The Trade Facilitation Agreement (TFA) is a multilateral agreement that aims to simplify and streamline customs procedures. The agreement was adopted at the 9th Ministerial Conference of the World Trade Organization (WTO) in Bali, Indonesia in December 2013. The TFA is considered a significant breakthrough in the WTO’s history as it is the first multilateral agreement that was concluded since the organization was established in 1995.
The TFA contains provisions that aim to reduce trade barriers by improving customs procedures, enhancing transparency, and reducing transaction costs. The agreement is expected to benefit developing and least-developed countries the most, as they are the ones that face the greatest trade barriers and have the least capacity to implement trade-facilitating measures.
The TFA’s provisions are divided into three categories: (1) simplification and harmonization of customs procedures, (2) advanced rulings, and (3) trade facilitation measures for effective cooperation between customs and other relevant authorities. Under the first category, the agreement aims to simplify and harmonize customs procedures, such as the release and clearance of goods, the assessment and collection of customs duties, and the handling of goods in transit. This is expected to reduce the time and cost of trade transactions, making them more efficient and cost-effective.
Under the second category, the agreement provides for the issuance of advance rulings by customs authorities, which can give traders certainty and predictability regarding the application of customs procedures. This can help to reduce the risk of non-compliance and can improve the business environment.
Finally, the third category provides for effective cooperation between customs and other relevant authorities, such as trade-related agencies, to improve the overall process of import and export procedures. This is expected to enhance the efficiency of trade transactions and reduce the risk of delays and disputes.
The TFA has been ratified by 135 WTO members as of November 2021, including major trading powers such as the United States, European Union, China, Japan, and India. The implementation of the agreement is expected to have a significant impact on global trade by reducing trade costs and increasing predictability, transparency, and efficiency.
In conclusion, the TFA is a historic agreement that aims to simplify and streamline customs procedures, reduce trade barriers, and enhance the efficiency of trade transactions. The agreement is expected to benefit developing and least-developed countries the most as they have the least capacity to implement trade-facilitating measures. The implementation of the agreement is crucial in promoting global trade and economic growth.