ADDITIONAL PROTOCOL 5 TO THE CEFTA 2006 AGREEMENT

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1 BOSNA I HERCEGOVINA MINISTARSTVO VANJSKE TRGOVINE I EKONOMSKIH ODNOSA БОСНА И ХЕРЦЕГОВИНА МИНИСТАРСТВО СПОЉНЕ ТРГОВИНЕ И ЕКОНОМСКИХ ОДНОСА BOSNIA AND HERZEGOVINA MINISTRY OF FOREIGN TRADE AND ECONOMIC RELATIONS ADDITIONAL PROTOCOL 5 TO THE CEFTA 2006 AGREEMENT Bosnia and Herzegovina 10 years of implementation CEFTA 2006, Sarajevo, 06. september godine

2 STRUCTURE WTO TFA CEFTA ADDITIONAL PROTOCOL 5 CHELLENGES IN IMPLEMENTATION CEFTA AP 5

3 WTO - TFA 10 y. negotioations Bali 2013 ( ) 92 WTO MS ratified TFA (od 164 MS) Last WTO MS ---??? Question! Senegal and Urugvaj ratified TFA ( ) Senegal 11th LDC Entering into force 2/3 MS (110???) 40 measures klasified as A, B, C

4 WTO TFA WITNESSING SUCCESS Top Outcomes Reduced Customs Clearance times Reduced other border agneny clearance times Reduced costs of Customs Clearance % ; % export increase Top Impacts Increased FDI Export Market Diversification Increased Domestic Inv Increase in consume welfare Increase in employment Winners: households and companies

5 WTO TFA IN ACTION! In one landlock African country only 43 % of truck transport time along its trade corridors is spent moving; the rest is time spent waiting at border crossing, road, blocks or resting. Uganda: Plastics manufacturer saves approximately USD 150 per day for 25 containers as a result of time savings from reducesed examination and inspection of goods and acceptance of pre-arrival import declaration, Cargo costs has come to zero from 10 mill USD. Costs of doing bussines are stable after becoming an AEO.

6 RESEARCHES, STUDIES, DATAS... EC DG TRADE WTO UNCTAD OECD ITC - WB

7 More documents, time, and cost in doing trade with CEFTA than EU CEFTA requires 3 documents and 3 days more than doing trade with the EU Trade with CEFTA costs 200 USD more than EU per container

8 Framework of horizontal interventions at Regional level Alignment of national procedures, operations and documents with the EU acquis, and other international conventions, standards and practices. Simplification Process of eliminating all unnecessary elements and duplications in formalities, processes and procedures Harmonisation Standardisation Process of developing internationally agreed formats for practices and procedures, documents and information.

9 Framework of vertical interventions at Regional level Before the border: Any type of controls, licensing, authorisation etc required before the border Border Controls and authorisations including all types of fiscal measures for licensing to access to market Behind-the-Border: All types of controls, and measures encountered in the market (behind the border) *Terminology of trade in goods applied with a certain reservation as regards to the specific terminology in services

10 General Principles of Trade Facilitation in CEFTA Built upon the EU Acquis (Acquis +) Private Sector Oriented Specific and Result Oriented No Region Specific Standards Public-private sector dialogue is to be strengthened Product Specific Measures All actions are to be in line with the Acquis Private Sector is to play advisory role Most Trade Distortive Barriers Additional legal instruments are to be created to utilise the Acquis for economic interest of the Region Attention of private sector to play a role of watchdog to the implementation of CEFTA Facilitate Access to Markets

11 Scope of Negotiations of FWA - AP5 CEFTA Ministerial Conclusions 2014: We declare that CEFTA Parties agree to launch negotiations with an aim to conclude a framework agreement between Customs Administrations of CEFTA Parties for simplification of inspections, exchange of data, and cooperation of trade partnership programmes by the end of 2015.

12 Scope of Negotiations of FWA - AP5 CEFTA Ministerial Conclusions 2014: Reemphasizing the importance of concluding negotiations of a framework agreement in the related fields of customs by the end of 2015, we declare that the scope of negotiations of the Framework Agreement will include Simplification of inspections related to all clearance procedures, and reducing formalities to the possible maximum extent, Determining the means and obligations of exchange of data between customs authorities to the extent that each national legislation allows. Recognising mutually national Authorised Economic Operators Programmes in each CEFTA Party provided that both legislation and implementation of each national programme is fully in line with the relevant EU acquis. Recognising EU Authorised Economic Operators by each CEFTA Party

13 Initial scope of the Framework Agreement Simplification of Border Inspections/Procedures (in all clearance stages) (Pre-arrival) Exchange of Data Regional Databases Mutual Recognition of AEO Recognition of EU AEOs Mutual Recognition of other programmes in the future (such as CABs)

14 Majority of WTO TFA directly addressed Transparency and Appeals Transit Publication/internet publication Enquiry Point for trade information Opportunity to comment Consultations Advance rulings Right of appeal Restrictions on fees and charges Use of guarantee Import/Export/Transit Fees & Formalities Disciplines on fees Pre-arrival processing Risk management Post clearance audit Publish average release times Authorized operators Border agency cooperation Review formalities and documents Single window Eliminate use of PSI for tariff classification and customs valuation. Separate release from clearance Customs cooperation

15 TECHNICAL CHALLENGES AHEAD Relatively weak risk based controls by Other Governmental Agencies, particularly SPS authorities Low level of cooperation and limited information exchange among technical agencies at the regional level, and between technical agencies and customs authorities at the national level High dependence on border controls while low level of cooperation on before-the-border measures (between technical agencies) and low use of post-clearance audits / market surveillance by all authorities Deciding the format of mutual recognition agreements to be signed between CEFTA Parties

16 INSTRUMENTS TO COPE WITH TECHNICAL CHALLENGES CEFTA Project Facility (I, II and III) (financed by the EU) EU Financial Assistance through Multi-beneficiary IPA II (SEED+, TF Project) Cooperation and Support from the Relevant International Organisations (WCO, WTO, UNCTAD, ITC, World Bank, IFC) Other Donors Financed Regional Technical Assistance Projects coordinated by CEFTA (SIDA-Quality Infrastructure Project, GIZ financed NTBs Project, USAID financed self-assessment of needs according to WTO TFA)

17 RISKS FACED DURING THE NEGOTATIONS National coordination between Customs, SPS, TBT and Transport Authorities Preparation of National Negotiation Positions by each CEFTA Party Dispersed Mandates in Ministries requires High Level Governance and Cooperation Relatively weak risk based controls by Other Governmental Agencies, particularly SPS authorities Limited Negotiation Capacity in Public Authorities

18 POLITICAL CHALLENGES AHEAD High level commitment and ownership should be in place CEFTA Parties should realise economic benefits of TF Prioritising the Acquis Alignment in accordance to Economic Policies of Countries / Region i.e. prioritise the accession in the relevant areas, which means stronger coordination with National IPAs Act in regional cooperation and solidarity Claiming the ownership of the process towards EU and third countries Strengthening capacity to support regional actions and absorb the financial/technical assistance effectively

19 THANK YOU FOR YOUR ATTENTION! ZADA MUMINOVIC Bosnia and Herzegovina Ministry of Foreign Trade and Economic Relations Musala 9, Sarajevo, Bosnia and Herzegovina tel: fax: zada.muminovic@mvteo.gov.ba