Singapore Endorses WTO’s Agreement on Trade Facilitation

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SINGAPORE – Singapore has announced that it will implement all operational provisions of the World Trade Organization’s (WTO) Agreement on Trade Facilitation (ATF) as soon as the agreement becomes active next year.

The ATF endeavors to simplify the bureaucratic regulations involved in cross-border trade by streamlining the customs and border procedures of WTO member states. With the creation of the ATF, the WTO has clarified and improved articles V, VIII, and X of the General Agreement on Tariffs and Trade (GATT).

According to estimates by the Organisation for Economic Co-operation and Development (OECD), businesses will see trade costs decrease by 10 to 15 percent when the ATF becomes active.The WTO also expects the administrative costs to exporters for moving goods across borders to decrease by up to 50 percent.

The ATF could also inject more than US$1 trillion into the global economy, according to the Peterson Institute for International Economics.It is expected that gains would amount to approximately US$450 billion in Asia alone.

After more than nine years of negotiations, the 160 members of the WTO finally reached consensus on the ATF at the WTO’s 9th Ministerial Conference in Bali in December 2013. The exact date that the ATF will become active is unknown as it will not be implemented until at least two-thirds of WTO members have ratified the agreements.This is expected to be by July 31, 2015.

The agreement is made up of two sections, the first of which contains provisions for simplifying the movement, release and clearance of goods. Obligations include ensuring the publication and availability of customs information, providing traders with appeal and review procedures, ensuring procedures for the release and clearance of goods and issuing traders with advance rulings on their goods.

The second section outlines the differential treatment regarding the implementation of ATF obligations offered to countries depending on their level of economic development. Developing countries have some flexibility over which provisions they will implement immediately once the pact comes into force. It is expected that these countries will notify the WTO of the relevant provisions, also known as ‘Category A commitments,’ by July 31, 2014. Developed countries will implement all ATF provisions as soon as the agreement becomes active.

The ultimate aim of the ATF is to expedite greater economic integration and growth.Successful economic integration depends not only on the reduction of tariff and non-tariff barriers, but also, and according to several analysts, more so, on trade facilitation measures such as improved infrastructure and telecommunications, improved security and efficient border administration.

The wide-ranging economic benefits of such trade facilitation measures include enticing foreign investment, advancing domestic development and supporting business supply chains. Businesses can also save a significant amount of time and money.

For example, IBM has estimated that Singapore’s national single window, which allows companies operating in Singapore to submit documents fulfilling all import, export and transit-related regulatory requirements to a single entry point, saves companies up to US$1 billion per year.By improving the efficiency and transparency of customs procedures, the ATF will be able to make significant progress relatively quickly and cheaply.

Facilitating greater economic integration is a goal which is especially important to ASEAN countries in the lead-up to the ASEAN Economic Community (AEC) coming into effect on December 31, 2015. The AEC, which is one of the three pillars of the ASEAN Community, aims to establish a single market and production base, a highly competitive economic region, a region of equitable economic development and a region fully integrated into the global economy.

Earlier this year, the World Economic Forum published the fifth edition of its Global Enabling Trade Report (GETR), which ranks 138 economies in terms of their ability to enable trade. The ASEAN countries’ rankings varied widely – the list was topped by Singapore, followed by Malaysia in 25th place, Thailand (57th), Indonesia (58th), Philippines (64th), Vietnam (72nd), Cambodia (93rd), Laos (98th) and Myanmar (121st). Brunei was not included in the report.

Singapore’s top ranking reflected its status as a global trade hub, but other ASEAN countries did not do as well due to suffering, to various degrees, from issues such as weak connectivity, poor transport infrastructure and logistics, corruption and complex bureaucratic regulations.At a time when there are increasing concerns that the AEC deadline may not be met, the ATF has hopefully created momentum to tackle some of these problems.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

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