Bangladesh enters the era of paperless trade today as member countries of the World Trade Organisation (WTO) agreed to it to reduce hassles in cross-border trade and to expedite customs activities.
The paperless trade facilitation -- aimed at accelerating the implementation of digital trade facilitation measures for trade and development -- will reduce time and harassment in export and import of goods, especially in less developed countries as the bureaucratic red tape sometimes delays trade activities, increases trade costs and deteriorates the quality of goods.
As per requirement, a third of the members of the WTO ratified the Trade Facilitation Agreement (TFA) and it will come into effect from today, commerce ministry said in a statement yesterday.
Earlier, the WTO members concluded negotiations at the 2013 Bali Ministerial Conference on the landmark Trade Facilitation Agreement (TFA), which came into force on 22 February 2017 following its ratification by two-thirds of the WTO membership. The TFA is an outcome of the WTO's Doha Development Agenda (DDA).
The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area, according to WTO.
Estimates show that the full implementation of the TFA could reduce trade costs by an average of 14.3 percent and boost global trade by up to $1 trillion per year, with the biggest gains in the poorest countries.
The Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific will come into force from today.
At the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), in 2016, member States adopted the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific to accelerate trade digitalisation – the electronic exchange of trade-related data across borders.
More than 25 countries worked together to develop the treaty, which is now open for accession to all 53 members of ESCAP, the ministry statement also said.
The five countries that have ratified or acceded to the treaty -- Bangladesh, Azerbaijan, China, the Islamic Republic of Iran and the Philippines -- are all committed to regional cooperation in this critical area.
Armenia and Cambodia signed the treaty in 2017 while several other ESCAP members are in the process of completing their accession this year.
A study by UNESCAP finds that, if Bangladesh implements WTO TFA together with cross-border paperless trade measures, it could achieve trade cost reductions of 33 percent if it aims at basic compliance with the TFA.
This amounts to potential trade transaction cost savings of more than $0.7 billion per year. As Bangladesh prepares for the graduation from the Least Developed Country category, the Framework Agreement, with its technical assistance and cooperation arrangements, can assist Bangladesh to better prepare for graduation from Least Developed Country, compensating impact from losing preferential market access.
Through implementation of Cross-border Paperless Trade Agreement Bangladesh may make further stride in "Ease of Doing Business Index" and also can attract more Foreign Direct Investment (FDI).