The post-Bali trade talks suffered a major setback in the absence of consensus over one of the key trade deals drafted at the Bali Ministerial Conference in December 2013. This came as a shock following the conclusion of the negotiations at Bali that saw the Bali Package as potentially capable of resuming the stalled Doha talks.
The setback was caused by the row over the trade facilitation agreement. It was one of the ten ministerial decisions taken in Bali. It provided to simplify and modernise customs procedures, and make them more transparent, thereby reducing transaction costs. The draft agreement also envisages technical assistance to support developing countries and the least developed countries (LDCs) to implement these reforms, and therefore help them integrate better into global trade. It may be recalled that the draft of the trade facilitation agreement (TFA) meant to streamline, standardise and ease global customs procedures, was scheduled to be finalised within the deadline of July 31, 2014.
The TFA is believed to have broken new ground for developing economies and LDCs in the way it is planned to be implemented. Implementation of the agreement is directly linked to the capacity of the countries to do so. In addition, the agreement states that assistance and support should be provided to help them achieve that capacity.
But rift between members, particularly over demands from India for early materialising of decision on stockpiling of food, had threatened to scuttle the long-sought deal. India refused to ratify the deal, as it was unhappy with other trade negotiations over both food stocks and farm subsidies. It sparked criticism from the European Union (EU) and a group of 25 developed and emerging countries. The US warned that the blockage could threaten wider future talks on Doha Round. India had insisted that, in exchange for signing the trade facilitation agreement, it must see more progress on a parallel pact giving it more freedom to subsidise and stockpile food grains than is allowed by WTO rules.
The activities going on at the WTO indicate that the situation has now changed paving the way for gradual implementation of the TFA. One hopes that despite the complex nature of the work, members of the WTO -- developed, developing and the least developed -- would find a more or less common ground to count on the implementation of the TFA.
Following the conclusion of trade facilitation negotiations at the Bali conference, a committee named Preparatory Committee on Trade Facilitation was created to facilitate works towards implementation of the TFA. The Preparatory Committee undertook a legal review of the TFA and drew up an amendment protocol to insert the TFA into the WTO legal framework. The amendment protocol was adopted by WTO members at a General Council meeting in November last year, paving the way for the entry into force of the agreement.
One of the important steps taken in this regard is the setting up of Trade Facilitation Agreement Facility (TFAF) to help developing and least-developed members implement the TFA. The TFAF was created at the request of developing and LDC members to help ensure that they receive the assistance needed to reap full benefits of the TFA and to support the ultimate goal of full implementation of the agreement by all members. TFAF aims to support developing countries and the LDCs by:
n helping them to assess their capacity to implement the TFA and the need for assistance to implement particular provisions of the Agreement;
n maintaining an information-sharing platform to assist with the identification of possible donors;
n providing guidance on the implementation of the TFA through the development or collection of case studies and training materials;
n undertaking donor and recipient match-making activities and
n providing project preparation grants and project implementation grants related to the implementation of TFA provisions. These grants are limited to "soft infrastructure" projects, such as modernisation of customs laws through consulting services, in-country workshops, or training of officials.
The TFAF complements efforts by regional and multilateral agencies, bilateral donors and other stakeholders to provide trade facilitation-related technical assistance and capacity-building support. Several major international organisations -- the International Trade Centre, the Organisation for Economic Co-operation and Development, the United Nations Conference on Trade and Development, the United Nations Economic Commission for Europe, the World Bank Group, and the World Customs Organisation -- have pledged to assist WTO members in implementing their commitments under the TFA.
The WTO member-countries have begun reviewing the latest development regarding the TFAF. Contributions to the fund are pouring in, most recently from Austria, Norway, Australia and the United Kingdom. To benefit from the TFAF, developing and LDC members are to notify the WTO which provisions they will implement when the agreement enters into force, or, in the case of the LDCs, within one year after entry into force (Category A commitments); which provisions they will implement after a transitional period following the entry into force of the Agreement (Category B); and which provisions they will implement on a date after a transitional period following the entry into force of the agreement that would require acquisition of assistance and support for capacity building (Category C).
Sixty-six developing country- and least-developed country-members have now submitted notifications to the WTO outlining which provisions of the TFA they intend to implement upon entry into force of the pact. Meanwhile, as the member countries have already been engaged in ratifying the agreement, the stage now seems set for increasing number of members to complete their formal acceptance through domestic ratifications. The TFA will enter into force only when two-thirds of the WTO membership (108 members) have formally accepted the agreement. Observers are of the view that progress now depends a good deal on how efficiently and quickly the objectives of the TFAF are translated into capacity building of the developing economies and the least developed countries.
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