The Trade Facilitation Agreement (TFA) annexed to the Protocol of Amendment to the Marrakesh Agreement establishing the World Trade Organization (WTO) had been agreed at the ninth Ministerial Conference of the WTO members which took place in December 2013 in Bali, Indonesia. The Agreement had entered into force on 22 February 2017 after two-thirds of the WTO membership completed their domestic ratification process. However, we know that though the negotiations on trade facilitation had been concluded at the 2013 Bali Ministerial Conference, the negotiations had started earlier and continued for years. TFA had entered into force on 22 February 2017 and it has today 152 Contracting Parties (in 01 July, 2020).
According to the 2015 estimates of economic benefits of the TFA by analysts of the WTO and the Organization for Economic Cooperation and Development, it is expected that foreign trade costs for landlocked developing countries would decrease by 13.2-15.5 per cent, and by 2030 the world economic growth would increase by 2.7 per cent per year and the GDP per capita would increase by 0.5 per cent a year.
The main principles for trade facilitation are ‘simplification, harmonization, standardization and transparency’. They cover data standardization, publicity, cooperation, data interchange, risk management and multiple trade facilitation stakeholders. In particular, WCO, WTO, UNCTAD, European Union, banks and other financial institutions (International Monetary Fund, World Bank, Regional Development Banks, including ADB) and many other regional cooperation agencies and economic and social institutions, etc. pay special attention to trade facilitation. What is most important for international supply chain security is an infrastructure. The developing countries cannot be actively involved in international trade because of their low developed infrastructure and high transportation costs. The TFA has special and differential treatment provisions for developing country members and least-developed country members in its Section II. Meantime, the Working Group had attempted to harmonize and not to duplicate technical assistance and support provided by international organizations or donor countries and the specific projects and programs.
The trade facilitation agreement consists of three sections and 24 articles.
Structure of Trade Facilitation Agreement
Source: (WTO, 2020) https://www.wto.org/english/tratop_e/tradfa_e/tradfatheagreement_e.htm
Structure of Trade Facilitation Agreement (By Article)
As regards the TFA, its provisions are grouped under categories of A, B and C depending on level of economic development of a specific country.
The TFA has special and differential treatment provisions for developing country members and least-developed country members in its Section II. Meantime, the Working Group had attempted to harmonize and not to duplicate technical assistance and support provided by international organizations or donor countries and the specific projects and programs.
The technical provisions of the TFA in particular, Section I (Articles 1 to 12) are substantially Customs-related, with 98% of the provisions to be implemented fully or partially by Customs as illustrated in Figure 3, placing them at the center of national implementation efforts. Only 2% of the provisions of Section I do not fall under the direct responsibility of Customs, i.e. one provision, namely Article 1.4 (WCO, 2016).
The WTO TFA: The Customs Involvement
If we look at different border control agencies of countries around the world, mostly Customs, border protection, immigration and specialized inspection play main roles. Compared with other border control agencies, the Customs is more concerned with international supply chain security, trade facilitation in partnership with other public and private sector stakeholders and foreign Customs services, promotion of manufacturers internal controls, pre-arrival shipment information, introduction of national single window, integrated border management, data interchange with neighboring countries and implementation of joint controls and many other initiatives. Trade facilitation becomes a part of many strategic development initiatives and is more closely linked with broader government policy issues and objectives.
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