Agreement on Trade Facilitation
The General Agreement on Tariffs and Trade (GATT) 1994 contained provisions on "Freedom of Transit" (Article V), "Fees and Formalities connected with Importation and Exportation" (Article VIII) and "Publication and Administration of Trade Regulations" (Article X). These were the first multilateral disciplines on cutting "red tapes" in international trade in goods.
The WTO's engagement in trade facilitation began at the Singapore Ministerial Conference in December 1996, when WTO Members agreed to undertake exploratory and analytical work on the simplification of trade procedures in order to assess the scope for WTO rules in this area.
After several years of exploratory work, WTO Members formally agreed to launch negotiations on trade facilitation in July 2004. Members agreed that the negotiations "shall aim to clarify and improve relevant aspects of Articles V, VIII and X of the GATT 1994 with a view to further expediting the movement, release and clearance of goods, including goods in transit". The Negotiating Group on Trade Facilitation discussed and refined hundreds of proposals made by WTO Members. At the Ninth WTO Ministerial Conference held in December 2013 in Bali, Indonesia, WTO Members adopted the TFA.
The TFA entered into force once two thirds of all WTO members completed their domestic ratification procedures and deposited a valid acceptance instrument. The threshold was reached on 22 February 2017.
- The TFA is the first multilateral trade agreement concluded by the WTO since its establishment in 1995.
- As of 9 February 2018, 131 WTO Members have accepted the TFA. The full list is available at the WTO's TFA Database.
- A developing or least-developed WTO Member can designate provisions in Section I of the TFA under the following categories:
- Category A commitments enters into force immediately.
- Category B commitments will be implemented after a transitional period following the entry into force of the TFA.
- Category C commitments will be implemented after a transitional period following the entry into force of the TFA and requiring the acquisition of implementation capacity through the provision of assistance and support for capacity building.
- Developed WTO Members are required to implement all provisions when the TFA enters into force.
- The TFA seeks to make cross-border trade easier, reduce costs and improve efficiency in doing business under a more transparent and predictable trading environment.
- According to the WTO's "World Trade Report 2015" issued in October 2015, full implementation of the TFA could -
- reduce trade costs of WTO Members by an average of 14.3% . Global merchandise exports will increase by between US$750 billion and US$1 trillion per annum
- overall boost to world export growth and global GDP growth per annum are estimated at up to 2.7% and 0.5% respectively
- likely reduce the time needed to import goods by over a day and a half and to export goods by almost two days, representing a reduction of 47% and 91% respectively over the current average