Comments due March 4, 2016
As the global economy struggles to emerge from its chronic slow-growth stall, policymakers are increasingly focused on an energetic opportunity to help jump-start economic growth: the adoption of the landmark Trade Facilitation Agreement (TFA) that is now nearing ratification and implementation. By helping reduce trade costs and by helping enhance customs and border agency cooperation, a recent WTO report has found, the successful implementation of the TFA’s provisions could boost developing-country exports by between $170 billion and $730 billion per year. The OECD has calculated that the implementation of the TFA could reduce worldwide trade costs by between 12.5 percent and 17.5 percent.
Buoying the spirits of those who hailed the broad support for TFA at December’s ministerial conference of the World Trade Organization (WTO) in Nairobi, 68 countries have already ratified the agreement. The number of county-by-country ratifications is fast approaching the total of 107 required for the TFA to go into effect. Adopted in December 2013 at the WTO’s conference in Bali, the TFA is the WTO’s first-ever multilateral accord, having won approval from all 162 WTO member nations. The agreement contains provisions for expediting the movement, release and clearance of goods traveling across borders. It also sets out measures to promote cooperation among customs and border authorities on customs compliance issues.
A recent seminar at the World Bank Group – convened by the Trade Facilitation Support Program (TFSP) of the Trade and Competitiveness Global Practice (T&C) – explored the provisions of the TFA and learned of the increasingly active role of the private sector in supporting the TFA’s enactment. Awareness and momentum are building as a new coalition of private-sector firms – the Global Alliance for Trade Facilitation – mobilizes business support for TFA’s effort to speed and strengthen cross-border commerce. As the seminar heard from Norm Schenk, who serves as the chairman of the International Chamber of Commerce’s (ICC) Commission on Customs and Trade Facilitation, members of the alliance plan to meet in Washington this week to explore strategies for promoting the TFA’s adoption.
Buoying the spirits of those who hailed the broad support for TFA at December’s ministerial conference of the World Trade Organization (WTO) in Nairobi, 68 countries have already ratified the agreement. The number of county-by-country ratifications is fast approaching the total of 107 required for the TFA to go into effect. Adopted in December 2013 at the WTO’s conference in Bali, the TFA is the WTO’s first-ever multilateral accord, having won approval from all 162 WTO member nations. The agreement contains provisions for expediting the movement, release and clearance of goods traveling across borders. It also sets out measures to promote cooperation among customs and border authorities on customs compliance issues.
A recent seminar at the World Bank Group – convened by the Trade Facilitation Support Program (TFSP) of the Trade and Competitiveness Global Practice (T&C) – explored the provisions of the TFA and learned of the increasingly active role of the private sector in supporting the TFA’s enactment. Awareness and momentum are building as a new coalition of private-sector firms – the Global Alliance for Trade Facilitation – mobilizes business support for TFA’s effort to speed and strengthen cross-border commerce. As the seminar heard from Norm Schenk, who serves as the chairman of the International Chamber of Commerce’s (ICC) Commission on Customs and Trade Facilitation, members of the alliance plan to meet in Washington this week to explore strategies for promoting the TFA’s adoption.
As a mechanism for business engagement in the TFA process, the Geneva-based coalition was launched as a platform for public-private cooperation to advance the implementation of key provisions of the TFA, said Schenk, who in addition to his ICC role is the vice president of global customs policy and public affairs for the express delivery firm UPS. Organizations supporting the alliance include the ICC, the World Economic Forum and the Center for International Private Enterprise. The alliance also seeks synergies with the work of such international bodies as the World Customs Organization, the WTO and United Nations Conference on Trade and Development (UNCTAD).
The alliance aims to build a broader understanding of the benefits of trade facilitation; establish multi-stakeholder dialogues on trade; mobilize public-private partnerships by engaging local businesses and associations; provide technical and financial assistance in support of capacity-building; and pursue benchmarking and evaluation based on established business metrics.
Launched by T&C in 2014, the TFSP now offers support to almost 50 countries that have committed to implementing reforms to align with the TFA. By helping developing countries implement trade facilitation reforms, the TFSP aims to stimulate increased cross-border trade and investment, thus spurring job creation in the economies of all trading nations. As the TFSP’s leader, Bill Gain, told the seminar, the program is central to the WBG’s support for implementation of the TFA, complementing the WBG’s broader efforts on trade facilitation. Total WBG support for trade facilitation – including both “hard” and “soft” infrastructure – is currently more than $7 billion.
The TFSP has worked with client countries that are focused on such priorities as setting up or strengthening national trade facilitation committees; conducting legal analyses of gaps in the way their national regulations would comply with the TFA; strengthening specific measures like advance rulings, post-clearance audits and simplified procedures for expedited shipments; and implementing national “trade portals.” The TFSP is supported by seven donor partners: the European Union, the United Kingdom, Norway, Switzerland, Australia, Canada and the United States.
As the TFA advances toward adoption, T&C and the TFSP are committed to helping client countries anticipate how to implement its provisions, and are eager to continue a wide-ranging dialogue with the Global Alliance for Trade Facilitation. Three ideas of where we could focus our collaboration include:
Launched by T&C in 2014, the TFSP now offers support to almost 50 countries that have committed to implementing reforms to align with the TFA. By helping developing countries implement trade facilitation reforms, the TFSP aims to stimulate increased cross-border trade and investment, thus spurring job creation in the economies of all trading nations. As the TFSP’s leader, Bill Gain, told the seminar, the program is central to the WBG’s support for implementation of the TFA, complementing the WBG’s broader efforts on trade facilitation. Total WBG support for trade facilitation – including both “hard” and “soft” infrastructure – is currently more than $7 billion.
The TFSP has worked with client countries that are focused on such priorities as setting up or strengthening national trade facilitation committees; conducting legal analyses of gaps in the way their national regulations would comply with the TFA; strengthening specific measures like advance rulings, post-clearance audits and simplified procedures for expedited shipments; and implementing national “trade portals.” The TFSP is supported by seven donor partners: the European Union, the United Kingdom, Norway, Switzerland, Australia, Canada and the United States.
As the TFA advances toward adoption, T&C and the TFSP are committed to helping client countries anticipate how to implement its provisions, and are eager to continue a wide-ranging dialogue with the Global Alliance for Trade Facilitation. Three ideas of where we could focus our collaboration include:
- Data, analytics and diagnostics. Through the TFSP, we have conducted detailed assessments of the gaps that need to be addressed for the full implementation of the TFA in 41 countries, based not just on reviews of legislation but on operational assessments of what is required. The Global Alliance, through its private-sector focus, could be in a strong position to complement this with data gathered by private-sector operators on trade facilitation performance at the country level. That could help analyze the problems that need to be faced, and it could also support the continuing monitoring of reform.
- Supporting reforms to implement the TFA at the country level. Diagnostics and analytics are the first step. The real challenge is implementing lasting reform at the country level. We could work with the Global Alliance to pilot collaboration at the country level, building on our respective strengths, to support reform.
- Improving global collaboration and advocacy on the TFA. The World Bank Group, along with the WTO and a number of other international organizations, was a founding member of the “Annex D” group of organizations supporting the implementation of the TFA. The informal group collaborates on assistance at the country level, disseminates information about experiences in implementing TFA reforms, and advocates for effective implementation. Working with the Alliance on this global agenda related to the TFA could help strengthen our respective efforts.
Though, advocates of the TFA have very encouraging projection numbers on their side ($1 trillion boost & 21 million jobs) there are still valid concerns regarding the proposed reforms. Namely, the level of investment required to upgrade the borders and ports in developing countries and how successful these countries can realistically be in implementing the reforms proposed by the TFA. These concerns leave policymakers and nations in a position of uncertainty surrounding the potential outcome of TFA reforms.
ReplyDeleteAn interesting aspect of the TFA is that it will rely largely on an unprecedented level of cooperation between private companies and governments in order to increase efficiency and drive costs down when it comes to the logistics of international trade. It will be interesting to see how effective the T&C and TFSP will be in aiding developing nations attempting to implement these reforms. All it would take is a larger government, like the U.S, to decide they have interests that conflict with the terms of this reform and the TFA could be stopped in it’s tracks. As we see outcomes of TFA’s progress we will also learn how able opposing governments and private sector interests are to work with one another and make meaningful progress.
The Trade Facilitation Support Program (TFSP) was created on June 10th 2014 to help countries reform their trade facilitation practices in a manner that keeps the main components of the Trade Facilitation Agreement (TFA) consistent. The aim is to improve trade systems, services, and practices, that may potentially lead to increased trade between countries and foreign investments that also leads to increased GDP of a nation.
ReplyDeleteWith the support of the European Union, the United Kingdom, Norway, Switzerland, Australia, Canada and the United States, other undeveloped countries are helped facilitating there foreign trade market so that their economies have the opportunity to improve. With such support, the argument made by countries such as Brazil, Jamaica, and Zimbabwe that their equipment and technology is not up to date with developed country standards, they still at a disadvantage, so the WTO needs to implement such policy that these undeveloped nations may also receive help in regards to technical support and law facilitation. The question about private sector competitiveness? Whether allowing private companies to compete with the Government is good for such trade agreements or not?
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ReplyDeleteThe TFA seems to be the answer to the economic slowdown that has affected international trade greatly. With the overwhelming support by the WTO as well as the TFSP and the T&C the TFA will hopefully reach its projected goals to stimulate international trade and help developing countries exports, reduce trade costs and stimulate job growth. By building a strong backing for the TFA through alliance and the donor partners backing by the TFSP the necessary funding to launch the TFA properly and continue its implementation may come more smoothly as hoped. The donor contributions will increase world trade and their own revenue in the world trade market with cheaper trade with developing countries. The proper amount of attention and detail to the TFA's reforms will determine it's success in regenerating the economic slowdown the international trade market has currently been facing.
ReplyDeleteThe imminent Trade Facilitation Agreement is a beacon of light in our dismal global economy. Reducing worldwide trade costs by 12.5 to 17.5 percent, the agreement relies on combined effort between public and private sectors to implement improved international trade provisions. However, with varying development, security, and cooperation in emerging countries, it will be difficult to ensure TFA standards worldwide. The reform calls for updated border security, expedited shipping, and trade practice improvement, with ultimate goals of increasing international trade and investment.
ReplyDeleteWhile the TFA may seem idealistic and unrealistic, it retains support from seven influential donor countries, including the U.S. The committed folks in the Trade Facilitation Support Program within the Trade and Competitiveness Global Practice are striving to connect countries around the world in this cooperative agreement. If ratification and implementation proceed as expected, I believe the TFA will lead to greater global prosperity.
The Landmark Trade Facilitation Agreement ( TFA ) helps to reduce trade costs from enhancing border agency corporation and customs. It is beneficial to reduce worldwide trade costs by between 12.5 percent and 17.5 percent. During at the WTO’s conference in Bail at December 2013. The TFA is the first ever WTO that has won approval from all 162 WTO member nation. The TFSP aims to stimulate the cross border trade and investment through provoking job creation in the economy of all trade nations. T&C and TFSP are promised to help client countries to learn implementing its provision and are passion to work continues with the Global alliance for Trade Facilitation. There are three concepts that are important in their collaboration such as Data, analytics and diagnostics , support reforms to implement the TFA at the country level and improve global collaboration and advocacy on the TFA.
ReplyDeleteThe TFA would allow for an even more seamless integration of an already synergistic global economy. The multidimensional approach of this agreement, such as the engagement of PPPs and technical and capital-intensive assistance shows a world that is much more holistic in its understanding of the global landscape and how the economies around the world are dependent on one another.
ReplyDeleteAnother interesting aspect is how exactly this trade agreement attempts to support reform in the micro-scale, country level. To engage multiple member countries in this agreement will be difficult, considering economies of each client countries will be very different - is there going to be a standardized process? Or will this agreement be tailored to each country based on unique situations and capabilities?
On the flip side, one thing that will also be analyzed deeply are the negative externalities associated with such a provision. Without politicizing the trade agreement (an outcome that is inevitable especially in campaign season), it would be interesting to understand how this impacts sociocultural notions of nativism. Many people in the US are deviating from open borders and instead restricting flow (in terms of goods, people, etc.). Considering the TFA attempts to streamline the trade process by decreasing restrictions and overall making the global trade process more efficient, how does regulation and control come into play when the volume of goods will undoubtedly increase?
The TFA is aiming to reduce trade barriers and promote global GDP growth throughout the world. One specific line that stuck out to me toward the end was "The real challenge is implementing lasting reform at the country level.". This quote jumped out at me because of the article we read I believe around week 2 or 3 called "Mercantilism in the US". This article talked about how the US government put up tariffs on all types of goods that were being relied on as exports for other countries. Why were the tariffs instilled? Because lobbyists were losing profit and had enough swing to get politicians behind them.
ReplyDeleteThe mercantilist view in countries like the US, while this article says they are supporting the agreement, may not allow this agreement to hold up. Reducing of trade costs by a clip of 12-17% could allow many emerging markets to get the kickstart to their economies that they need, however, we need to hope that the bigger countries will play fair.
The TFA forecasts great potential to increase trade among member nations. The agreement relates to a healthy business model looking to streamline procedures and enhance the productivity of countries involved. One question that was brought to mind was what are the current barriers to trade that the agreement is seeking to remove and why were the barriers there originally?
ReplyDeleteWith the global economy in a rout a trade agreement, especially in the private sector would be beneficial in helping enhance growth and build demand for goods. This agreement, if passed, would allow capital to flow more freely and lead to a more consumption based economy for the parties involved in trade. This type of organic growth is stable and a more long term result that we could see. Hopefully the full 107 countries get involved and we begin to realize the benefits and get the global economy out of its rout.
The TFA's goal is to boost exports and reduce the costs of international trade. The estimated cost reduction of 12.5-17.5% is a sizable amount, and is definitely optimistic. The effects of this agreement would be seen throughout the world, whether it be reducing costs for consumers, or providing jobs in developing countries. I would be interested to read about the amount of investment that will be necessary to implement these provisions, and how much the US is planning to contribute.
ReplyDeleteIt is also interesting that this entire plan relies heavily on the cooperation between the public and private sectors. This cooperation seems to be a strong focal point, being that it will strengthen our knowledge and intel database of international trade facilitation. Further, The T&C and TFSP are committed to easing the implementation of the TFA in developing countries, and when it is passed, I wonder what their first move will be in these countries.
This article is an interesting follow-up to the prior article about the Trans-Pacific Partnership. One point of distinction, between the two is the amount of attention being given to both of them. The Trans-Pacific Partnership has arguably been given much more emphasis and attention in recent weeks, especially in the political realm. Meanwhile, not much is being said of the TFA, at least at a broad level.
ReplyDeleteSimilar benefits and issues are possible with the TFA as there are with the TPP. For example, the TFA's purpose is to facilitate job growth among all of its countries, as exports rise from an increase in exporting among developing countries. The TPP has a similar goal; aiming to make trade easier among the countries involved, including some less-developed countries like Singapore, Malaysia and Vietnam. The potential benefit to this is that exports in these countries increase at a healthy ratio in respect to their imports (which, ideally would increase as well). In this case, there would not be a significant shift in favor of any country over the others. A further benefit to this potential outcome is that it could (and likely would) lead to job growth in all countries involved. This is the aim of the TFA, namely, to bring job growth and cost cutting by increasing cooperative international trade among both well-developed countries like the United States and developing countries.
The main risk associated with agreements like the TFA and TPP is that it may heavily favor less-developed countries in that it may be more beneficial to them. Well developed economies like that of the United States and many western European countries are typically in a fairly riskier position when it comes to agreements like this because their exports are not as competitive at a cost level as those of countries like China, Taiwan, Singapore or Vietnam where cheap labor and resources leads to cheap (and thus competitive exports). This scenario may lead to a shift of exports away from larger countries that cannot afford to be as competitive with their prices.
However, it has yet to be seen what the impact of these agreements are, and given the current strength of consumer spending within the United States, a increase in US importing may still result in a net benefit to the economy if consumer spending increases accordingly. A decrease in exports may not immediately spell doom for our economy (and likely won't, unless economic conditions change rapidly for the worse in the near future), and we may in fact stand to benefit (along with the other signatories) from these trade agreements.
The Trade Facilitation Agreement (TFA) is the jump-started needed to stimulate our current economic situation. The implementation of the TFA has calculated a reduction in trade costs by 12.5% to 17.5%. Supported by the TFSP, the ICC, and the WTO the TFA is now reaching implementation. Not only will the TFA boost trades worldwide, but it will increase developing countries exports by between $170 billion and $730 billion per year. The Trade Facilitation Support Program (TFSP) aims at increasing the job numbers by stimulating trade.
ReplyDeleteAs we are approaching the application of the TFA, the TFSP helps the involved countries prepare for this trade increase in order to fully extrapolate its potential. To accomplish this the TFA concentrates on three fields of collaboration: data, analytics, and diagnostics, supporting the TFA and improving global collaboration.
Although the TFA seems like an unreachable goal but it already got the approval from all 162 WTO nations and is approaching rapidly the required 107 signatory countries to be approved.
The TFA (Trade Facilitation Agreement) projects that through the use of their policies they will reduce trade cost from 12.5% to 17.5%. The significant drop in trade cost would give opportunity for the emerging markets to trade and compete in a level playing field. Such policies may be seen as very idealistic in this scenario. This is due to the fact that private sectors much cooperate efficiently and properly with the government, which is a problem in and of itself in many nations. The TFSP has stepped in to try and provide data driven analytic solutions to help these nations achieve the proclaimed exports. They are convinced that in collaboration the TFA will be large success despite the uphill battle of cooperation and implementation of such strategies that involve upgrading ports and internal infrastructure of these developing nations.
ReplyDeleteThe Landmark Trade Facilitation Agreement, or TFA, helps reduce trade costs and by helping enhance customs and border agency cooperation. The TFA can successfully reduce cost of trade by 12.5-17.5% . But without the right supporters, it can not be a success worldwide. Not only will it cut trade costs, but can also help employ those in developing countries who need the employment.
ReplyDeleteThis agreement depends fully on public and private sectors cooperating, which can pose to be difficult. The TFSP offers support to almost 50 countries that have committed to implementing the reforms to align with the TFA. The TFSP aims to stimulate increased cross-border trade and investment, leading to job creation in the economies of all trade nations.
In December 2013, WTO individuals finished up transactions on a Trade Facilitation Agreement at the Bali Ministerial Conference, as a major aspect of a more extensive "Bali Package". From that point forward, WTO individuals have attempted a lawful audit of the content. The subsequent last content is accessible here. In accordance with the choice received in Bali, WTO individuals embraced on 27 November 2014 a Protocol of Amendment to embed the new Agreement into Annex 1A of the WTO Agreement. The Trade Facilitation Agreement will go into power once 66% of individuals have finished their residential approval process.
ReplyDeleteThe Trade Facilitation Agreement contains procurements for speeding up the development, discharge and freedom of merchandise, incorporating products in travel. It additionally sets out measures for viable participation in the middle of traditions and other suitable powers on exchange help and traditions consistence issues. It further contains procurements for specialized help and limit working around there.
ReplyDeleteThe Trade Facilitation Agreement would be a would be a great adoption. Its goal is to help reduce trade cost and help enhance customs and border agency cooperation; this can benefit so many countries. It is a great initiative that the TFA is taking by helping everyone understand their goals. They are doing so by establishing multi-stakeholder dialogues on trade; mobilizing public- private partnerships by engaging local businesses and associations. Great strategy of the TFA, that now they have so much support from so many different countries. Not only do they have support from different countries but as well as organizations such a T&C and TFSP. With their collaboration they will work on data, analytics and diagnostics, supporting reforms to implement the TFA at the country level and improving global collaboration and advocacy on the TFA. Although the level of investment is high, it seems to have a promising future.
It is clear that the Trade Facilitation Agreement would be very beneficial. It has the potential to tremendously decrease trade costs over time. The article states "the successful implementation of the TFA’s provisions could boost developing-country exports by between $170 billion and $730 billion per year and the OECD has calculated that the implementation of the TFA could reduce worldwide trade costs by between 12.5 percent and 17.5 percent." It is no wonder that the TFA is the WTO's first ever multilateral accord, and won support from all 162 WTO members. If worldwide trade costs decrease anywhere between that amount, the benefits would be substantial. It would allow room for developing countries to enter markets and promote worldwide economic sustainability. Only time will tell if the TFA can be implemented on a large scale and whether each country can adopt the provisions necessary.
ReplyDeleteI think that the Trade Facilitation Agreement (TFA), based on my understanding is vital to make impactful change, but it’s one of those things where the progress is going to get uglier before it gets better. They already have 50 countries on board and 41 were surveyed, so that in itself proves that it’s not only possible, but that WTO will likely get the number of supporters needed (162 WTO Member Nations). Although the numbers seem a bit optimistic, and the costs seem a bit underestimated for such a global move, I get the impression that they will manage to keep things within a reasonable window.
ReplyDeleteAlthough I do believe that the collaboration needed between public and private sectors will probably take work. The amount of updating for countries that are not necessarily up to par with technology might me too monumental to have it done otherwise. Now I sit back and wonder what will be the affects of our current political standings (the Presidential elections) on the TFA. Realistically speaking we learned in the Doha Round, that some countries sit back and look for the reaction of other countries like the U.S. before making a final decision, as they ponder how those relationships will affect them after such decisions are made.