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Antonia Eliason
University of Mississippi School of Law


The Trade Facilitation Agreement and the Changing Narratives of International Trade Law

          
  This paper argues that the WTO’s recent Trade Facilitation Agreement (TFA) is indicative of changing power dynamics in the international trade law arena as a result of a growing backlash against neoliberal globalism, both in the Global North and the Global South. Rather than dismantle institutions such as the WTO, it is more constructive to address growing inequality by changing the framework of how agreements are constructed, thereby changing the focus of the institutions themselves. The TFA does not go far enough in changing the narrative, but nevertheless offers a model of how states may begin to drive the discussion away from traditional neoliberalism to a more equitable and economically just approach to international trade. Transparency and greater inclusion of Global South nations at the negotiating table are key steps in this process. Going beyond the TFA, a shift from a macroeconomic approach to an individual-focused approach that addresses growing wealth inequality across both Global South and Global North nations is necessary to address concerns regarding economic injustice.

Trade facilitation constitutes those policies that deal with the entry of goods into a country and with the transparency and provision of information relating to the entry of goods. Trade facilitation measures are expansive in their breadth, covering all physical goods that are transported across borders. Trade facilitation also encompasses a broad range of regulatory measures, from those which impact private actors to regulations that provide the framework for customs administration.

The benchmark for current trade facilitation rules is the TFA. The TFA is the first multilateral WTO agreement to be finalized since the establishment of the WTO in 1995.[1] After years of negotiating failure during the Doha Round, the agreement of the TFA in December 2013 was a major accomplishment for the WTO. The negotiating process was transparent, with the draft text of the agreement publicly posted after each round of negotiations.[2] Perhaps most importantly, the special and differential treatment (S&DT) measures in the TFA reflected a deeper consideration of developing country concerns than evidenced in previous WTO multilateral agreement.[3] The TFA entered into force on February 22, 2017.[4]

The innovations in the S&DT measures in the TFA include provisions relating to capacity-building, wherein developed countries are to partner with developing countries to help build infrastructure necessary to implement trade facilitation measures.[5] In relation to these provisions, developing countries may opt into obligations with respect to these provisions if and when they feel ready.[6] Since many of the trade facilitation measures that help increase economic efficiency are costly to implement, requiring both physical and electronic infrastructural investments, such capacity-building measures are necessary to enable developing countries to reach the required minimum level specified in the TFA.[7] Once implemented, however, the economic benefits of the measures would be significant to both developed and developing countries.

One criticism of such capacity-building measures is that ultimately, the novel S&DT provisions may benefit developed countries more than developing countries. The beneficiaries of such advances in the area of customs administration will largely be the end consumers in developed countries as well as the intermediaries who transport the goods across borders, both of which will see significant cost savings. Whether the producers of the goods in developing countries see much of the resulting reductions in cost is questionable.

The concerns of the Global South are key to understanding the failures of multilateral, and now regional trade liberalization efforts in the past two decades. Throughout the Doha Round negotiations, the clash between developing and developed country concerns has prevented concluding another round of agreements, as the Global South, growing in influence, rightfully insists that its concerns be listened to at the negotiating table. In parallel, the rise in economic inequality in the Global North is pushing many to oppose international institutions such as the WTO. Ultimately, these institutions have the potential to do more good than harm, but the narrative of international trade must change before any beneficial evolution will occur.

 

 



[1] Antonia Eliason, ‘The Trade Facilitation Agreement – A New Hope for the World Trade Organization’ (2015) 14 World Trade Review, 643-670, at 643.

[2] Eliason, at 654.

[3] Eliason, at 662.

[5] Preparatory Committee on Trade Facilitation, Agreement on Trade Facilitation, WTO Doc.

WT/L/931 (adopted Jan. 15, 2014) (hereinafter TFA), arts. 21.1, 21.2, and 21.3.

[6] TFA, art. 13.2, 13.3.

[7] Developing countries were in fact highly critical of the Singapore Issues, which included trade facilitation. See Joseph E. Stiglitz and Andrew Charlton, Fair Trade For All: How Trade Can Promote Development (Oxford University Press, 2005), 59.