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Trade facilitation can be defined as the simplification of trade procedures, or “cutting out the red tape” at the border. The aim is to make trade flow more smoothly and thereby cut costs through means other than the removal of tariff and “traditional” non-tariff barriers.
In a study conducted in New Zealand by AC Nielsen (2001), exporters identified customs procedures as the second most common non-tariff barrier. Other countries’ importing and exporting regulations and customs procedures need to be more transparent, predictable, and simplified where feasible. This would be particularly beneficial for countries with a large number of small and medium enterprises (SMEs), such as New Zealand.
WTO Members agreed as part of the “July Framework” in 2004 to launch trade facilitation negotiations with the aim of clarifying and improving relevant aspects of Articles V, VIII and X of the GATT 1994. These Articles deal with, respectively, freedom of transit, fees and formalities connected with importation and exportation, and publication and administration of trade regulations.
Article V of the GATT currently sets out the basic principles allowing for freedom of transit through the territory of each Member, but provides no guidelines on how these principles should be applied. Issues that could clarify and improve this article could include: simplifying and standardising customs procedures and documentary requirements; providing non-discriminatory treatment between the modes of transit, individual carriers and types of consignment; and implementing existing international and regional transit instruments and arrangements. This is of particular interest to developing countries, and countries which are land-locked.
Article VIII of the GATT recognises the need for simplifying import and export formalities and documentation. It does not, however, provide any mandatory requirements in this area. Several Members have suggested that existing international standards should be used to simplify border-related documentation and procedures. Simplification of such requirements is likely to particularly benefit developing country exporters, particularly SMEs.
Article X of the GATT has the objective of ensuring transparency through publishing and making available to all parties concerned, in particular traders, all regulations, laws, rulings and other information affecting and relating to international trade processes, including cross-border procedures and customs administration. There is room to improve this Article and achieve greater transparency by clarifying the nature, frequency and means of publishing this information.
Both developed and developing country Members have put forward a variety of proposals to improve Articles V, VIII and X of the GATT.
For a list of the papers presented by New Zealand, as well as other background information, please see the document archive.
Papers Submitted to the World Trade Organisation Negotiating Group on Trade Facilitation
