Burdensome customs requirements present real challenges to companies of all sizes to trade internationally – particularly for smaller and medium-sized companies (SMEs). Trade facilitation is the general term for a package of measures to help cut red tape at borders.
Recent studies from the World Trade Organization (WTO) suggest that improvements in border administration throughout the world could boost global trade by US$ 1 trillion per year, meaning that trade facilitation could have a bigger impact on international trade than if all the world’s remaining tariffs were removed.
The developing world and SMEs disproportionately suffer from cumbersome border procedures, making them the biggest beneficiaries of greater trade facilitation. Easier, quicker and less expensive processes allow many companies to trade internationally for the first time, integrating global value chains.
In a watershed moment for global trade, the WTO Trade Facilitation Agreement (TFA) entered into force in February 2017. The TFA aims to speed up customs procedures, by making processes and fees more transparent for companies, rooting out corruption and taking advantage of new technologies.
Research by the World Economic Forum suggests TFA implementation could trigger a 60% to 80% increase in cross-border SME sales in some economies.
ICC has long been at the forefront of the global movement pushing for trade facilitation, playing a key role in the TFA negotiations, ratification and implementation. ICC’s business network also delivers consolidated positions on other customs issues, such as certificates and rules of origin, customs valuation and classification, and practical guidance on ICC’s Incoterms® rules.
ICC is one of three organizations that comprise the Global Alliance for Trade Facilitation – an innovative public-private partnership for trade-led growth and development – and regularly works with business, governments and international institutions like the World Customs Organization to advance the global customs and trade facilitation agenda.