Trade Facilitation: A Conceptual Review

Abstract

With falling tariff levels, it is probably not surprising that the non-tariff area and trade facilitation, in particular, are receiving growing attention. Apart from the World Trade Organization (WTO), trade facilitation is a subject of substance within a wide range of international organizations including several United Nations (UN)-type bodies, the World Customs Organization (WCO) as well as those concerned with economic development, supply chain security, and sector-specific issues such as international transport and logistics. The resulting body of international trade facilitation instruments and initiatives, which include conventions as well as detailed technical recommendations, is extensive. This article provides a general review of key elements and topics that are associated with trade facilitation and sets them against underlying challenges and obstacles in practice as well as for research. While much of the current effort in trade facilitation begins with a top-down premise – whereby governments seek to implement international conventions and recommendations nationally – the author argues that trade facilitation is inherently an operations-focused topic and deserves to be approached from a bottom-up approach, too. Such approach not only provides a strong case for an interdisciplinary research agenda, it also brings into question whether current institutions concerned with trade facilitation have the necessary capabilities to apply themselves to the more operational aspects associated with international trade.

Customs and Humanitarian Logistics

“…Thus, there is a precedent that the humanitarian logistics community could follow. And, while trade facilitation tends to focus on the customs and trade procedures related frustrations (or friction) experienced in commercial supply chains (Grainger 2011), we argue that the customs touch-points in humanitarian logistics operations and their impact merits attention, too. This in turn can provide opportunities to explore how regulatory objectives for trade and border controls can also be aligned with the needs of the humanitarian logistics community.…”

“…Their control objectives, as outlined by Grainger (2011), concern: the collection of tax revenue (e.g. import duties); safety and security (e.g.…”

“…The border -be it the form of a land crossing, maritime port, or airport -is often the most convenient place at which governments and their executive agencies, like Customs, choose to exercise their powers. The list of potential trade and customs procedures is extensive -each with their own compliance requirements -and can often exceed sixty procedures (Grainger 2011).…”

“…The prevalence of reported concerns within the humanitarian space about the customs domain suggests that there is considerable scope for reform. The trade facilitation literature, as summarised by Grainger (2011), offers a broad catalogue of ideas (Figure 4). One prerequisite for exploring trade facilitation specific solutions within the humanitarian space is for experts, as well as the practitioner and academic communities, to come together.…”

“…Within the commercial context, where inefficient trade and customs procedures undermine business competitiveness, similar anger has not gone unnoticed. Trade Facilitation, which seeks to cut unnecessary red tape in international trade, is now a key feature within contemporary trade and customs policy (Grainger 2011). One of its flagship instruments, which was adopted in February 2017, is the WTO's Trade Facilitation Agreement from which the 163 member-states of the WTO expect to gain significant economic benefits (WTO 2015).…”