The Trade Facilitation Agreement of the World Trade Organization (WTO) is a landmark agreement that aims to simplify and harmonize customs procedures and increase transparency in international trade. The agreement was adopted at the WTO Ministerial Conference in Bali, Indonesia, in December 2013 and entered into force on February 22, 2017, after two-thirds of the WTO membership ratified it.
The Trade Facilitation Agreement (TFA) is the first multilateral agreement reached by the WTO since its establishment in 1995, and it is expected to have a significant impact on global trade. The agreement requires members to implement measures that will make it easier and faster to move goods across borders, reduce transaction costs, and increase predictability and stability for businesses engaged in international trade.
The TFA consists of three main elements: (1) simplification and harmonization of customs procedures; (2) enhanced cooperation among customs authorities and other relevant agencies; and (3) technical assistance and capacity building for developing and least developed countries.
Under the agreement, WTO members are required to publish their customs procedures and other trade-related information on a single window platform, which will facilitate the exchange of information among traders and customs authorities. Members are also required to establish a risk management system for customs control, which will enable them to focus their resources on high-risk consignments.
The TFA also contains provisions on the use of electronic documentation and signatures, the establishment of advance rulings, and the simplification of clearance procedures for low-value goods. These measures are expected to significantly reduce the time and costs associated with customs procedures, which can often be a major barrier to trade.
In addition, the TFA requires developed countries to provide technical assistance and capacity building to developing and least developed countries to help them implement the agreement. This includes assistance in developing their customs infrastructure, training of customs officials, and support for the establishment of single window platforms.
Overall, the Trade Facilitation Agreement of the WTO is a significant step towards reducing trade barriers and promoting the growth of global trade. By simplifying and harmonizing customs procedures and increasing transparency, the agreement is expected to benefit both developed and developing countries, particularly small and medium-sized enterprises that often face the greatest challenges in international trade.