Time to operationalise the Trade Facilitation Agreement (TFA) is approaching near. So far, 83 members of the World Trade Organisation (WTO) have ratified the agreement. The agreement will enter into force once two-thirds of the WTO members complete their domestic ratification. Currently, the global body has162 members and it requires ratification of 109 members. Thus, 75 per cent of the required ratification has been done.
Against this backdrop, Preparatory Committee on Trade Facilitation (PCTF) at a meeting in the second week of this month reviewed the overall progress of TFA implementation. In the meeting, held in Geneva, committee chairman requested all the members to submit their commitments to comply with TFA obligations.
TFA is the first-ever agreement of the WTO in its 21 years of existence. It was formally adopted in the ninth ministerial conference of the organisation in 2013. Â
AN OVERVIEW: Trade facilitation means simplification and harmonisation of export, import and transit procedures including paperless trade or the exchange of data and trade documents electronically to support the process of trade transactions. Trade procedures cover activities, practices and formalities included in collecting, preparing, communicating and processing data required for the movement of goods in international trade. More trade means more goods crossing borders and the smooth compliance of customs formalities. The ultimate goal is to reduce the trade cost by curbing the time-consuming red tape that still exists across the borders.
The Joint United Nations Regional Commission (JUNR) in its survey report on trade facilitation and paperless trade provides a broader picture of the matter. The survey report, published in 2015, pointed out three general trade facilitation (TF) measures. These are: transparency (i.e. publication of current export-import regulations online), formalities (i.e. pre-arrival processing) and institutional arrangement and cooperation (i.e. a national overseeing committee). Moreover, three specific measures are also mentioned in the report. These are: paperless trading (i.e. electronic single window system), cross-border paperless trade (i.e. certificate of origin electronically exchanged between trading partners) and transit facilitation (i.e. transit agreement with neighbours).
So, trade facilitation is a set of comprehensive measures to reduce trade cost among countries as well as within the countries. The formal agreement binds the WTO members to follow respective rules and regulations in order to enhance trade across the world with lower cost. The most pronounced benefit of the agreement is that by implementing the TFA, global economy will generate an additional $1trillion annually due to huge cost savings.
AGREEMENT OBLIGATION: The agreement has three categories of commitments members have to comply with. Category 'A' asks the members to implement their committed TF measures immediately after the agreement comes into force. Least Developed Countries (LDCs) will get maximum additional time of one year for implementation. Category 'B' allows members to implement their commitments after a transitional period following the enforcement of the TFA. Category 'C' provides members the opportunity to seek technical assistance for implementing several measures committed by them.
Moreover, the special and differential (S&D) provisions for the LDCs and developing countries are allowed to determine when they will implement individual provisions of the TFA and to identify provisions that they will only be able to implement upon the receipt of technical assistance and support for capacity building. LDCs are also subject to waiver for six to eight years from any dispute settlement mechanism. The TFA has outlined 38 measures (see Table1) that members have to adopt and implement.
BANGLADESH PERSPECTIVE: Bangladesh is aware of the benefit of the trade facilitation. That's why, finance minister AMA Muhith in his budget speech on June 03, 2016, said: "As a Member of World Trade Organiiation (WTO), Bangladesh has signed Trade Facilitation Agreement (TFA). NBR (National Board of Revenue) has been working to implement TFA with some support from the World Bank, ADB and USAID. Once fully implemented, TFA will reduce both costs and time of import-export businesses. The modernisation programmes of Customs Department have been continued to achieve the goals."
As a part of implementing the agreement, the country has also decided to ratify the TFA. The decision has already been taken in the Cabinet. Soon it will be sent to the WTO secretariat.
One good thing is that Bangladesh has already taken a lot of initiatives to make the TFA operational. A national committee was formed two years back and it will be formalised soon. The latest WTO survey, where so far 83 members participated, finds that only 55 per cent of them established respective national committees while 23 per cent finalised the plan. Article 23 of the agreement requires all members to establish a national committee. It said: "Each Member shall 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." Thus, Bangladesh has made some progress in this regard. A national trade portal has also been launched.  Â
It is mentionable that two international agencies are extensively supporting the country to prepare for the TFA implementation. One is the World Bank and other is the United States Agency for International Development (USAID). Last year, the World Bank prepared a detailed analysis of the country's alignment to the WTO TFA. It found that 22 per cent of existing acts, rules and procedures on customs, port logistic, trade information and administration are fully non-compliant with TFA measures. Thus, rest 78 per cent of these are partially, substantially and fully compliant. It means some legislative changes with infrastructure improvement can lead to full compliance.
asjadulk@gmail.com