The WTO Trade Facilitation Agreement

Paul FeketeSenior International Trade Advisor

U.S. Agency for International Development (USAID)

May 21, 2015Borderless Alliance

Palm Club HotelAbidjan, 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

• 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 at the WTO

• Infrastructure• Export promotion• Shipping/logistics• Transport security• IT and e-commerce• Trade finance

Trade Facilitation

• Articles I—specific commitments.

• Article II—Special and Differential Treatment (TCB Provisions)

• Article III—Institutional Arrangements

WTO Trade Facilitation Agreement

Trade Facilitation

Economic Community of West African States (ECOWAS)Union Economique et Monétaire Ouest-AfricaineLe Comité Permanent Inter-Etats de Lutte contre la Sécheresse dans le Sahel (CILSS)

Regional Integration in West Africa

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.

• Articles I specific commitments

• Article II Special and Differential Treatment (TCB Provisions)

• Article III Institutional Arrangements

WTO Trade Facilitation Agreement

• UEMOA• ECOWAS• SADC• COMESA• Tripartite• CFTA

Regional Trade Integration

Trade Facilitation

Trade Facilitation Agreement

Section I:

�12 articles of technical measures

Section II :

�Special and Differential Treatment (SDT) Provisions for developing countries

Section III :

�Institutional Arrangements and Final Provisions

WT/MIN(13)/36WT/L/911

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

• 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)

WTO Trade Facilitation Agreement (TFA)

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.

• USAID-led effort• Public/private partnership (WEF, ICC, CIPE)• Private sector—UPS, Maersk, etc.• Multiple-donor support (DfID, GTZ, Canada)• Global in coverage

Trade Facilitation Implementation Alliance

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.

A Comprehensive Approach to Trade Facilitation Capacity Building

Connecting Developing Countries to Supply Chains

http://tinyurl.com/tradefacilitation

Resources

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Paul FeketeSenior International Trade Advisor

USAIDpfekete@usaid.gov