Trade facilitation refers to the simplification and harmonisation of international trade procedures to assist the movement of goods. For example, customs, licensing and transit formalities are all areas which can involve complicated administrative processes and burdensome documentation requirements. Businesses can suffer significant losses as the result of complicated or unnecessary, procedures. Customs transaction costs amount up to 15 per cent of the value of globally traded goods (OECD, 2005).
In recognition of the costs such ‘red tape’ imposes on business , negotiations on a trade facilitation agreement were launched as part of the WTO Doha Round in 2004.
The WTO General Council Decision of 31 July 2004 (Annex D – the Framework Package) sets out the modalities for the negotiations on trade facilitation. The negotiations seek to "clarify and improve " relevant aspects of Articles V (goods in transit), VIII (fees and formalities) and X (publication and administration of trade regulations) of the GATT 1994.
A trade facilitation agreement would dramatically improve the efficiency with which goods are traded internationally and would markedly reduce costs for Australian exporters. Commitments in the current text seek to reduce clearance times, encourage greater cooperation between border agencies, and allow for wider access to trade‑related information.
Studies conducted by the OECD, World Bank and EU into the value of a multilateral agreement on trade facilitation point to significant potential gains to world trade (an increase of between USD 33 billion to USD100 billion in global exports per year and USD 67 billion in global GDP) and that up to two thirds of these benefits would accrue to developing countries.
The negotiations have made good progress, with the draft text covering all aspects of the mandate. Australia is actively pressing for conclusion of the negotiations.
See also the department's World Trade Organization homepage