The first-ever global TFA of the WTO is a promise of growth. Only time will tell.
WTO and TFA
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The World Trade Organisation came into being on 01-January, 1995. It has gone through a long and difficult journey of several rounds of trade talks, and in Feb. 2017, the first-ever global Trade Facilitation Agreement (TFA) was ratified by 2/3 of the 164 member nations. India had ratified it on 22 April 2016, and China on 04 September 2015. The World Trade Organization (WTO) (HQ : Geneva, Switzerland) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible i.e. promotion of multilateral trade through reduction of barriers. View the key data, in an image, here
Hence, reducing tariffs is the first
objective, but bureaucratic delays and
“red tape” are other big barriers for moving goods across borders for
traders. Trade facilitation refers to the simplification, modernization and
harmonization of export and import processes. WTO members concluded
negotiations at the 2013 Bali
Ministerial Conference on TFA, which entered into force on 22 February 2017
following its ratification by two-thirds of the WTO membership. Traders from both developing and developed
countries have faced vast amounts of “red
tape” that exists in moving goods across borders. Documentation
requirements often lack transparency
and are vastly duplicated, a problem
compounded by a lack of cooperation
between traders and official agencies. Despite IT tools, automatic data
submission not commonplace. View what OECD thinks of WTO TFA, in an image, here
The
TFA contains provisions for (a) expediting the movement, release and clearance of goods, including
goods in transit, (b) setting out
measures for effective cooperation between customs and other appropriate
authorities on trade facilitation and customs compliance issues, (c) provisions for technical assistance
and capacity building. The full implementation
of the TFA can reduce trade costs by an average of 14.3% and boost global trade
by up to $1 trillion per year, with the biggest gains in the poorest
countries. For the first time in WTO history, the requirement to implement the
Agreement is directly linked to the capacity of the country to do so. A Trade
Facilitation Agreement Facility (TFAF) has been created to help ensure
developing and least-developed countries obtain the assistance needed to reap
the full benefits of the TFA. The United
Nations Conference on Trade and Development (UNCTAD) estimated that an
average customs transaction involves 20–30 different parties, 40 documents, 200
data elements (30 of which are repeated at least 30 times) and the re-keying of
60–70 per cent of all data at least once. With the lowering of tariffs across
the globe, the cost of complying with customs formalities has exceeded the cost
of duties to be paid! You can download all relevant reports on WTO from the Bodhi Resources Page.
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- India's proposal on Services Trade facilitation to WTO
- India wants a much-smoother services trade regime. India's stand - a formal proposal for an agreement on trade facilitation in services - has been submitted by India. The Committee on Trade in Services of the WTO has to take it up. India has proposed measures including clarity in work permits and visas, simplification in rules of temporary stay, rationalisation of taxes, fees and charges and sorting out social security contribution issues for short-term workers, among others. Ideally, India wants negotiations on this paper in the WTO MC at Buenos Aires, December 2017, but US and Canada have issues with some aspects.
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