Traders from both developing and developed countries have long pointed to the vast amount of “red tape” that still exists in moving goods across borders, and which poses a particular burden on small and medium-sized enterprises. To address this, WTO Members concluded negotiations on a landmark Trade Facilitation Agreement (TFA) at their 2013 Bali Ministerial Conference and are now in the process of adopting measures needed to bring the Agreement into effect.
The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area. The Agreement will help improve transparency, increase possibilities to participate in global value chains, and reduce the scope for corruption.
The TFA was the first Agreement concluded at the WTO by all of its Members.
Trade facilitation became a topic of discussion at the WTO at the Singapore Ministerial Conference in December 1996, when Members directed the Council for Trade in Goods "to undertake exploratory and analytical work on the simplification of trade procedures in order to assess the scope for WTO rules in this area” (Singapore Ministerial Declaration, paragraph 21).
After several years of exploratory work, WTO Members formally agreed to launch negotiations on trade facilitation in July 2004, on the basis of modalities contained in Annex D of the so-called “July package” (WT/L/579). Under this mandate, Members are directed to clarify and improve Article V (Freedom of Transit), Article VIII (Fees and Formalities connected with Importation and Exportation), and Article X (Publication and Administration of Trade Regulations) of GATT 1994.
Hundreds of proposals made by Members, individually or through groups or alliances, were submitted for consideration by the Negotiating Group. After months of painstaking streamlining and revisions, the proposals became part of the final text of the Trade Facilitation Agreement agreed by Members at the Bali Ministerial Conference in December 2013.
The Agreement entered into force on 22 February 2017 when the WTO obtained the two-thirds acceptance of the Agreement from its 164 Members.
Section I contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It clarifies and improves the relevant articles (V, VIII and X) of the General Agreement on Tariffs and Trade (GATT) 1994. It also sets out provisions for customs cooperation.
Notification of definitive dates for implementation of Category B and Category C
Early warning mechanism: extension of implementation dates for Provisions in Categories B and C
Implementation of Category B and Category C
Shifting between Categories B and C
Grace period for the application of the understanding on Rules and Procedures governing the settlement of disputes
Provision of assistance and support for capacity building
Information on Assistance and Support for capacity building to be submitted to the Committee
Section II contains special and differential treatment (SDT) provisions that allow developing and LDC Members to determine when they will implement individual provisions of the Agreement and to identify provisions that they will only be able to implement upon the receipt of technical assistance and support for capacity building.
To benefit from SDT, a Member must categorize each provision of the Agreement, as defined below, and notify other WTO Members of these categorizations in accordance with specific timelines outlined in the Agreement (see below).
For provisions designated as categories B and C, the Member must provide dates for implementation of the provisions.
Provisions that the Member will implement by the time the Agreement enters into force (or in the case of a least-developed country Member within one year after entry into force)
Provisions that the Member will implement after a transitional period following the entry into force of the Agreement
Provisions that the Member will implement on a date after a transitional period following the entry into force of the Agreement and requiring the acquisition of assistance and support for capacity building.
Section III contains provisions that establish a permanent committee on trade facilitation at the WTO, require members to have a national committee to facilitate domestic coordination and implementation of the provisions of the Agreement. It also sets out a few final provisions.