Trade Facilitation Agreement
Trade Facilitation Agreement
The World Trade Organization Agreement on Trade Facilitation reduces trade 'red tape'. It entered into force in February 2017, following acceptance by over two-thirds of WTO Members.
About trade facilitation
Trade facilitation helps the movement of goods by simplifying international trade procedures including:
- customs and border regulations
- licensing and transit formalities
- administrative processes
- documentation requirements.
The World Trade Organization (WTO) Agreement on Trade Facilitation (TFA) reduces red tape, reduces costs and makes it easier for businesses to enter overseas markets. Under the TFA, Members must comply with international best practice including:
- publishing information on customs procedures
- advance rulings
- appeal mechanisms
- limiting fees and charges
- establishing procedures for clearing goods.
Australia and the TFA
Australia co-sponsored the TFA in the WTO and played a key role in its successful conclusion after almost 10 years of negotiations. Australia pushed for obligations to provide advance rulings and to prioritise clearance of perishable goods – key benefits for Australian exporters.
Benefits of the TFA
The TFA provides a global boost for jobs and growth. The OECD estimates the agreement could reduce the costs of trading across borders by more than 10 per cent for developed economies, and globally by between 12.5 per cent and 17.5 per cent.
Specific examples of practical measures that will strengthen global trade and economic growth include:
- allowing exporters to submit import documentation before physical goods arrive
- clearing goods before final duties and charges are calculated
- obtaining precise and binding information on the tariff classification of their goods before arrival
- mandating the quick release of perishable goods, which will reduce waiting times for clearance of agricultural exports in foreign ports
- requirements to publish relevant procedures and forms for importing goods online to streamline access to customs procedures and new export markets.
These measures reduce costs for exporters, reduce the time it takes for goods to get to their destination and make imported goods more affordable for consumers.
Implementing the TFA
Australia already complies with TFA terms and has designated a National Committee on Trade Facilitation (NCTF) as required under the agreement.
The NCTF is chaired by the Department of Immigration and Border Protection. It provides a forum for government and business to discuss issues related to the implementation the TFA and opportunities to reform the international trade environment.
Australia assisting developing countries
Australia is working to help developing country partners to implement the agreement.
Two-thirds of the expected benefits of the TFA are expected to flow to developing countries through boosting economic growth and job creation.
To date, Australia has committed $11.5 million to multilateral programs including:
- $8 million over eight years to the World Bank's Trade Facilitation Support Program (TFSP) to help developing countries undertake at-the-border reforms such as improving customs procedures
- $1 million to the WTO Trade Facilitation Agreement Facility (TFAF) to help developing and least developed countries access the necessary assistance to implement the agreement
- $2.5 million to the Global Alliance for Trade Facilitation, a joint initiative between donor country governments and the private sector, to help developing countries undertake trade facilitation reform.