WTO’s Trade Facilitation Agreement enters into force

THE ENTRY into force of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) came into effect on February 22, 2017. This milestone agreement represents the first multilateral deal concluded in the 21-year history of the WTO. The TFA marks a new phase of trade facilitation reforms globally and creates momentum for an increase in world trade and the multilateral trading system as a whole. Concluded at the 2013 Ministerial Conference of the WTO, held in Bali, Indonesia, the TFA largely addresses the facilitation of customs and borderrelated processes. The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues and provides for technical assistance and capacity building in the area

IMPLEMENTATION OF THE TFA

Developed-country members of the WTO are committed to implement the provisions of the TFA in its entirety. The agreement sets out a broad series of trade-facilitation reforms, comprising 12 core provisions which should be immediately implemented by all developed-country members upon its entry into force. The TFA prescribes many measures to improve transparency and predictability of international trade, creating a less discriminatory business environment. The TFA’s provisions include improvements to the availability and publication of information about crossborder procedures and practices, improved appeal rights for traders, reduced fees, and formalities connected with the import and export of goods, faster clearance procedures, and enhanced conditions for freedom of transit for goods. The agreement also contains measures for effective cooperation between customs and other authorities on trade facilitation and customs-compliance issues.

Developing countries, on the other hand, will immediately apply only the TFA provisions that they have designated as ‘Category A’ commitments. For the other provisions of the Agreement, they must indicate when these will be implemented and what capacity building support is needed to help them implement these provisions, known as Category B and C commitments. These can be implemented at a later date with least-developed countries (LDC) being given more time to notify these commitments.

The TFA is a significant multilateral agreement for developing and LDCs, in that it provides these members with the ability to establish their own implementation timetables for the agreement, based on their capacities to do so. For the first time in the history of the WTO, the requirement for implementation of an agreement was directly linked to the capacity of the particular member. The TFA was ground breaking for developing and LDC Members of the WTO, as implementation of its provisions was based on national capacity. Additionally, the TFA provides support for developing and LDC members in building their capacities, which is entrenched in the agreement. The Trade Facilitation Agreement Facility was created at the request of these members to guarantee that the assistance needed to fully implement the TFA is received and that each member is fully capable of exploiting the Agreement’s full benefits.

TFA CATEGORIES OF COMMITMENTS

Under the TFA, developing and LDC members are to notify the WTO of which provisions they will implement upon entry into force. Such provisions do not have a transition period, and are called ‘Category A’ notifications. Category A notifications are determined based on self-designation and become binding on members upon the agreement’s entry into force.

Category B notifications are those provisions that will be implemented after a transitional period has passed, following the agreement’s entry into force. The principle of self-select is used to determine the implementation date for Category B provisions which would then become binding upon the member. These are typically provisions which the member only requires time to be able to implement.

Category C notifications are those provisions that will be implemented upon the acquisition of capacity through technical and financial assistance, and will also require a transitional period following the agreement’s entry into force. Implementation of Category C provisions is not required if capacity is lacking. A pre-notification process to guarantee the binding commitment from donors is required, which creates additional time for developing and LDC Members to ensure that the commitment for assistance would be obtained, prior to notifying their definitive implementation dates.

IMPLEMENTING THE TFA IN JAMAICA

The process towards full implementation of the TFA is already under way in Jamaica and is supported by its national Trade Facilitation Task Force, as stipulated by the Agreement. Category A notifications became immediately binding upon entry into force of the TFA, and should not present significant challenges for Jamaica, as these provisions are largely being practised. Jamaica is positioned to increase its capacity in a number of key areas that will enhance trade facilitation and allow for greater efficiency in its customs operations. Through commitments by developed countries and donor institutions, Jamaica should be able to fulfil its TFA obligations, and has notified its categories B and C commitments as capacities allow.