The World Trade Organization`s (WTO) Trade Facilitation Agreement (TFA) is a critical agreement that aims to streamline international trade procedures and reduce trade barriers across the globe. In this article, we will provide a comprehensive guide to understanding the TFA and its impact on global trade.
What is the WTO Trade Facilitation Agreement?
The Trade Facilitation Agreement is an international agreement that was adopted by the WTO`s member countries at the 9th Ministerial Conference in Bali, Indonesia in December 2013. The TFA entered into force on February 22, 2017, after two-thirds of the WTO`s 164 members ratified the agreement.
The aim of the TFA is to simplify and harmonize customs procedures and improve transparency across borders, which would lead to faster and more efficient trade. The agreement comprises 12 articles that cover various aspects of trade facilitation, including:
– Advance Rulings: Encouraging transparency by providing importers with information about customs procedures in advance.
– Pre-Arrival Processing: Simplifying customs procedures by allowing for the submission of data and documents before the arrival of goods at the border.
– Border Agency Cooperation: Encouraging cooperation among border agencies, which would lead to faster clearance of goods.
– Risk Management: Promoting the use of risk management techniques to facilitate the clearance of low-risk goods.
– Single Window: Establishing a single electronic portal for the submission of trade-related information and documents.
Why is the TFA important?
The TFA is essential for promoting global trade, which is critical for economic growth and development. By making it easier and faster to trade goods across borders, the agreement would help businesses of all sizes, especially small and medium-sized enterprises, to access new markets and increase their exports.
The TFA is also expected to benefit developing countries by lowering their trade costs, which would make it easier for them to participate in global trade. The agreement would help developing countries to reduce the time and cost associated with customs procedures and improve transparency, which would make it easier for them to attract foreign investment.
How does the TFA work?
The TFA requires member countries to implement the provisions of the agreement by creating new trade facilitation measures and improving existing procedures. The agreement also requires member countries to provide technical assistance to other member countries that need help with implementing the TFA.
To ensure that member countries comply with the TFA, the agreement establishes a monitoring mechanism that involves regular reviews of each member`s progress in implementing the agreement. The monitoring mechanism also includes a system for resolving disputes related to the implementation of the TFA.
Conclusion
The WTO Trade Facilitation Agreement is an important international agreement that aims to streamline and simplify customs procedures, reduce trade barriers, and promote global trade. The TFA is expected to benefit businesses of all sizes, especially small and medium-sized enterprises, by making it easier and faster to trade goods across borders. It is also expected to benefit developing countries by reducing their trade costs and improving transparency, making it easier for them to attract foreign investment. By implementing the provisions of the TFA, member countries can help promote global trade and economic growth.