Upcoming: Facilitation 2.0 in Regional Trade Agreements: Enabling Trade in the Digital Age

June 11, 2018

One year on from its entry into force, the World Trade Organization (WTO) Trade Facilitation Agreement (TFA), the only multilateral deal to have eluded the Doha Round deadlock, has allowed for sustained momentum on the trade policy reform agenda and provided new oxygen in a stifled negotiating environment. Ratified by four in five WTO members, the experience of the TFA makes a cogent case for the negotiation of trade-enabling rules. According to WTO data, the full implementation of the TFA could reduce worldwide trade costs by an average of 14.3 percent, with the largest gains for small and medium-size enterprises in developing and least developed countries.

The reduction of transactional costs through simplification, homologation, and enhanced transparency could have significant impact on the ability of least developed and developing countries to participate in the new digital age dominated by complex value chains. Indeed, the TFA is not only an instrument for increasing trade volumes, but a means for achieving greater economic inclusiveness.

However significant, the TFA in its current form extends only to trade in physical goods and is insufficient for the features of the new economy, missing a large part of what increasingly matters to production models and economic development today. New and changing business models, structures of production, and policy aims reveal a new frontier for facilitation, necessary to catalyse and maximise benefits in the digital age. Simplified and harmonised procedures in key policy areas, namely, investment, services, and e-commerce are the next step in ensuring that the WTO effectively responds to 21st century economic and developmental imperatives, and reaffirm the relevance and centrality of the multilateral rules-based system.
Facilitation 2.0 is by nature a multidimensional challenge, involving unilateral structural reform, coherent trade policies, and multiparty initiatives at different international fora, including the WTO and regional trade agreements (RTAs). Through the existing proposals on e-commerce, investment facilitation, services facilitation, and domestic regulations in services, WTO members have begun to address some of the trade topics related to Facilitation 2.0.

Trade facilitation has also been a focus of rule-making at the regional level. The scope, depth and sophistication of trade facilitation provisions in RTAs has grown immensely since they first began to be regularly incorporated by the late 1990s, today sometimes surpassing the TFA in the detail and coverage of their commitments. The diffusion of trade facilitation aspects in RTAs requires a concerted effort to build coherence at the regional and multilateral levels to avoid overlapping agreements. This dialogue will look at how RTAs have addressed some of the elements of Facilitation 2.0. This investigation will allow negotiators and policymakers to identify best practices, share experiences, and eventually embed coherence-building mechanisms into the fabric of future WTO based trade talks.

 

The first half-day session will seek to introduce participants to the concept of Facilitation 2.0, by identifying its components and explaining how each one of them plays a crucial role in the new economy. The second day will seek to identify relevant provisions in the context of RTAs. The dialogue will present four studies on the trade-facilitating provisions under RTAs related to goods, investment, services, and e-commerce, and their connection with WTO covered agreements.


RTA

RTA

Dialogue Report and Background Materials



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