WTO Trade Facilitation Agreement nearing entry into force

12 December 2016

The process to bring the WTO’s Trade Facilitation Agreement (TFA) into force is entering the home stretch, with the Geneva-based organisation reporting that only eight more ratifications are needed to do so.

The two most recent ratifications – Gabon and Kyrgyzstan – were confirmed last week, coming fast on the heels of Dominica and Mongolia. Under WTO rules, two-thirds of the global trade body’s membership must ratify an accord in order for it to enter into force for those members.

To date, 102 of the WTO’s 164 members have ratified the TFA. The deal includes a series of provisions aimed at making customs and border procedures easier, thus speeding up the passage of goods between countries and lowering their costs.

These include commitments relating to publishing import, export, and transit procedures and forms online; allowing opportunities for comments on new laws and regulations that may affect the movement and clearance of goods; disciplines on fees and charges for customs processing; pre-arrival processing of goods; and various others

Overall, the Geneva-based organisation predicts that the TFA’s export gains could add up to US$750 billion to US$1 trillion annually. According to the global trade body, developing countries – particularly African and least developed countries – are expected to see the greatest reductions in costs due to the TFA.

The WTO’s Trade Facilitation Agreement was adopted in Bali, Indonesia, in December 2013 at the organisation’s Ninth Ministerial Conference. It then opened for ratification in November of the following year (See Bridges Daily Update, 7 December 2013).

Category notifications, donor support

Along with its potential to cut costs and speed up trade, the TFA is also notable among the WTO’s body of rules as having provisions that enable developing and least developed countries to notify which commitments they can implement right away, and which ones will require more time or support to implement.

According to a list provided by the WTO’s TFA Facility – a mechanism designed to help developing and least developed countries implement the new deal’s requirements – 90 WTO members have put forward their Category A notifications, which list those commitments which will enter into force as soon as the TFA comes online.

For the other two categories – those that require a transition period, known as “Category B” and those that will need both extra time and technical assistance – six notifications have been received.

To that end, various bilateral donors and regional/multilateral organisations have already been making preparations to provide the necessary support. WTO members having difficulty getting the help or information they need can also turn to the TFA Facility for additional assistance.

The facility is working to provide training materials, courses, regional workshops, and other support, according to a 2016 work plan.

Coming up

Once the Trade Facilitation Agreement enters into force, a series of institutional arrangements will also take effect. For example, the Preparatory Committee on Trade Facilitation – which has been shepherding the process of preparing for the deal to come online – will be replaced with a Committee on Trade Facilitation which will meet at least annually.

That new committee will aim to provide a forum for information sharing, along with collaborating with the World Customs Organization (WCO) and other relevant international bodies that could help support the TFA. It will also hold a review on the TFA’s “operation and implementation” four years after it takes effect, with subsequent reviews held regularly.

Meanwhile, WTO members will also need to have in place national committees on trade facilitation, or their equivalent, in order to help in the implementation process.

ICTSD reporting. This article first appeared in Bridges Weekly, 8 December 2016.

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