The WTO Trade Facilitation Agreement (WTO TFA) was concluded in 2013 and entered into force in 2017. Its focus is on rules related to the clearance, release and movement of goods across borders (trade facilitation).
Although this area is not solely about digital trade (and seperate to the e-commerce processes within the WTO), its implementation can have a significant impact in terms of cross-border e-commerce, digitalisation of trade processes and more generally supporting digital procedures in developing countries.
TFA agreement in the WTO
The WTO TFA has now been accepted by over 170 of the WTO’s 164 members meaning it covers the overwhelming majority of world trade.
The TFA is a binding WTO agreement, so members are legally obliged to implement its provisions. However, it is unusual in allowing flexibility: each country can decide how quickly to put measures in place, and developing countries can designate commitments as Category A (implemented immediately), Category B (requiring more time), or Category C (requiring both time and technical assistance).
This design was meant to ensure that even the poorest members could participate, while still making the deal mandatory in the long run.
Digitalisation of trade and e-commerce
The TFA has strong ties to the growth of the digital economy. Many of its provisions directly encourage digitalisation in trade, which is crucial when goods move rapidly across borders through online sales.
Examples of areas where the TFA encourages trade digitalitsion and e-commerce includes:
- Publishing of trade rules and procedures online – Making importing more transparent, supporting smaller firms including e-commerce sellers
- Acceptance of electonic documents and payments – Reducing delivery times and encouraging online integration
- Promotion of “single window” systems – These allow traders the ability to submit all documents online
- Provisions around risk management and customs – Allowing countries to improve and standardise their management of customs, which can increase cross-border e-commerce
Outcomes
Arguably due to its focus on less controversial areas of trade and its unique structure, the takeup of the TFA has been seen as a positive development by most countries.
Given its relatively recent adoption and its institutional form, there remain questions as to the extent that such agreements trickle down into the implementations of trade facilitation, particularly from the perspective of small firms.