Bureaucratic delays and “red tape” pose a burden for moving goods across borders for traders. Trade facilitation—the simplification, modernization and harmonization of export and import processes—has therefore emerged as an important issue for the world trading system.
Trade facilitation — Cutting “red tape” at the border
Traders from both developing and developed countries have frequently highlighted the vast amount of “red tape” that exists in moving goods across borders. To address this, WTO members have forged the Trade Facilitation Agreement (TFA), which came into force on 22 February 2017 .
Trade facilitation efforts, such as simplifying required paperwork, modernizing procedures and harmonizing customs requirements, can slash the costs and time needed to export and import goods. This is critical as trade costs can be equivalent to a 134% ad valorem tariff on a product in high-income countries and a 219% tariff equivalent in developing countries according to a 2015 study by WTO economists.
Reductions in time and costs to trade can thus make the difference between a country seamlessly linking up to an integrated global production chain or being left on the margins of a big part of world trade. Moreover, amid a global slowdown in trade, easing trade processes can provide a critical boost to international trade and the global economy.
By easing the time and costs burdens, the TFA is expected to increase exports from existing traders while also enabling new firms to export for the first time.
Technical assistance and capacity building
Technical assistance for trade facilitation is provided by 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). In July 2014, the WTO announced the launch of the Trade Facilitation Agreement Facility, which will assist developing and least-developed countries in implementing the Trade Facilitation Agreement. The Facility became operational with the adoption of the Trade Facilitation Protocol on 27 November 2014.
In West Africa, technical assistance for trade facilitation is provided by CILSS to national and regional APEX organization in trade across border of staple foods.