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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. "Trade facilitation" is largely used by institutions which seek to improve the regulatory interface between government bodies and traders at national borders. The WTO, in an online training package, once defined trade facilitation 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 trade finance and 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 trade facilitation is extended to address a wider agenda in economic development and trade to include: the improvement of transport infrastructure, the removal of government corruption, the modernization of customs administration, the removal of other non-tariff trade barriers, as well as export marketing and promotion.
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
Topics and issues in trade facilitation
Trade facilitation has its intellectual roots in the fields of logistics and supply chain management. Trade facilitation looks at operational improvements at the interface between business and government and associated transaction costs. Trade facilitation has become a key feature in supply chain security and customs modernisation programmes. Within the context of economic development it has also come to prominence in the Doha Development Round. However, it is an equally prominent feature in unilateral and bilateral initiatives that seek to improve the trade environment and enhance business competitiveness. Reference to trade facilitation is sometimes also made in the context of "better regulation". Some organisations promoting trade facilitation will emphasize the cutting of red tape in international trade as their main objective. Propagated ideas and concepts to reforming trade and customs procedures generally resonate around the following themes:
- Simple rules and procedures
- Avoidance of duplication
- Memoranda of Understanding (MoUs)
- Alignment of procedures and adherence to international conventions
- Trade consultation
- Transparent and operable rules and procedures
- Accommodation of business practices
- Operational flexibility
- Public-service standards and performance measures
- Mechanisms for corrections and appeals
- Fair and consistent enforcement
- Proportionality of legislation and control to risk
- Time-release measures
- Risk management and trader authorisations
- Standardisation of documents and electronic data requirements
- International electronic exchange of trade data
- Single Window System
- "Compendium of Trade Facilitation Recommendations", issued by UN/ECE (TRADE/WP.4/INF.91); published by UNCTAD: TD/B/FAL/INF.91.
- "TRADE FACILITATION IMPLEMENTATION GUIDE - Introduction". tfig.unece.org. Retrieved 2015-10-07.
- Page, S (2010) What happens after Trade Agreements? ODI Project Briefing 12, Overseas Development Institute
- Grainger, A 2011. Trade Facilitation: A Conceptual Review, Journal of World Trade, 45 (1). pp. 39–62. ISSN ISSN 1011-6702
- Grainger, A 2007. Customs and Trade Facilitation: from concepts to implementation World Customs Journal, Volume 2, Number 1
- OECD. 2002. Business Benefits of Trade Facilitation
- Google Scholar: listed Trade Facilitation researchers
- AUSTRIAPRO: AUSTRIAPRO is an association affiliated with the Austrian Federal Economic Chamber.
- Asia-Pacific Research and Training Network on Trade (ARTNeT)
- Global Facilitation Partnership: A collaborative tool for practitioners and policy makers involved in trade facilitation and transport facilitation (TTF).
- SITPRO: United Kingdom's Trade Facilitation Agency dedicated to making international trade simpler by cutting red tape.
- SWEPRO: SWEPRO is Sweden's forum for discussion and information on international work for all issues related to simplification of trade procedures.
- TFC Publications Collection of trade facilitation papers
- Trade Costs and Facilitation: The Development Dimension: A World Bank research project on trade facilitation and development.
- United Nations Centre for Trade Facilitation and Electronic Business Webage with links to UN Trade Facilitation Recommendations
- World Customs Journal: Special Issue on Trade Facilitation (free access)