The Benefits of a Trade Facilitation Agreement

A successful trade facilitation agreement would further stimulate trade and increase the ability of the world’s tra ding system to deliver improved prosperity to all participants. For such an agreement to work, it would have to reduce trade bottlenecks, be capable of objective assessment, and deliver measurable benefits to all concerned, particularly to emerging economies.

Trade facilitation is vital to enable the regulatory process to keep up with the growth in trade and with modern trade practices. Trade facilitation does not mean a lowering of control standards or a threat to revenue collection. On the contrary, it enables the maintenance and improvement of regulatory compliance, standards and revenue collection whilst allowing trade to flow more efficiently. In particular, by encouraging greater discrimination in the collection and use of data about trade flows, and by promoting modern control techniques (risk assessment, intelligent profiling, etc), it can enhance the ability of countries to protect themselves against the risks of fraud, criminality and the increasing threat of international terrorism.

• Trade facilitation will enable emerging economies (and small and medium sized enterprises) to benefit disproportionately in a number of ways, including:
• Greater efficiency of the border process making the task of revenue collection and detection of illicit traffic more effective;
• Faster movement of goods increases trade capacity and makes more cost effective use of the infrastructure;
• The elimination of duplication and unnecessary activities that will reduce delays, lowering the overall cost of international trade transactions, giving major benefit to government, business and ultimately the consumer;
• More efficient official controls improving predictability and helping reduce the incidence of theft and spoilage;
• Up-to-date administrative methods help to improve the collection of revenue and the detection of illegal transactions;
• Easier access to developed country markets, and to those of other developing countries (“south-south” trade);
• At a time of ever increasing regulation covering security, clear and robust commitments that improve the process of border management will improve the security of and confidence in the tra ding process; and
• The creation of more open and effective trade that will encourage foreign direct investment and improve economic performance.
• Trade facilitation will improve trade access to land-locked countries (notably through the spread of efficient transit regimes and improvements in the associated business and administrative practices). It will also augment the capacity of emerging economies to manage and increase their share of international trade, not least in trade with other emerging economies.

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