challenges. NCDs could serve as an important tool to improve LLDCs¡¯ access to finance and boost trade efficiency.
Excellencies,
The Third UN Conference on LLDCs in Turkmenistan this August, presents a pivotal moment to assess progress and mobilize concrete commitments for the full implementation of the Programme of Action. Ensuring that legal tools - such as freedom of transit frameworks and NCDs - are embedded in global trade discussions, will be critical in delivering tangible results.
I encourage all stakeholders to actively engage in shaping these discussions, ensuring that LLDCs' legal and regulatory needs remain central to the global trade agenda.
Strengthening legal instruments to enhance transit rights, reduce trade barriers, and promote economic integration would be critical to ensuring LLDCs' full participation in global trade. And my office stands ready to support all efforts to achieve that.
I thank you.