We have all attended meetings where there are 10 agenda items, but its five minutes to go and you realize you are only up to item four. Not so with the first meeting I attended in 2015 regarding the implementation of the WTO Trade Facilitation Agreement. People had flown into Canberra from across Australia to discuss the agreement with various areas of Government, but with half an hour left to go, people had run out of things to say.
This reflects the reality of the WTO Trade Facilitation Agreement for Australia. It was basically an agreement under which Australia agreed to do what it was already doing. The agreement sets a minimum level of trade facilitation measures, but its a minimum level most developed economies have already achieved. Not because they were bound to, but because it made economic sense to have efficient borders.
That is not to say the agreement is without merit. If it is implemented fully there will be benefits for our exporters. For example, in some foreign ports you cannot submit import documentation until arrival of the goods. If your goods are perishable and there is a documentation problem, you may have to watch them rot while the problem is resolved. Under the WTO agreement those developing countries will work towards allowing documents to be lodged prior to the arrival of the goods, providing an opportunity for issues to be resolved in advance.
There will be greater certainty as countries commit to doing simple things like publishing their customs procedures online and providing binding rulings regarding customs issues.
The benefits were most optimistically summarized by former Trade Minister Andrew Robb when he said:
“As the agreement targets regulatory barriers and border bottlenecks often overlooked in international trade negotiations, the benefits to Australia will be significant. With its focus on harmonising and streamlining global customs procedures the agreement will markedly reduce the length of time and the number of documents it takes Australian exporters to get their goods across borders. By requiring more transparent and predictable regulations, the agreement will also assist Australian businesses, large and small, in making international business decisions.
For Australian exporters, implementation of the agreement will mean marked improvements in the manner in which their goods are treated in offshore markets. In fact it has been estimated that full implementation of the agreement could reduce the costs of trading across borders by up to 10 per cent for Australian traders.”
Of course, the benefits will not be unique to Australia exporters. However, it will make Australian products more competitive against domestic goods and reduce the costs and difficulties associated with exporting, particularly to developing countries. This will benefit the world’s most needy people by reducing the cost of goods their country needs to import.