WTO: 2016 NEWS ITEMS

TRADE FACILITATION


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The chairman of the Preparatory Committee on Trade Facilitation (PCTF), Esteban Conejos, told the committee on 3 March that the WTO has now received 81 “Category A” notifications from members indicating which provisions of the TFA they will implement upon entry into force of the Agreement (or one year after entry into force for least developed countries — LDCs). 

“What is even more encouraging is that we also started receiving a growing number of B and C notifications,” the chairman said.  “This is especially important since we are getting closer to seeing the Trade Facilitation Agreement enter into force — which equally shortens the remaining time for submitting B and C-related inputs.”

Separately, representatives from donor countries, international organizations and private sector groups met with WTO members on 4 March to outline what support they have made available to help governments implement trade facilitation reforms and to report on their experiences to date in providing assistance.

Category B covers TFA commitments that a developing country or LDC member will implement after a transitional period following the entry into force of the Agreement, while Category C covers commitments that a developing country or LDC member will implement after a transitional period following the entry into force of the Agreement and that require technical assistance and capacity-building support to implement.

Notifications on Category B and C commitments are to be submitted by developing countries upon entry into force of the TFA, with LDCs given an additional year after entry into force to submit their notifications. 

To date, 70 WTO members have ratified the TFA, with 21 ratifications received since the PCTF's last meeting in mid-October 2015.  Two-thirds of the WTO's membership must ratify the TFA in order for the Agreement to enter into force.

 

Ratifications in the pipeline

Several members outlined their ratification efforts during the PCTF meeting.

Brazil told members that the TFA was now before its National Congress for approval and that it had taken preparatory steps to implement TFA provisions domestically.  El Salvador said its legislative assembly ratified the TFA on 4 February and that it hoped to deposit its instrument of acceptance with the WTO shortly.

Nepal noted that it submitted its Category A notification in October 2015 and that it was taking steps to secure ratification soon.  Nepal highlighted the importance of the TFA to landlocked countries but said it needed substantial technical and financial assistance to ensure implementation.

Pakistan, China and the European Union also spoke to underline their support for the TFA as well as the importance of the Agreement in reducing border costs and promoting trade.  They also encouraged members that have not done so to ratify the TFA and to submit their notifications.

 

Linking support with needs

Representatives from the United Kingdom, the EU, Canada, Sweden and Japan highlighted on 4 March the trade facilitation implementation support they were currently providing.   Sweden's WTO ambassador Daniel Blockert said there were lots of programmes in place and lots of funds available to assist developing countries and LDCs with implementation.  The challenge for potential recipients is to track down the programmes, he said, which underscored the importance of national focal points.

Bill Gain, Global Program Manager with the World Bank, noted that the Bank's support for trade facilitation-related projects increased from US$ 322 million in 2004 to US$ 7 billion in 2015.  Fifty countries have already requested assistance under the Bank's Trade Facilitation Support Program (TFSP), which assists developing countries in reforming and aligning their trade facilitation laws, procedures, processes and systems to enable implementation of the TFA.

Several speakers highlighted the importance of existing initiatives such as TradeMark East Africa, which has been credited with substantially reducing the costs and time for overland shipping in the region, as well as new initiatives such as the Global Alliance for Trade Facilitation, a public-private platform that seeks to use private sector expertise and resources to support trade facilitation reforms.

Emphasis was also placed on the role of the WTO's Trade Facilitation Agreement Facility (TFAF) to support the ultimate goal of full implementation of the Agreement by all members.  The Facility was formally launched on 22 July 2014 by WTO Director-General Roberto Azevêdo to help developing and LDC members assess their specific needs and to identify possible development partners to help them meet those needs.

 

Background

Concluded at the WTO's 2013 Bali Ministerial Conference, 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.

The Protocol of Amendment inserting the TFA into Annex 1A of the WTO Agreement was subsequently adopted by the General Council on 27 November 2014.  This in turn opened the door for members to formally ratify the TFA through their domestic legislative procedures.

The TFA broke new ground for developing and least-developed countries in the way it will be implemented. For the first time in WTO history, the requirement to implement the Agreement was directly linked to the capacity of the country to do so. In addition, the Agreement states that assistance and support should be provided to help them achieve that capacity.

The TFAF was also created at the request of developing countries and LDCs to help ensure that they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members.

The PCTF is responsible for ensuring the expeditious entry into force of the Agreement and to prepare for the efficient operation of the Agreement upon its entry into force.

Implementation of the WTO Trade Facilitation Agreement has the potential to increase global merchandise exports by up to US$ 1 trillion per annum, according to the WTO’s flagship World Trade Report released on 26 October 2015.  Significantly, the Report also found that developing countries will benefit significantly from the TFA, capturing more than half of the available gains.

The World Trade Report 2015 is available here.  More information on the WTO and trade facilitation is available at www.wto.org/tradefacilitation.

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