08 September 2008
Department for Innovation, Universities and Skills (DIUS)
 
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Trade Facilitation

What is Trade Facilitation?

The World Trade Organisation (WTO) definition of trade facilitation is “the simplification and harmonisation of international trade procedures” with trade procedures being “activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade”.

In simple terms trade facilitation focuses on simplification and rationalisation of customs and other administrative procedures, which get in the way of trading across borders.

Trade facilitation reduces scope for illegal trafficking, corruption and fraud. Presently inefficient procedures act as a hidden tax (but with no public benefit) on the honest trader. Trade facilitation is also a paradigm of good governance: transparency, better regulation, due process, and government-private sector working together.

Today freight security is of increasing (and justifiable) concern. Trade facilitation measures i.e. clear and robust rules, will give assurance of the adequacy (and proportionality) of security controls; and will enable a forum for guarding against arbitrary – and perhaps conflicting – national measures being imposed by individual countries.

Benefits to business include:-

faster clearance and release of goods

  • cutting costs and reducing delays
  • predictable application and explanation of rules
  • Increased transparency and integrity
  • simple commercial framework for doing business both domestically & internationally
  • enhanced competitiveness

International Trade Single Window (ITSW).

The UK is fully committed to reducing red tape associated with the International supply chain. BERR, Her Majesty's Revenue & Customs (HMRC) and Department for Environment,Food & Rural Affairs(DEFRA), are working on the development of an International Trade Single Window (ITSW). Once developed this will provide a single point of Entry, through which traders clear all of their UK export and import formalities (see  related documents section on right for more details) 

Trade Facilitation within the WTO

Trade Facilitation was added to the WTO agenda in December 1996, when the Singapore Ministerial Declaration directed the Council for Trade in Goods “to undertake exploratory and analytical work, drawing on the work of other relevant organisations, on the simplification of trade procedures in order to assess the scope for the WTO rules in this area”. Work was expanded in July 2004 when members agreed to launch negotiations on trade facilitation.

The WTO mandate for the negotiations on trade facilitation (in Annex D of the July 2004 Framework Agreement) is “to clarify and improve the relevant aspects of Articles V (Transit), VIII (Fees & formalities relating to importation and exportation) and X (transparency of trade regulations) of GATT 1994 with a view to further expediting the movement, release and clearance of goods, including goods in transit.”  Technical assistance, capacity building and special and differential treatment will play a large part in the negotiations.

For further information please refer to the WTO website.

Why are WTO rules necessary?

  • The non-rules approach, pursued with increasing momentum by many countries over the last 50 years, has failed to unlock the estimated annual savings of €300 billion worldwide which (the EC estimates) trade facilitation has to offer
  • The WTO is uniquely placed to set and implement fair and transparent rules
  • Action on procedural barriers complements WTO liberalisation of tariff and non-tariff barriers whose potential will not be reached if inefficient border procedures are not dealt with
  • Multilaterally agreed rules ensure a level playing field for all countries

Contact:

Response Centre 
Tel:020 7215 5000   
or :020 7215 6740 (Minicom)
Fax:  020 7215 0105 email: enquiries@berr.gsi.gov.uk

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