Trade facilitation

See also Trade Facilitation and Development.

Trade facilitation looks at how procedures and controls governing the movement of goods across national borders can be improved to reduce associated cost burdens and maximise efficiency while safeguarding legitimate regulatory objectives. Business costs may be a direct function of collecting information and submitting declarations or an indirect consequence of border checks in the form of delays and associated time penalties, forgone business opportunities and reduced competitiveness.

Understanding and use of the term “trade facilitation” varies in the literature and amongst practitioners. The term is largely used by institutions which seek to improve the regulatory interface between government bodies and traders at national borders. It is defined by the WTO as: “The simplification and harmonisation of international trade procedures” where trade procedures are the “activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade”.

In defining the term, many trade facilitation proponents will also make reference to the procedures applicable for making payments (e.g. via a commercial banks). For example UN/CEFACT defines trade facilitation as "the simplification, standardization and harmonisation of procedures and associated information flows required to move goods from seller to buyer and to make payment".

Occasionally, the term is extended to address a wider agenda in economic development and trade and may include: improvement of transport infrastructure, removal of government corruption, reduction of customs tariffs, removal of inverted tariffs, removal of non-tariff trade barriers, and export marketing and promotion.

Regulatory procedures in the control of international trade go beyond the customs area and include fiscal controls, safety and security measures, environment and health checks, consumer protection mechanisms, and trade policy regulations.

Examples of regulatory activity in international trade

Fiscal: Collection of customs duties, excise duties and other indirect taxes; payment mechanisms

Safety and security: Security and anti smuggling controls; dangerous goods; vehicle checks; immigration and visa formalities

Environment and health: Phytosanitary, veterinary and hygiene controls; health and safety measures; CITES controls; ships’ waste

Consumer protection: Product testing; labelling; conformity checks with marketing standards (e.g. fruit and vegetables)

Trade policy: Administration of quota restrictions; export refunds

External links

Trade Facilitation: A Review [1] A Working Paper prepared by Andrew Grainger

Trade Facilitation and Economic Growth: The Development Dimension [2]: A World Bank research project on trade facilitation and development.

Global Facilitation Partnership [3]: A collaborative tool for practitioners and policy makers involved in trade facilitation and transport facilitation (TTF).

EUROPRO [4]: An umbrella body for European trade facilitation committees and other like-minded, non-profit-making bodies.

SITPRO [5]: United Kingdom's Trade Facilitation Agency dedicated to making international trade simpler by cutting red tape.