Trade Facilitation Agreement Explained

In addition, both developing and least developed countries had to provide the WTO with information on contact points for the coordination of these TACBs (Article 22.3). Since 22 February 2019, only five developing countries have met this commitment. This low compliance makes it difficult for development partners to coordinate aid and the willingness of these countries to carry out ambitious trade facilitation projects. The concept of trade facilitation is sometimes extended to a broader economic development and trade agenda, which includes improving transportation infrastructure, eradicating corruption in government, modernizing customs administration, removing other non-tariff barriers, and marketing and promoting exports. The 2014 Trade Facilitation Agreement was confirmed in December 2013 at the Ninth Ministerial Conference in Bali, Indonesia. [1] After nearly 20 years of negotiations, the agreement was officially extended on 27 December 2014 to the membership of the 160-member World Trade Organization (WTO). [1] However, the agreement will not be ratified until two-thirds of the members have informed the WTO of their agreement. For the WTO, the agreement can be seen as a historic achievement, given that it is the first multilateral agreement since the creation of the WTO in 1995. The 2014 Trade Facilitation Agreement is a global multilateral initiative to streamline strict procedures governing international trade. The agreement focuses mainly on many positive effects on developed and least developed countries. The Trade Facilitation Agreement is estimated to reduce trade costs by an average of 14.5%.

In return, it would improve world trade by a trillion dollars. [1] This reduction in bureaucratic bureaucracy will have a positive impact on small and medium-sized enterprises and will facilitate trade and membership in global value chains. One of the most important aspects of this agreement is the new principle that the commitments made by developing and least developed countries in implementing the provisions of the agreement will be conditional on the acquisition of the necessary technical capabilities. [1] The WTO, WTO members and other intergovernmental organizations, including the World Bank, the World Customs Organization and the United Nations Conference on Trade and Development (UNCTAD), provide technical assistance to facilitate trade. In July 2014, the WTO announced the creation of a trade facilitation mechanism that helps developing countries and LDCs implement the Trade Facilitation Agreement. The facility came into force on 27 November 2014 with the adoption of the Trade Facilitation Protocol. Traders in developing and industrialized countries have long stressed the enormous “administrative burden” that still weighs on the cross-border transfer of goods and which is a particular burden for small and medium-sized enterprises.