2018 – part1 – 1 – 4

Trade Facilitation Agreement marks first anniversary since entry into force

The Trade Facilitation Agreement (TFA) marked its first anniversary since its entry into force on 22 February 2017 with WTO members making significant strides towards its implementation. WTO Director-General Roberto Azevêdo said members continue to work to fully implement the Agreement, which will benefit particularly developing and least developed countries.

Negotiations for the TFA, the first multilateral deal concluded in the 23-year history of the WTO, were concluded at the 9th Ministerial Conference in Bali in 2013. The Agreement entered into force last year when the WTO obtained the two-thirds acceptance of the Agreement from its 164 members. One hundred and thirty-one or 80 per cent of WTO members have now ratified the Agreement. Namibia is the most recent, having submitted its instrument of acceptance on 9 February.

Full implementation of the Agreement, which seeks to expedite the movement, release and clearance of goods across borders, is forecast to slash members’ trade costs by an average of 14.3 per cent, with developing and least-developed countries having the most to gain, according to a 2015 study carried out by WTO economists. The TFA is also likely to reduce the time needed to import goods by over a day and a half and to export goods by almost two days, representing a reduction of 47 per cent and 91 per cent respectively over the current average.

“The TFA is one of the biggest trade reforms in a generation. By dramatically reducing trade costs, it will really bring great benefits for all WTO members, especially developing countries,” DG Azevêdo said on the occasion of the Agreement’s first year anniversary since its entry into force. “We’re working hard to implement the Agreement in full and deliver those benefits,” he said.

The Agreement is unique in that it allows developing and least-developed countries to set their own timetables for implementing the TFA depending on their capacities to do so. Developed countries committed to immediately implement the Agreement when it entered into force.

Developing countries will immediately apply the TFA provisions 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 given more time to notify these commitments.

According to the TFA Database, as of 23 February, 107 members have notified their Category A commitments, 49 their Category B commitments and 39 their Category C commitments. The implementation dashboard estimates that the TFA implementation rate for the entire WTO membership stands at 58.7 per cent today based on members’ notifications. Broken down, that equates to a 100 per cent implementation rate by developed members, 56.4 per cent among developing members and 1.7 per cent among least developed countries.

A Trade Facilitation Agreement Facility (TFAF) was created at the request of developing and least-developed countries to help ensure they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members. Further information on TFAF is available at www.TFAFacility.org.

Source: wto.org