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
Australia and the Fourth Global Review of Aid for Trade
Tim Yeend (Ambassador to the World Trade Organisation) and Pascal Lamy (WTO Director-General) issued a joint statement on trade facilitation assistance at the opening of the Fourth Global Review of Aid for Trade in Geneva on 8 July.
The Review brings together high level representatives from governments, international organisations, the private sector, and civil society to discuss how development assistance can help countries harness trade for economic growth.
The statement was issued on behalf of 27 WTO Members and leading organisations supporting trade facilitation programs around the world. The statement highlighted the importance of trade facilitation reforms to developing country participation in global value chains, and the high levels of assistance available for trade facilitation reforms. A total of more than USD 381 million was committed to trade facilitation programs in 2011 (OECD).
The WTO is currently negotiating a trade facilitation agreement as part of the Doha Round of negotiations. The negotiations have been intensifying in pursuit of an agreement at the Ninth Ministerial Conference in December. The statement underlined the momentum that a WTO Trade Facilitation Agreement would add to global trade facilitation efforts. The benefits of an agreement could be significant, with estimates that 44 per cent of the potential benefits of the Doha Round would come from a trade facilitation agreement, constituting an increase of USD 67 billion in global GDP (Decreux and Fontagné, EC Commissioned Study, 2011).