REPUBLIC OF THE PHILIPPINES

DAVAO ORIENTAL STATE UNIVERSITY

Guang – guang, Dahican, City of Mati

INTERNATIONAL BUSINESS AND TRADE

Trade Facilitation and Development

Group 9

BARIL, QUEENIE

FRANCISQUETE, MICHAEL JAY B.

COLARTE, ANGEL

Instructor:
Mr. Ruel Campo
Trade Facilitation and Development

-International trade can be a clumsy and hectic affair if not for official organs of the
government and other financial institutions such as the World Trade Organisation.

Trade Facilitation

- Trade facilitation looks at 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.
Examples of Regulatory Activity in International Trade
Fiscal: Collection of customs duties, exercise duties and other indirect taxes; payment
mechanism

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; ship’s waste
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.
•The WTO Trade Facilitation Agreement (TFA) will improve trade efficiency worldwide,
encouraging economic growth by cutting red tape at borders, increasing transparency and
taking advantage of new technologies.
• The TFA contains provisions for expediting the movement, release and clearance of goods,
including goods in transit. It also sets out measures for effective cooperation between
customs and other appropriate authorities on trade facilitation and customs compliance issues.
It further contains provisions for technical assistance and capacity building in this area.
• 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
• Paperless trade
• Risk management and trader authorizations
• Standardization of documents and electronic data and requirements
• Automation
• International electronic exchanges of trade data
• Single Window System
Trade Facilitation and Development
success in export markets for developed and developing country firms is increasingly affected
by the ability of countries to support an environment which promotes efficient and low cost
trade services and logistics. Policies related to trade facilitation and economic development
reflect the idea that trade can be a powerful engine for accelerating economic growth, job
creation, and poverty reduction.
Background
World trade has expanded rapidly over the past decades. This has been driven, in large part,
by the changing nature of both production and increased competition in international
commerce. Another important factor contributing to the growth in trade has been the periodic
rounds of successful multilateral trade negotiations. These talks at the World Trade
Organization (WTO) have led to a considerable reduction in tariffs on goods crossing
national borders. Today, as the role of traditional trade barriers gradually vanishes, the focus
of trade policy has shifted to the remaining Bon-tariff barriers to trade, including trade
facilitation.

Cross-country Comparisons and Performance

There is an increasing body of empirical evidence about the impact of trade facilitation on ex-
port competitiveness and growth. Studies reviewed by the Organization for Economic
Cooperation and Development (OECD, 2002) indicate that trade transaction costs amount to
up to 15 percent of the value of traded goods globally.

World Bank Research

The World Bank is conducting extensive research on the issue of trade facilitation and its
effect on trade, economic growth, and development. The main part of the research is carried
out under the project Trade Costs and Facilitation. This project is focused on contributing to
stronger understanding of the concrete relationships between trade costs, trade facilitation,
private sector growth, and export competitiveness in developing countries. A major focus of
the work is on exploring the dynamic gains associated with lowering trade transactions costs
and identifying the relative importance of related reform measures.

What are the Gains from Cutting Trade Costs?

There are important gains to lowering trade costs and facilitating trade with some variation
across countries and sectors (Francois et al., 2005; OECD, 2003). Several studies have
focused on the impact of trade facilitation on the micro-level (OECD, 2005). They observe
that in some developing countries inefficient trade regulations, documents and procedures are
hindering firms' participation in export markets. The studies find large potential benefits from
streamlining trade regulations and hence cutting the costs for exporting.
Trade Costs and the Multilateral Trading System
talks are underway on revisions to the WTO rules on trade facilitation in the Doha
Development Agenda negotiations. The outlines of a possible agreement includes, among
others: (1). New obligations to promote electronic distribution and transmission of
government trade regulations on imports and exports; (2). Standardization of certain basic
fees for imports; (3). Stronger rules to help ensure freedom of transit for goods crossing
national borders.

The Agenda Ahead

At the most basic level, better data, analysis, and indicators of performance are needed to
inform discussions moving forward on how trade costs and facilitation measures affect global
commerce. Progress in reaching development goals in trade can only be made with accurate
data and analysis to drive policy choice and action. Taking advantage of the energy behind
reaching the Millennium Development Goals (MDGs), building on the datasets in the global
monitoring reports which track progress in reaching poverty reduction goals, among other
reports, makes significant sense. In sum, the data gathered to date illustrate the fact that the
non-tariff agenda in trade is increasingly Important to economic development ahead.