The Trade Facilitation Agreement (TFA) 2017 is a significant milestone in the world of international trade. The TFA aims to streamline and simplify customs procedures, making it easier and less costly for businesses to import and export goods across borders. In this article, we will delve into the details of the TFA and its potential benefits.
What is the Trade Facilitation Agreement?
The TFA is a multilateral agreement negotiated under the umbrella of the World Trade Organization (WTO). It was ratified and came into force in February 2017. The TFA aims to reduce the time and cost needed to move goods across borders by improving customs procedures and reducing red tape. This agreement is particularly important for developing countries, where trade barriers and inefficient customs procedures can often be major obstacles to economic growth.
What does the TFA cover?
The TFA covers a range of customs-related issues, including the following:
1. Release and clearance of goods: Customs procedures and documentation requirements will be simplified to expedite the release and clearance of goods.
2. Automation: The use of electronic systems for customs procedures will be encouraged, which will speed up the process and reduce the risk of errors.
3. Transit: The TFA includes provisions for the facilitation of transit trade, which can help landlocked countries and others that rely heavily on transit trade.
4. Pre-arrival processing: Customs will be required to process goods before they arrive to speed up the clearance process.
5. Risk management: Customs will use risk management techniques to target high-risk consignments and expedite the clearance of low-risk consignments.
What are the benefits of the TFA?
The TFA is expected to bring a range of benefits to businesses and economies around the world. The following are some potential benefits of the TFA:
1. Lower costs: The agreement is expected to reduce the cost of trade by up to 15% globally, which will benefit both importers and exporters.
2. Increased trade: By making it easier to move goods across borders, the TFA could increase the volume of international trade, benefiting businesses and economies.
3. Improved efficiency: The use of electronic systems and risk management techniques will help to speed up customs procedures and reduce the risk of errors, improving overall efficiency.
4. More transparency: By streamlining customs procedures and reducing the scope for corruption, the TFA could make trade more transparent and improve the business environment.
Conclusion
The TFA is an important agreement that has the potential to benefit businesses and economies around the world. By reducing trade barriers and simplifying customs procedures, the TFA could lower costs, increase trade volumes, and improve efficiency and transparency. While there are challenges to be addressed, such as ensuring that developing countries can fully participate, the TFA represents an important step forward in the global effort to promote free and fair trade.