Agreement on Trade Facilitation: A Major Step Forward for the WTO
The World Trade Organization (WTO) reached a major milestone in 2013 when it signed the Agreement on Trade Facilitation (TFA). The TFA aims to simplify and streamline customs procedures to make it easier and quicker for goods to cross borders, boosting trade and economic growth.
Here’s what you need to know about the TFA and its benefits:
What is Trade Facilitation?
Trade facilitation refers to the series of measures and procedures implemented by governments to simplify and streamline the customs clearance process for traded goods. This includes the simplification of paperwork, standardization of procedures, and implementation of modern technology to enhance transparency and efficiency at borders.
What is the TFA?
The TFA is a legally binding agreement signed by 164 member countries of the WTO. It aims to expedite the movement, release, and clearance of goods across borders by providing a set of regulations and procedures that member countries must follow.
The TFA’s provisions cover three main areas:
1. Simplification and standardization of customs procedures: This entails the adoption of common paperwork, electronic documentation, and the electronic exchange of information between customs authorities.
2. Improved transparency and predictability: This includes the publication of customs procedures, the establishment of inquiry points, and the provision of information on applicable tariffs, fees, and charges.
3. Increased cooperation between signatory countries: This includes the creation of a joint committee to facilitate implementation, technical assistance, and capacity building for developing countries.
What are the benefits of the TFA?
The TFA is expected to provide several benefits to member countries:
1. Lower costs and increased competitiveness: The simplification and standardization of customs procedures will reduce the cost of doing business, making it easier for small and medium-sized enterprises (SMEs) to participate in global trade. This will increase competitiveness, resulting in increased economic growth and job creation.
2. Improved transparency: The TFA’s provisions on transparency and predictability will reduce corruption, increase accountability, and improve trust between governments and the private sector.
3. Increased cooperation: The TFA’s provisions for technical assistance and capacity building will provide developing countries with the support they need to implement the agreement effectively, reducing the implementation gap between developed and developing countries.
The TFA is a significant achievement for the WTO and member countries. Its provisions for simplification, standardization, and transparency will provide several benefits, including lower costs, increased competitiveness, and improved cooperation. As a result, the TFA is expected to boost global trade and economic growth, helping to create better conditions for businesses and workers worldwide.