The WTO Trade Facilitation Agreement Paul Fekete Senior International Trade Advisor U.S. Agency for International Development (USAID) May 21, 2015 Borderless Alliance Palm Club Hotel Abidjan, Cote d Ivoire
Time is money! 1 day clearance delay = 1 % tariff Time to export (days) Documents to import (number) Time to import (days) Singapore (Ranked#1) 6 3 4 Cote d Ivoire 25 13 32 Mali 26 11 34 Ghana 19 7 41 Liberia 15 12 29 Nigeria 22.9 13 33.9 Togo 24 7 29 Source: World Bank, Doing Business 2014
What is Trade Facilitation? The plumbing of international trade. Main goal is to reduce transaction costs of international trade while maintaining efficient and effective control.
Scope of Trade Facilitation Customs Standards and regulations (SPS/TBT) Trade procedures and documentation Transit issues Shipping/Logistics Transport security IT and e-commerce Trade finance Infrastructure 4
Trade Facilitation at the WTO In the WTO context, refers to Articles V, VIII and X of the General Agreement on Tariffs and Trade (GATT) which deal with freedom of transit for goods, fees and formalities connected with importing and exporting, and the publication and administration of trade regulations (transparency). Objectives: Expedite movement, release & clearance of goods Improve cooperation between customs/other authorities Enhance technical assistance and build capacity
Trade Facilitation Trade Facilitation Infrastructure Export promotion Shipping/logistics Transport security IT and e-commerce Trade finance WTO Trade Facilitation Agreement Articles I specific commitments. Article II Special and Differential Treatment (TCB Provisions) Article III Institutional Arrangements
Regional Integration in West Africa Economic Community of West African States (ECOWAS) Union Economique et Monétaire Ouest-Africaine Le Comité Permanent Inter-Etats de Lutte contre la Sécheresse dans le Sahel (CILSS)
Why new rules and why TF at the WTO Follows the growing dismantling of traditional barriers to trade... Increased attention on the elimination of remaining (non-tariff) obstacles to trade Binding commitments from trading partners (160 Member countries) Enforcement through dispute settlement Apply to all border agencies
WTO TFA and Regional Integration TFA required for WTO Members There is an alignment of provisions between TFA and efforts underway with ECOWAS, EAC, etc. Alignment among larger group of countries gives protection to business more attractive for investment. Market Potential- part of trade agreement that will grow Cost effective- governments can be more efficient with one set of rules. Implementation support will be available.
Trade Facilitation WTO Trade Facilitation Agreement Regional Trade Integration UEMOA ECOWAS SADC COMESA Tripartite CFTA Articles I specific commitments Article II Special and Differential Treatment (TCB Provisions) Article III Institutional Arrangements
Trade Facilitation Agreement Section I: 12 articles of technical measures Section II: Special and Differential Treatment (SDT) Provisions for developing countries Section III: WT/MIN(13)/36 WT/L/911 Institutional Arrangements and Final Provisions
TF Measures Transparency and Appeals Publication/internet publication Enquiry Point for trade information Opportunity to comment Consultations Advance rulings Right of appeal Transit 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
Special & Differential Treatment for Developing and LDC countries Implementation of agreement linked with capacity Each county can say when it will implement each measure Donors have promised sufficient technical assistance
Categorization Each developing and LDC country Member will categorize each measure into one of three Category A: at time Agreement enters into force (one year later for LDCs) Category B: Entry into force + (X) time (only local action needed) Category C: After TACB
WTO Trade Facilitation Agreement (TFA) Concluded at Bali Ministerial in December 2013 Countries are notifying the WTO of their categorization of provisions (56 to date) Countries are submitting their Instrument of Acceptance to amend WTO Agreement (4 to date) TFA enters into force upon acceptance by 2/3 of Members (106 out of 160) Moving toward entry into force by December 2015 (Nairobi Ministerial MC10)
USG Trade Capacity Building (Aid for Trade) Since 2001, the U.S. Government has provided a cumulative $15 billion in trade capacity building assistance, making it one of the leading donors on TCB in the last decade. The U.S. has obligated over $800 million for general trade-facilitation related assistance over the past five years. We are continuing those efforts, including supporting countries in assessing their current needs under the Bali agreement, and we expect even more commitments to be made in the near future to assist implementation.
Trade Facilitation Implementation Alliance USAID-led effort Public/private partnership (WEF, ICC, CIPE) Private sector UPS, Maersk, etc. Multiple-donor support (DfID, GTZ, Canada) Global in coverage
Regional vs. National As with obligations within regional organizations, ratification of the TFA will take place at the national level. Implementation will be a longer term effort and can take place at both the national and regional level each country need not reinvent the wheel and donors will look for opportunities to work with regional entities.
How might Borderless and its members help? Advocate and support timely ratification of the TFA. Engage with governments on categorization of TFA provisions. Engage with governments and donors on implementation.
Resources A Comprehensive Approach to Trade Facilitation Capacity Building Connecting Developing Countries to Supply Chains http://tinyurl.com/tradefacilitation
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Paul Fekete Senior International Trade Advisor USAID pfekete@usaid.gov