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The World Trade Organization`s (WTO) Trade Facilitation Agreement (TFA) is a landmark agreement that aims to simplify and streamline cross-border trade procedures, thereby reducing the overall time and cost of conducting international trade. The agreement, which was finalized at the WTO Ministerial Conference in Bali, Indonesia in 2013, came into effect in February 2017. Since then, member countries have been working to implement the agreement`s provisions.
What is the Trade Facilitation Agreement?
The TFA aims to improve the transparency, predictability, and efficiency of cross-border trade procedures through a set of provisions that cover the following areas:
- Customs procedures and formalities
- Advance rulings
- Trade facilitation measures for authorized operators
- Release of goods
- Transit procedures
- Border agency cooperation
- Technical assistance and capacity building
The agreement recognizes that simplifying trade procedures benefits all countries, but particularly developing countries, by reducing the time and cost of trade and boosting economic growth.
How are countries implementing the agreement?
To implement the TFA, countries are required to establish a national committee on trade facilitation and develop a national trade facilitation roadmap. The roadmap outlines the country`s commitments to implementing the TFA and the steps it will take to achieve those commitments.
Countries are also required to notify the WTO of their category A, B, and C commitments. Category A commitments are measures that a country will implement immediately upon entry into force of the agreement. Category B commitments are measures that a country will implement after a transitional period, and Category C commitments are measures that a country will implement after receiving technical assistance and capacity building.
As of August 2021, over 80% of WTO members have submitted their category A notifications, and nearly 70% have submitted their category B notifications. Over 100 members have also submitted their category C notifications, indicating their readiness to receive technical assistance and capacity building.
What are the benefits of implementing the agreement?
Implementing the TFA can bring significant benefits to countries, including:
- Increased transparency and predictability of trade procedures
- Reduced time and cost of conducting cross-border trade
- Improved competitiveness of domestic businesses
- Increased revenue collection for governments
- Potential for job creation and economic growth
The TFA is also seen as a key tool for countries to recover from the economic impact of the COVID-19 pandemic by revitalizing trade and investment.
Conclusion
The WTO`s Trade Facilitation Agreement is a critical component of the global trading system, aimed at simplifying and streamlining cross-border trade procedures. As countries continue to implement the agreement`s provisions, they can expect to see significant benefits in terms of reduced time and cost of trade, increased revenue collection, and improved competitiveness. For developing countries, in particular, the TFA presents a significant opportunity for economic growth and job creation.
