Streamline Trade: Overcome Barriers Posed by the "Single Undertaking" for Efficient Trade Flow
The World Trade Organization (WTO) has made a significant stride in facilitating international trade with the adoption of the Trade Facilitation Agreement (TFA) two months ago at the 9th WTO Ministerial Conference in Bali. This agreement, the first since the organization's inception in 1995, aims to simplify customs procedures, reduce red tape, and boost economic growth.
The TFA creates binding commitments to strengthen cooperation on customs matters and assist developing countries in implementing the new rules. The focus is on 'trade facilitation,' a response to the dramatic increase in the amount of goods traded worldwide in recent years and the advances in technology and computerization of business transactions.
The agreement aims to make customs procedures and processing more uniform, user-friendly, and efficient. Key disciplines addressed include publication of laws, regulations, and procedures, internet publication of practical steps for import, export, and transit goods, and the establishment of an inquiry point for trade information. Other provisions include faster and more efficient customs procedures, enhanced right of appeal, notification of detained goods, disciplines on fees and charges, and the promotion of user-friendly and efficient customs procedures.
The TFA also addresses the need for pre-arrival processing of goods, the use of electronic payment, guarantees to allow rapid release, promoting risk management, the creation of authorized operator schemes, procedures for expedited shipments, quick release of perishable goods, reduced documents and formalities, utilization of common customs standards, promotion of the use of single window, uniformity in border procedures and documents, temporary admission of goods, simplified transit procedures, customs cooperation, facilitating developing country implementation, and promoting user-friendly and efficient customs procedures.
The deal is expected to result in an increase of $400 billion in annual output, and U.S. manufacturers, producers of perishable goods, freight forwarders, logistics providers, and express carriers are anticipated to benefit from the agreement. The agreement's goal is to cut the cost of shipping goods around the world by more than 10 percent, particularly among developing countries.
In the real business environment of just-in-time production and delivery, exporters and importers need fast and predictable customs administrative procedures to release their goods, not more gridlock on unrelated issues. The TFA is a step towards addressing this need.
The WTO's success for nearly 60 years has been its consensus-based, all-or-nothing approach. However, negotiators are exploring different approaches to the Doha round, including reaching 'provisional or definitive agreements based on consensus earlier than the full conclusion of the single undertaking.'
The role of the Preparatory Committee on Trade Facilitation is to ensure the entry into force of the TFA, prepare for its efficient operation, conduct its legal review, receive notifications of members' commitments, and officially amend the Marrakesh Agreement establishing the WTO by inserting the new TFA in Annex 1A. The first important step towards implementing the TFA was marked by the unanimous election of Philippine Ambassador Esteban B. Conejos, Jr. as chairperson at the first meeting of the Preparatory Committee on Trade Facilitation on January 31, 2014.
In addition, governments including those of the United States, the European Union, China, and Canada have advocated for a plurilateral agreement to eliminate tariffs and other restrictions on environmental goods. This indicates a growing global commitment to facilitating international trade and promoting economic growth.
In conclusion, the WTO's Trade Facilitation Agreement is a significant step towards reducing costs at the border, improving customs procedures, and boosting economic growth. It is expected to have a particularly positive impact on developing countries and businesses involved in just-in-time production and delivery. The successful implementation of the TFA could pave the way for further trade agreements and economic growth in the coming years.
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