TFA: The trade facilitation customs agreement

On February 22, 2017, the global trading system achieved a major milestone with the acceptance of the Trade Facilitation Agreement (TFA) by two-thirds of the 164 Members of the World Trade Organization (WTO).

It is the first multilateral trade agreement concluded since the establishment of the WTO in 1995.

According to the World Trade Report 2015, which is the first detailed study of the potential effects of the TFA based on a full analysis of the text of the final agreement, it forecasts that full implementation of the TFA will reduce members' trade costs by 14.3%, on average, and it will be the developing countries that will benefit the most.

“By making trade safer, cheaper and faster, the TFA enables trade to happen as fast as the e-commerce economy demands, and will enable Latin American businesses and consumers to engage with markets around the world. the world.”- Inbound Logistics

How can Mexico compete on the world stage?

 1.- Improving the security of the supply chain

The key to securing the 21st century supply chain is transparency: the easier it is to answer the who, what, when, and where of a shipment, the more secure supply chains will be.

The AFC directly addresses this issue by implementing “trusted merchant” programs that expedite customs clearance for well-known, regular carriers that carry the majority of the world's trade volume and have strong partnerships with delivery service providers.

2.- Trade: Reaching more consumers. 

This is particularly important for micro, small and medium-sized companies that want to trade internationally, the TFA supports a major export program by eliminating unnecessary costs and bureaucracy, thus making it easier for companies to access foreign consumers.

"When trading becomes easier, more trade happens, and the TFA will make it easier for companies to sell to new markets."

Currently, Chile leads in Latin America for the facilitation of trade, its efficient and transparent border processes, but like the rest of the region, it struggles especially with transportation infrastructure.

3.- Strengthen the weakest links in the supply chain

The TFA goes further than any other trade agreement reached in decades to raise standards among developing countries with the weakest trade infrastructure, and in doing so connects their growing and prosperous middle-class populations to the world economy.

Many developed countries already have these measures in place. But with the TFA, the 164 members of the WTO will now work to meet these rules, thereby strengthening the entire global supply chain.

Last year was the first time since 2001 that Gross Domestic Product (GDP) growth outpaced trade growth.

Now is the time to reinvest in safe, easy and modern customs processes. As countries work to meet the new AFC standards, Latin America and the world at large have a unique opportunity to equip businesses and customers with the tools they need to succeed on the world stage.