Trade Facilitation and the WTO Trade Facilitation Agreement

The World Trade Organization (WTO) Agreement on Trade Facilitation (ATF) entered into force on 22 February 2017, following its acceptance (ratification) by over two-thirds of WTO Members.

Trade facilitation refers to the simplification and harmonisation of international trade procedures to assist the movement of goods. Customs, licensing and transit formalities involve complicated administrative processes and burdensome documentation requirements. The Agreement reduces red tape and the burden of administrative costs associated with exporting and importing. It minimises and streamlines customs processes, and improves transparency about rules affecting international trade, making it easier for businesses to enter overseas markets. The practices of WTO Members will be aligned with Australian and international best practice, including: to publish information on their customs procedures; advance rulings; appeal mechanisms; limiting fees and charges to the cost of services; and establishing procedures for authorities to use in clearing goods.

Australia does not need to introduce new legislation or procedures to implement the Agreement, but has designated a National Committee on Trade Facilitation (NCTF), as required under the Agreement. Government agencies and a broad range of industry organisations are represented on the Committee.

Globally, the agreement will provide a major boost for jobs and growth. The OECD has estimated that full implementation of 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.

Full text of the Agreement on Trade Facilitation

Negotiating history and entry into force

In recognition of the significant potential benefits of reducing red tape barriers to international trade, WTO Members concluded the Agreement on Trade Facilitation at the Ninth Ministerial Conference on 7 December 2013 in Bali.

As the first major agreement concluded since the establishment of the WTO in 1995, the Agreement is a significant milestone. It is designed to deliver practical measures to strengthen global trade and economic growth. In undertaking the Agreement's obligations, WTO Members will remove the regulatory and procedural burdens traders face when conducting international trade, by harmonising and streamlining global customs procedures and making trade regulations more transparent.

At a WTO General Council meeting on 27 November 2014, WTO Members agreed to adopt the Protocol to implement the Agreement on Trade Facilitation. This included formal entry into force after it had been accepted by two thirds of WTO Members.

Australia formally accepted the ATF on 4 June 2015, when Parliamentary Secretary to the Minister for Trade and Investment, Steven Ciobo, delivered the instrument of acceptance on behalf of Trade and Investment Minister, the Hon. Andrew Robb MP, to the WTO Director General, Roberto Azevêdo, during the annual OECD Ministerial Council Meetings (MCM) in Paris.

This followed the tabling of the Agreement in the Australian Parliament on 18 June 2014, and the recommendation from the Australian Parliament’s Joint Standing Committee on Treaties (JSCOT) that binding treaty action take place as stated in its Report of 26 March 2015.

Australia's role

Australian negotiators, led by DFAT representatives at Australia's WTO mission in Geneva, played a pivotal role in securing the successful conclusion of this agreement after almost 10 years of negotiations. Australia played a particularly important role in co-sponsoring and pushing for obligations to provide advance rulings and to prioritise the clearance of perishable goods. Implementation of these obligations by WTO Members will provide significant benefits to Australian exporters.

How will the Agreement on Trade Facilitation benefit Australian businesses?

For Australian businesses, exporting goods will become less difficult, take less time to be cleared by Customs at foreign ports, and should result in lower costs.

For example, provisions allowing exporters to submit import documentation prior to the physical arrival of goods, and for the clearance of goods prior to the final determination of duties and charges, will reduce the time it takes for goods to reach their final destination.

In addition, traders will be able to obtain precise and binding information on the tariff classification their goods will receive before arrival at foreign borders.

The agreement also mandates the quick release of perishable goods, which will reduce waiting times for clearance of agricultural exports in foreign ports.  This will reduce business costs for exporters and make their goods more affordable to overseas consumers.

Exporters will also benefit from new requirements that WTO Members publish relevant procedures and forms for importing goods on the internet, making it easier for all businesses to navigate customs procedures and launch into new export markets.

For an article by article explanation of the benefits traders can expect from the agreement’s implementation, please see Fact sheet: The WTO Agreement on Trade Facilitation.

Development

Two-thirds of the expected benefits of the Agreement are expected to flow to developing countries. The full implementation of the agreement by developing countries will boost economic growth and create millions of jobs. Australia is working to assist developing countries to implement the agreement.

How is Australia assisting developing countries to implement the agreement?

The WTO Agreement on Trade Facilitation is expected to deliver substantial benefits to Australia’s developing country partners, and we are committed to help developing countries implement the agreement through the provision of technical assistance in support of a broader Aid for Trade Strategy.

To date, Australia has committed A$10 million to multilateral programs, assisting developing countries to undertake trade facilitation reform, this includes:

  • A$6 million over three years to the World Bank's Trade Facilitation Support Program (TFSP), to assist developing countries undertake at-the-border reforms, such as improving customs procedures
  • A$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
  • A$3 million to the Global Alliance for Trade Facilitation, a joint initiative between donor country governments and the private sector, to assist developing countries undertake trade facilitation reform.

Australia hosts international dialogue on Trade Facilitation Reform – December 2016

"Trade Facilitation Reform: A Business and Government Partnership", conference was held in Sydney on 13 –14 December 2016, bringing governments and businesses from the Indo-Pacific together to find ways to make trade more efficient.

The conference was hosted by the Department of Foreign Affairs and Trade, in partnership with the Global Alliance for Trade Facilitation, a public-private initiative designed to help developing countries reduce trade costs. The event was also co-sponsored by Brambles, the Export Council of Australia, the Commonwealth Bank, DHL and the Freight & Trade Alliance.

The event provided a forum for businesses and governments to connect and explore new ways to lower trade costs, share best-practices and encourage trade facilitation reform. The conference included expert representatives from Australian and international businesses, developing countries, international organisations and other Australian Government departments.

The event aimed to strengthen participants' knowledge of trade facilitation, and lay the foundations for future partnerships to promote trade and growth. It also provided an opportunity to look beyond the ATF to further areas for trade and regulatory reforms.

Contact: aidfortrade@dfat.gov.au for further information.

Last Updated: 28 February 2017