Getting Down to Business: New ITC report guides policymakers on WTO Trade Facilitation Agreement

Policymakers can use this guide to ensure that the voice of business is integrated at each point in this landmark agreement, and maximize its potential for trade.

Much has been written about the World Trade Organization (WTO) Trade Facilitation Agreement to cut red tape at borders and make commerce easier, faster and more transparent. But policymakers in many developing countries need help understanding just what to do – and how – to reduce cumbersome documentation, harmonize cross-border regulations and simplify border procedures.

A new manual by the International Trade Centre (ITC) offers that help. Produced in collaboration with the United Nations Conference on Trade and Development and the United Nations Economic Commission for Europe, the report provides a measure-by-measure analysis that explains the legal obligations of the agreement. This makes it easier for national policymakers to bring in the voice of business in an effective way, and comply with the measures.

Getting Down to Business: Making the Most of the WTO Trade Facilitation Agreement is an ‘essential guide’ that enables policymakers and businesses to navigate the often tricky path of implementation, said ITC Executive Director a.i. Dorothy Tembo.

It goes even further than just encouraging legal compliance with the landmark agreement, however. It gives policymakers the tools they need to draft a practical roadmap to do so, but also to align implementation to their countries’ development objectives.

‘This guide supports the implementation of trade facilitation reforms that serve the purpose of anchoring national development priorities,’ Ms. Tembo said. ‘Accordingly, the guide provides practical step-by-step roadmaps to monitor implementation of each measure. It uses checklists and national action plans that take into account a country’s financial and human resources as well as priorities of the business community.’

The WTO has estimated that full implementation could boost global exports by up to $1 trillion a year and benefit international trade more than removing all remaining tariffs in the world. Small and medium-sized enterprises would accrue the biggest gains. The Trade Facilitation Agreement also has the potential to cut trade costs by an average of 14.3% and to create 20 million jobs in the process – the vast majority in least developed countries.

COVID-19 creates even more urgency

With the dark clouds brought by the COVID-19 global crisis challenging these predictions, policymakers and businesses have an even greater responsibility to double up efforts to improve transparency, reduce bureaucracy at borders and try to offset the negative impact of this dire situation by making international trade easier and more favourable to small businesses.

This is especially true for developing and least developed countries, which face more daunting challenges of liquidity and fiscal capacity.

It is crucial to ensure the highest standards of transparency and efficiency in cross-border trade to avoid disruptions to global value and supply chains. In these times of imposed social distancing, which affects both human behaviour and cross-border commerce, rescuing global trade actors through the wise use of technologies that tackle physical challenges to trade will be particularly beneficial.

The Trade Facilitation Agreement aims to improve the efficiency and effectiveness of the agencies that oversee trade, especially in developing countries, by reducing bureaucratic red tape at borders, simplifying customs procedures and strengthening enforcement capacities through technology and institutional reforms. As of March 2020, 91% of the World Trade Organization’s 164 members had ratified the accord.

For the deal to reach its full potential as a tool to simplify cross-border trade, ‘implementation must begin at home’ Ms. Tembo said. This report ‘can be a lodestar in that journey.’