The following communication, dated 17 November 2025, is being circulated at the request of the African, Caribbean and Pacific Countries (ACP) Group, the African Group and the Least Developed Countries (LDC) Group.

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1  Background

1.1.  This document is being submitted by the African, Caribbean and Pacific Countries (ACP) Group, the African Group and the Least Developed Countries (LDC) Group in response to the ongoing discussions on the financial situation of the Trade Facilitation Agreement Facility (TFAF or Facility) Trust Fund, which calls for strategic reflection on the future of this vital multilateral tool.

1.2.  The TFAF currently finds itself in a complex financial situation that necessitates an assessment of its future role. Nevertheless, we would like to emphasize that the Facility is a key part of the architecture of the Trade Facilitation Agreement (TFA), providing unquestionable value added to all Members. It would therefore be premature to consider dismantling it.

1.3.  The purpose of this communication is threefold: first, to express our firm belief in the need to preserve the functions of the TFAF; second, to provide a constructive analysis of the specific challenges and potential risks for developing and least developed countries (LDCs) if its functions were dispersed; and third, to encourage active discussions among Members with a view to establishing a consultative approach aimed at strengthening, simplifying and ensuring the sustainability of the TFAF as an agile and targeted financing instrument.

2  Position statement and legal basis

2.1.  The ACP, African and LDC Groups are submitting this document to express their constructive position and their commitment to maintaining the functional integrity of the TFAF, and to propose alternatives to scenarios in which the Facility's structure would be weakened.

2.2.  The TFA is a unique agreement in that the binding implementation commitment for developing countries and LDCs (Section II) is inseparable from technical assistance and capacity building (TACB) (Section III). The TFAF provides a concrete and innovative illustration of the concept of special and differential treatment (S&D).

2.3.  While the role of the TFAF is not to finance the full implementation of the TFA – a commitment made by donor countries through their traditional assistance mechanisms – the Facility is the multilateral and neutral guarantee of the fulfilment of this commitment.

2.4.  Therefore, calling the Facility into question, without analysing the risks of an equivalent alternative, upsets the balance of the TFA and affects the ability of developing countries and LDCs to fully honour their obligations.

2.5.  The ACP, African and LDC Groups welcome the significant progress made by their members, including the fact that 93% of the measures notified under Category C by developing and LDC Members are scheduled to be implemented in the next five years, i.e. by 2030 (figures from September 2024). However, the continuing existence of a major funding gap remains a source of concern, as many countries still need to secure the necessary assistance partnerships for all these measures. Maintaining the functions of TFAF direct funding is therefore crucial to bridge this gap.

3  Contesting the diagnosis and risk analysis

3.1  Defending the strategic value of the TFAF

3.1.  We recognize the operational challenges that the TFAF may have faced in the past. However, we note that the partners recognize the quality and relevance of the work carried out. We would therefore like to engage in dialogue on the claims that the TFAF no longer has a central role to play in supporting developing and least developed country Members. Its current situation is mainly due to funding difficulties, not the questioning of its management or its strategic relevance.

3.2.  The gravity of this situation is further illustrated by the impact of the fund's budgetary situation for 2026, which has led to an absence of financial allocations, i.e. CHF 0.00, for key activities, most notably the subsidy programme and technical assistance and capacity building initiatives. This de facto suspension of the main support functions, at a time when Category C deadlines are being reached, is an extremely worrying sign.

3.3.  The TFAF is the only technical assistance and capacity building mechanism entirely dedicated to the TFA. It has demonstrated its ability to engage swiftly and easily with Geneva-based missions and capitals in order to discuss implementation challenges and, where appropriate, to propose assistance, including direct funding.

3.4.  This direct funding covers targeted micro-needs and urgent gaps (e.g. short-term training for officials involved in border checks, ad hoc legislative assistance, and the acquisition of specific software). This support is a vital complement to the TACB provided by other means and is crucial for the next five years of implementation.

3.2  Analysis of risks relating to functional integration solutions (dilution)

3.5.  The TFAF Secretariat has raised the possibility of delegating some of its functions to other mechanisms, most notably the Enhanced Integrated Framework (EIF) or the Standards and Trade Development Facility (STDF).

3.6.  We believe that such a proposal requires a thorough and rigorous analysis. It is vital to assess the operational feasibility of this transfer in concrete terms and to anticipate the potential impact on the effectiveness of TFA implementation assistance.

3.7.  The main risk of this approach is that assistance specifically dedicated to the TFA will be diluted. The integration of targeted TFA capacity-building needs into existing assistance structures with broader or very specific mandates, could lead to their absorption.

3.8.  For an entity such as the EIF that focuses on general trade strategies, TFA assistance could be sidelined in favour of broader thematic priorities, not to mention that only LDCs are covered by the EIF.

3.9.  In the case of the STDF, the mandate of which centres exclusively on sanitary and phytosanitary (SPS) measures, the transfer of the entire TFAF mandate (which covers a wide range of non-SPS measures) would prove to be ineffective for a significant share of TFA technical assistance requests.

3.10.  Moreover, the transfer of the Facility's mandate to the above-mentioned structures (EIF or STDF) without the prior guarantee of additional and long-term resources would have a de facto impact on their operational capacities. These bodies would be forced to assume new responsibilities without any increase in resources, which would comprise the effectiveness of their existing mandates as well as that of the new transferred tasks.

3.11.  Lastly, the transfer of responsibilities and the possible addition of new administrative procedures could increase the burden on beneficiary countries. Our capitals could see the effectiveness of assistance diminish, which would be detrimental to the national ownership of TFA projects and therefore to the speed and sustainability of TFA implementation.

4  Challenges and key issues for developing countries and LDCs

4.1.  The dismantlement proposal raises fundamental questions that merit consideration by the Committee on Trade Facilitation before any decision is made:

·_        Consistency in the balance of the Agreement: Were the TFAF to stop providing direct funding, one should consider what the impact on the overall balance of the TFA would be. Would such a reform not constitute, de facto, a calling into question of Section III of the Agreement?

·_        Financial intention and viability (exit strategy): The current situation is caused by inadequate donor funding. Given that the effectiveness of TFAF management is not being called into question, this situation gives rise to an critical policy question: is this about strategic reorganization, or a trend towards the reduction of global multilateral funding for TACB, which could be perceived as running counter to the spirit of the TFA and to the commitment to reach the critical threshold of CHF 2 million per year?

5  Proposal by the ACP, African and LDC Groups for an enhanced TFAF

5.1.  The ACP, African and LDC Groups reaffirm that the fundamental problem is the lack of stable and predictable funding. In order to ensure the sustainability of the Facility and build on its positive management record, we invite Members to reassess the Facility's role and to embark on a path of strengthening that maintains direct funding while optimizing the Facility's operational effectiveness and governance for future challenges.

5.2.  To this end, we propose a reform structured around the following three pillars:

·_      Pillar 1: Optimizing governance and strategic visibility

-_         Simplification of the Management Committee's decision-making process.

-_         Increased representation of developing countries and LDCs in strategic oversight to ensure that funding priorities adequately reflect the needs on the ground.

·_      Pillar 2: Improving operational efficiency and agility

-_         Creation of an expedited approval window for micro-requests (maximum amount of CHF 100,000, maximum approval time of 90 days).

-_         Priority promotion of South-South expertise and the sharing of best practices, in particular through experts from ACP, African and LDC Group member countries that have successfully completed implementation.

·_      Pillar 3: Sustainable and predictable funding strategy

-_         Setting of multi-year funding targets (over three to five years) to ensure a budgetary horizon.

-_         Exploration of more stable sources of financing, including the possibility of a fixed annual contribution or an automatic renewal mechanism to achieve the minimum operational threshold of CHF 2 million.

6  Resolution and call for concerted action

6.1  Call to the Committee on Trade Facilitation for consultations

6.1.  The African, ACP and LDC Groups insist on the need to immediately establish a specific and inclusive consultation platform (composed of the Management Committee, donors and beneficiaries) in order to discuss this reform proposal and ensure a transition to a more efficient and sustainable TFAF.

6.2.  The African, ACP and LDC Groups believe that the solution to the funding challenges experienced by the TFAF lies in the targeted strengthening of the Facility, not in its elimination. Putting an end to direct funding would inevitably lead to deficiencies, undermining the fundamental balance of the TFA. The responsibility for maintaining this balance lies with all Members.

6.2  Need for trust and solidarity

6.3.  We urge all Annex D partners to respond promptly and substantially to the pressing need for TFAF recapitalization. The future viability and the credibility of the TFA depend on Members' collective ability to show solidarity. We urge you to honour your multilateral obligations by ensuring stable, predictable and adequate funding for a reformed TFAF.

6.4.  The time has come to strengthen the TFA, not to weaken it. In addition, we urgently request the Committee on Trade Facilitation to take note of this critical situation and to include in its conclusions a diplomatic but firm call for the rapid and sustainable capitalization of the TFAF.

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