The Government of the Republic of the Union of Myanmar National Workshop on Trade Facilitation and the Implementation of the WTO Trade Facilitation Agreement Nay Pyi Taw, Myanmar 4-5 June 2015
The Government of the Republic of the Union of Myanmar The WTO Trade Facilitation Agreement as a Tool to Reducing Trade Costs Dr Tengfei WANG Economic Affairs Officer United Nations ESCAP Email: wangt@un.org
International trade transaction process Buy Ship Pay Prepare for export Export Transport Prepare for import Import Commercial Procedures Transport Procedures Regulatory Procedures Financial Procedures Establish Contract Order Goods Advise On Delivery Request Payment Source: UNECE Establish Transport Contract Collect, Transport and Deliver Goods Provide Waybills, Goods Receipts Status reports Obtain Licences etc Provide Customs Declarations Provide Cargo Declaration Apply Trade Security Procedures Clear Goods for Export/Import 3 Provide Credit Rating Provide Insurance Provide Credit Execute Payment Issue Statements
Broad TF definition encompasses the full trade transaction scope In its broader sense, Trade Facilitation involves all operations and all stakeholders from buyer to seller Source: UNECE 4
Buy Ship Pay The WTO Trade Facilitation Agreement Prepare addresses for the border Exportregulatory activities, export practices and formalities Transport Prepare for import Import Commercial Procedures Transport Procedures Regulatory Procedures Financial Procedures Establish Contract Order Goods Advise On Delivery Request Payment Establish Transport Contract Collect,Transport and Deliver Goods Provide Waybills, Goods Receipts Status reports Obtain Licences etc Provide Customs Declarations Provide Cargo Declaration Apply Trade Security Procedures Clear Goods for Export/Import Provide Credit Rating Provide Insurance Provide Credit Execute Payment Issue Statements Source: UNECE 5
Structure of the Trade Facilitation Agreement Preamble Section I - Substantive Provisions TFA Articles Scope GATT articles Articles 1 to 5 Transparency Article X Articles 6 to 10 Fees and Formalities Article VIII Article 11 Transit Article V Article 12 Customs cooperation Addition to GATT Section II - Special and Differential Treatment Section III Institutional Arrangements and Final Provisions 6
Review of section I - Substantive Provisions Overview of transparency articles: Art.1 to 5 Building on article X of GATT 1 2 3 Publication & availability of information Prior publication & consultation Advance rulings Publish trade related information, including through the Internet Creation of enquiry points to answer enquiries and provide forms Provide opportunity to comment changes to trade-related regulations Consult on a regular basis public and private stakeholders Provider traders, authoritative and binding information about various customs disciplines before importation/exportation 4 5 Appeal or Review Procedures Other measures Provide right to administrative review and/or to judicial appeal of decisions made by Customs authority Regulate notification for enhanced controls or inspections Inform the importer in case of detention Provide an opportunity for a confirmatory test 5 TFA - Article number 7
Overview of fees & formalities articles (6 to 10) Building on article VIII of GATT 6 7 8 Review of section I - Substantive Provisions Disciplines on fees and charges Release and clearance of goods Border agency Cooperation 9 Movement of goods under custom control 10 Import, export and transit formalities Publish fees & charges imposed Periodically review them to reduce number and diversity Limit fees and charges to the costs of service rendered Establish best practices in customs and other border procedures, Ensure cooperation and coordination between national and international border regulatory agencies (e.g. alignment of working days and hours, of procedures, formalities ) Provide the possibility to transport goods dedicated for import within the Member state territory under custom control Minimize the incidence and complexity of import, export and transit formalities and decrease and simplify documentation requirements 5 TFA - Article number 8
Review of section I - Substantive Provisions Article 7 review release & 7 clearance of goods Pre-arrival processing Provide traders the facility to submit import documents prior goods arrival Release and clearance of goods Electronic payment Separation of release from determination Provide traders the facility to submit electronic payments for duties, taxes, fees and charges Allow the release of goods prior to the final determination of customs duties, taxes, fees and charges Riskmanagement Set-up a risk management system that focus controls on high-risk consignment and quickly release low-risk consignment 5 TFA - Article number 9
Review of section I - Substantive Provisions Article 7 review: release & 7 clearance of goods Post-clearance audit Ensure consignment documentation compliance after release of the goods Average Release Times Measure and publish periodically the average release time of goods Release and clearance of goods Authorized Operators Provide additional facilitation to selected operators called authorized operators Expedited Shipments Set-up up facilitative procedures to expedite release of air cargo Perishable goods Release within the shortest possible time (incl. outside standard business hours if required by circumstances) 5 TFA - Article number 10
Review of section I - Substantive Provisions Article 10 review: fees & formalities 10 Formalities and docs. requirements Review formalities and documentation requirements to minimize complexity of operations and simplify documentation requirements Formalities connected with importation, exportation and transit Acceptance of Copies Use of International Standards Single Window Acceptance by border regulatory agencies of paper or electronic copies of the required documentation Formalities, procedures and documentation requirements are based on international standards Set-up a single entry point through which traders will submit, only once, information to all border agencies and through which agencies will submit their response back Pre-shipment Inspection No mandatory use of pre-shipment inspections for tariff classification and customs valuation 5 TFA - Article number 11
Article 10 review: fees & formalities 10 Review of section I - Substantive Provisions Use of Customs Brokers (con d) No mandatory use of customs brokers (i.e. the use of customs brokers shall be optional) Formalities connected with importation, exportation and transit Common Border Procedures and forms Rejected goods Apply the same procedures for the release and clearance of goods at the border points throughout its territory Offer to the importer a realistic possibility to return the goods to the exporter or re-consign (if rejected on the basis of failure to comply with SGS or technical standards) Temporary admissions, in/outward processing Release of goods, without payment of duty and taxes, for importation for a predefined period and predefined purpose of use 5 TFA - Article number 12
Review of Article 11: freedom of transit 11 Review of section I - Substantive Provisions Freedom of transit Disciplines on Transit formalities doc., fees and charges requirements Infrastructure Building on article V of GATT Simplified formalities, documentation and controls No restrictions affecting traffic in transit No discrimination vs. import traffic Controls limited to the beginning and end of the operations Fees limited to transportation / administration services costs No quality controls for goods in transit Regulations of transit guarantees and customs convoys Making available physically separate infrastructure for traffic in transit (Best endeavor measure) Cooperation & Coordination Cooperating and coordinating with other countries with a view to enhance freedom of transit Appointing a national coordinator for transit 5 TFA - Article number 13
Review of section I - Substantive Provisions Review of Article 11: freedom of transit Improvement versus article V of GATT New / improved provision Do not apply technical regulations and conformity assessment on goods in transit (Article 11.8) Impacts Further limits burdensome procedure Provide advance filing and processing for goods in transit (Article 11.9) Becomes a binding commitment Limit use of customs convoys (Article 11.5) Enhance member cooperation and appoint transit coordinator (Article 11.12 and 11.13) Only in high-risk circumstances Not when a guarantee has been granted Transparency obligation Improved coordination to smoothen traffic in transit 14
Review of Article 12: Customs cooperation 12 Review of section I - Substantive Provisions Best-practices sharing Share information on best practices in managing customs compliance and cooperate in technical guidance or assistance in building capacity Customs cooperation Cargo specific information sharing Exchange of information and documents to verify an import or export declaration Confirm that the documents provided are true copies of the documents Regional agreements Members retain the possibility to enter / maintain bilateral, or regional agreement for exchange of customs information TFA cannot alter or affect the Members rights and obligations under these agreements 5 TFA - Article number 15
Review of section I - Substantive Provisions Language of the TFA provides for different levels of obligations *Binding: Shall *E.g. Art. 11.8 Members shall not apply technical regulations and conformity assessment procedures to goods in transit *Best Endeavour: Encouraged *E.g. Art.1.2.3 Members are encouraged to make available further trade related information *Combination: shall, to the extent possible/practicable *E.g. Art.2.1 Each member shall to the extent practicable [ ] provide opportunities [ ] to traders [ ] to comment
Review of section II - Special and Differential Treatment TFA provides for unique S&DT Developing and LDCs having favourable treatment as compared to Developed Countries has been an integral part of WTO S&DT in WTO Agreements Lesser tariff reduction Rate of duty Product coverage Longer implementation period Delayed or deferred implementation Lesser Obligations Special Provisions 17 S&DT in TFA go further * Self designation of provisions into category A, B &C * Timing of each category to be decided by individual country * Obligations linked with acquisition of implementation capacity Through provision of TA and CB (including financial assistance) for Category C commitments implementation
Review of section II - Special and Differential Treatment Timing and extent of commitments (Art.14) 3 different categories of commitments: A, B & C Cat. C provisions implementation process Categories Timing Conditionality Category A Time of entry into force of the TFA Ø Category B (x) years after entry into force Ø Implementation TACB provision 2 3 Category C (x) years after entry into force TACB Transitional period 1 18
Review of section II - Special and Differential Treatment Notification and Implementation of Category A commitments (Art.15) Developing countries Implement upon entry into force Category A commitments will then be made an integral part of the Agreement LDCs Notify to the Committee up to one year after entry into force And thereby be made an integral part of the Agreement Notifications due by 31 July 2014 19
Review of section II - Special and Differential Treatment Category B notification & implementation (Art.16 and 18) TFA entry into Force 1 Year 2 Years 3 Years Developing Countries Notify the Committee the provisions and indicative dates for implementation Notify definitive implementation dates - member may request an extension of the notification period...... LDCs... Notify the Committee the provisions and indicative dates for implementation... 20 Confirm designations of provisions and notify implementation dates - Member may request an extension
Review of section II - Special and Differential Treatment Category C Notification & implementation (Art.16 and 18) TFA entry into Force 1 Year 2 Years 2.5 Years 4.5 Years 5.5 Years Developing Countries Notify Committee provisions and indicative dates Member and donor inform TACB arrangeme nts... Inform on progress in TACB and notify definitive dates...... LDCs Notify Notify informatio Committee n on TACB...... Category C required in provisions order to implement Inform TACB arrangeme nts and indicative dates Inform on progress in TACB and notify definitive dates 21
Review of section II - Special and Differential Treatment 22 Early Warning Mechanism (Art.17) If a Member experiences difficulties implementing by the definitive dates it established, it should notify the Committee: Developing Countries: no later than 120 days before the expiration date LDCs: no later than 90 days before the expiration date Notify new dates and indicate reasons for delay Automatic extension if it is the first request and: Extension requested less than 1.5 years (developing) Extension requested less than 3 years (LDCs) Subsequent extensions submitted to the Committee which will give sympathetic consideration
Review of section II - Special and Differential Treatment Other TFA mechanisms (Art.19 and 20) 23 Shifting between Cat. B and C Developing members and LDC would have option to shift between categories Through notification to Committee Shifting from B to C would contain information on Technical Assistance Capacity building and Financial needs Extension in time frame, if needed, through Early waning Mechanism Dispute Settlement Grace Period * For Cat A measures Developing: 2y after entry into force LDCs: 6y after entry into force * For Cat B&C measures 8 years after implementation of the provision for LDCs only * Opportunity for consultation during the grace period For discussing issues relating to implementation * Due Constraint for invoking DSU for LDCS
Review of section III - Institutional Arrangements and Final provisions Art.23.2 requires the set up of a National Committee on Trade Facilitation *To have a TF Committees has been made a binding obligation This obligation cannot be categorized as B or C Must be implemented upon entry into force of the TFA Art.23.2 - 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 provisions of this Agreement. 24
Review of section III - Institutional Arrangements and Final provisions 25 Nature of TFA obligations The language of the text will determine the nature of obligations Shall, May, encouraged to, shall subject to and consistent with Categorization of measure within Cat. A, B or C would not change the nature of obligations Categorization will only determine at what point in time a particular measure will be implemented To the extent of cat. C provisions, the categorization will also help in soliciting technical assistance and capacity building Including financial assistance
Source: ESCAP Trade Insights (2015). Available at: http://www.unescap.org/sites/default/files/trade%20insights%20- %20Issue%20No.%2007-%20TFA%20Notifications%20-%20FINAL.pdf
* Transparency measures, Customs facilitation measures, Strengthening of Freedom of Transit * Extensive flexibility in what and when to implement + Integrated Capacity Building / Technical Assistance Support Mechanism * Useful tool for trade facilitation reform and cutting trade costs * In which categories should LDCs schedule the different measures? * Factors to consider: status/readiness of implementation; priority/expected benefit of a measure vs. implementation cost; need for capacity building * (No real need to rush decision as of 2015) * [Ratification needed by 107 WTO Members for the WTO TFA to enter into force]