	Introduction

The Trade Facilitation Agreement (TFA), finalized in December 2013, is the newest international trade agreement to enter into force at the World Trade Organization (WTO), after two-thirds of WTO member countries ratified the multilateral agreement as of February 22, 2017. The TFA is important to Congress because it may affect U.S. trade flows, the U.S. economy, and international capacity building efforts. This report discusses the TFA, its background and current status, potential impact on U.S. trade agreement provisions, plans for implementation, and relevant policy options for Congress to consider. While the TFA mandatory provisions are subject to WTO Dispute Settlement for enforcement, the agreement contains the Special and Differential Treatment provisions to provide additional implementation time and technical assistance and capacity building assistance for developing and least-developed countries. Core Provisions

The TFA has three sections. The first section is the heart of the agreement, containing the provisions—of which many, but not all, are binding and enforceable. The second section provides for special and differential treatment for developing country members and least-developed country (LDC) members, allowing them more time and assistance to implement the agreement. The third section of the agreement contains the institutional arrangements for administering the TFA. To that end, the TFA aims to address multiple trade barriers U.S. exporters confront. These include the lack of transparency on process and documentation requirements for exporting to a given country, which could also create opportunities for corruption. Similarly, the Organization for Economic Co-operation and Development (OECD) finds that TFA implementation could lower trade costs 12.5%-17.5% globally. According to WTO estimates, export gains from full implementation of the TFA could range from $750 billion to over $3.6 trillion dollars per year. Trade Facilitation in U.S. FTAs

Existing and proposed U.S. free trade agreements (FTAs) include trade facilitation commitments. The WTO TFA and U.S. FTAs share common features. In general, the TPP included more precise and enforceable terms than the TFA. In rankings of trade facilitation measures such as those outlined in the TFA, the United States scores relatively high in terms of availability of customs information, advance rulings, appeal procedures, documentation, automation, and other factors. U.S. Trade Priorities

In the United States, as in all countries, there is an inherent tension between efforts to promote efficient trade flows and trade enforcement (including consumer protection and duty collection). Several instruments used by CBP seek to balance these overarching objectives, and are aimed at knowing who is importing and what types of goods are being imported. Different sets of indicators by various international organizations exist to measure levels of trade facilitation and could be used to monitor TFA implementation and impact (see Text Box). To help alleviate their concerns, and promote implementation, the TFA is the first WTO agreement in which members determine their own implementation schedules and in which progress in implementation is explicitly linked to technical and financial capacity. Through the APEC Committee on Trade and Investment, the United States works with its partners to promote trade facilitation and provide capacity building. The TFA requires that donor members, including the United States, provide the needed support to developing and LDC members.
The Trade Facilitation Agreement (TFA), finalized in December 2013, is the newest international trade agreement in the World Trade Organization (WTO), having entered into force on February 22, 2017, when two-thirds of WTO members, including the United States, ratified the multilateral agreement. Congress has an interest in the TFA since it may affect U.S. trade flows, the U.S. economy, and international capacity building efforts.
Trade facilitation measures aim to simplify and streamline international trade procedures to allow the easier flow of trade across borders and thereby reduce the costs of trade. There is no precise definition of trade facilitation, even in the WTO agreements. Trade facilitation can be defined narrowly as improving administrative procedures at the border or more broadly to also encompass behind-the-border measures and regulations.
The TFA aims to address multiple trade barriers confronted by exporters and importers, whether small and medium-sized enterprises engaged in e-commerce or large multinational firms managing complex global supply chains. These barriers include the lack of transparency on process and documentation requirements for exporting to a given country.
According to WTO estimates, global export gains from full implementation of the TFA could range from $750 billion to more than $3.6 trillion dollars per year. The Organization for Economic Co-operation and Development (OECD) finds that TFA implementation could lower trade costs as much as 12.5%-17.5% globally. Different sets of indicators and indices by various international organizations exist to measure levels of trade facilitation and could be used to monitor TFA effects.
The TFA has three sections. The first section is the heart of the agreement, containing the provisions, of which many, but not all, are binding and enforceable. The second section provides for special and differential treatment for developing country members and least-developed country members, allowing them more time and assistance to implement the agreement. The TFA is the first WTO agreement in which members determine their own implementation schedules and in which progress in implementation is explicitly linked to technical and financial capacity. The TFA requires that "donor members," including the United States, provide the needed capacity building and support to developing and least-developed members. Finally, the third section of the agreement contains the institutional arrangements for administering the TFA.
Existing and proposed U.S. free trade agreements (FTAs) include trade facilitation commitments. While the WTO TFA and U.S. FTAs share common features, there are also differences. U.S. FTAs generally include more enforceable provisions and specific time frames, and do not include special and differential treatment for developing country participants.
U.S. implementation of the TFA does not require changes from current processes, including planned efforts to update U.S. systems. In the United States, the U.S. Customs and Border Protection (CBP) seeks to balance its overarching objectives of promoting efficient trade flows with enforcing trade laws designed to protect consumers from dangerous and unlawful imports, and collecting customs duties. The CBP uses several instruments to collect information aimed at knowing who is importing and what types of goods are being imported, including the Customs-Trade Partnership against Terrorism (C-TPAT), the Automated Commercial Environment (ACE), and the International Trade Data System (ITDS).
This report provides an overview of the TFA, its provisions, and the United States' implementation and role in capacity building, and provides options for Congress to consider in relation to the TFA.