What Is A Facilitation Agreement

Trade facilitation has its intellectual roots in logistics and supply chain management. Trade Facilitation examines operational improvements at the interface between the company and the government and related transaction costs. Trade facilitation has become a key component of supply chain security and customs modernization programs. It has also gained importance in the context of economic development in the Doha Development Round. However, this is an equally important feature of unilateral and bilateral initiatives to improve the business environment and improve business competitiveness. The reference to trade facilitation is sometimes part of improved regulation. Some organizations that promote trade facilitation will emphasize the main objective of reducing bureaucracy in international trade. The ideas and concepts put forward for reforming trade and customs procedures are generally as follows: the trade facilitation agreement having been pushed to be a non-binding document, rather a number of incentives for developed, developing and least developed countries, it has left many developing and least developed countries with doubts about the obligation of assistance of the most prosperous countries. Many African nations are wondering how this agreement can benefit them not only for international trade, but also for interregional trade. [7] As a result, many developing countries are still unable to fully commit to ratifying this agreement.

Developed countries have demonstrated their commitment to the agreement because they are able to meet their requirements. However, many nations such as India and China have committed only 70-75% of measures to facilitate trade. [7] At this meeting, least developed countries and trade facilitation experts met to discuss the conditions needed to ensure the implementation and success of the agreement, including technical assistance and capacity-building support. Currently, the cost of international trade is about $2 trillion. [4] This situation is due to a number of factors, including unnecessary customs procedures, marginal taxes and unnecessary duplication. [4] The economic benefits of the Trade Facilitation Agreement are not yet fully discernible and measured. However, estimates of the economic benefits resulting from the agreement are widespread. Estimates range from about $68 billion to nearly $1 trillion per year.

According to the OECD, the Trade Facilitation Agreement has the capacity to reduce trade costs by 14.1% for low-income countries, 12.9% for middle-income countries and 12.9% for middle-income countries by 14.1%. This would indicate a series of gains of about $9 to $133 per year per person on the planet. These large margins indicate that there are still some uncertainties related to the trade agreement. [5] Part of the agreement includes assistance to developing and least developed countries in updating their infrastructure, training of customs officials or any other costs associated with the implementation of the agreement.