WTO Members Eye Preparations for Enacting Trade Facilitation Deal

16 June 2016

WTO members are preparing to put in place the first new global trade deal in decades – the Trade Facilitation Agreement (TFA) – given that three-quarters of the ratifications needed for entry into force have now been submitted to the Geneva-based organisation.

The multilateral accord was adopted over two years ago at the WTO’s Ninth Ministerial Conference in Bali, Indonesia, marking the first new global trade pact since the organisation was founded in 1995. (See Bridges Daily Update, 7 December 2013)

In late 2014, the pact then opened up for ratification, though it no longer had a set deadline for doing so. Despite a push by some trade officials for reaching the necessary threshold – two-thirds of the WTO’s 162 members – in time for last December’s Tenth Ministerial Conference in Nairobi, Kenya, the process remains ongoing. (See Bridges Daily Update 1, 14 December 2015)

Meanwhile, various political leaders have called in recent months for implementing the TFA this year, arguing that it could yield significant gains for economic and trade growth, especially given the otherwise sluggish global recovery. (See Bridges Weekly, 9 June 2016)

Notifications in focus

At a meeting last week of the WTO’s Preparatory Committee on Trade Facilitation, which is tasked with shepherding the trade deal through these final stages before entry into force, sources say that discussions largely focused on domestic ratification processes, along with the need for more developing country members to indicate which provisions of the TFA would require extra time or additional support to implement.

At press time on Thursday, the number of WTO members who have submitted their “instruments of acceptance” for the Trade Facilitation Agreement was at 81. Sources familiar with last week’s preparatory committee meeting confirmed that Mexico and Peru are both close to submitting their own “instruments,” while Nigeria also hopes to do so in the short-term.

Along with TFA ratification itself, another key component of its implementation is the notification of the different “Category” commitments. Under the terms of the trade deal, developing and least developed countries can designate which provisions will be in place by the time TFA enters into force, classified under Category A.

These countries can also notify provisions under Category B, which are those that will be implemented following a transition period, or under Category C, which will require both a transition period and support through technical assistance or capacity-building.

Ambassador Esteban Conejos of the Philippines, who chairs the committee, reportedly noted that while various Category A notifications have come in – currently numbering 87 – only five have been submitted for the other two categories.

National trade facilitation committees

As the ratification process continues, other efforts are underway to help prepare for the TFA’s entry into force, including attempts at better understanding how the different elements of the deal can work in practice and what help is needed.

Under the TFA’s terms, all WTO members must “establish and/or maintain a national committee on trade facilitation or designate an existing mechanism to facilitate both domestic coordination and implementation of the provisions of this Agreement” – a requirement that has since prompted several questions and was the subject of an experience-sharing session held at the WTO on 8 June.

Preliminary data of a voluntary, online survey conducted by the WTO secretariat indicated that the main challenges many members have seen so far is in getting the right membership in such panels, as well as coordination, lack of resources and/or political support, and lack of awareness on the subject.

“We have been registering a significant amount of attention on the issue of national TF committees – and demand for related guidance – for a considerable amount of time,” said Conejos during the session, highlighting the various questions raised on how to implement this component of the trade deal.

“Article 23.2 seems to give rise to misinterpretations – and, as a result, inaccurate expectations and unfounded concerns,” he said, according to a copy of his prepared remarks. “Today, we have an opportunity to discuss the actual obligations arising from the Agreement and the best ways of complying with them.”

Along with discussing how the private sector could support such efforts, participants reportedly raised how to improve coordination at the governmental level, along with the institutional setup and priorities for these committees, with the meeting overall reportedly well-received by many members.

ICTSD reporting.

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