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Ghana
Deputy Minister of Trade and Industry, Mr. Carlos Ahenkorah, says Ghana a signatory to the WTO Trade Facilitation Agreement is too small a country to have two Single Window operators.

He challenged the pioneer and only single window operator, Ghana Community Network Services Limited (GCNet) to speedily re-double its efforts in actualising the full breadth of Single Window operations in the country.

He recalled GCNet’s drive to automate trade facilitation and port clearance processes in the country and the difference that brought to trade and port operators.

He praised the Ghana Integrated Cargo Clearance Systems (GICCS) deployed by GCNet as efficient and robust enough to deliver on any valuation needs and address any bottlenecks in the overall clearance systems at the ports to deepen trade facilitation and enhance revenue mobilisation.

He noted that GCNet had taken too long in securing the manifest, the seed document in clearance processes at the ports from source, a situation that may have encouraged other operators to exploit the loophole to try to secure that right from the International Air Transport Association.

The Deputy Trade Minister, however, noted that if GCNet had connected Maersk Lines to transmit its manifest into the Ghana Customs Management System (GCMS) over the past three years then there was no way that it could not oblige other carriers to emulate that example and ensure that both air and sea manifest are transmitted expeditiously.

He also urged GRA (Customs Division) as the statutory body to assist GCNet to get all other carriers to do so with dispatch going forward.

Mr. Ahenkorah also charged GCNet to remain committed to their tenets of innovation and service delivery and work harder to expand the scope of its TradeNet Single Window platforms in order to ward off any superfluous and duplicitous competition.

On his part, the Chief Executive Officer of the Ghana Shippers Authority, Dr. Kofi Mbiah, challenged Government to be bold to speedily resolve critical issues militating against the full actualisation of Single Window implementation in the country.

He said Ghana having been acknowledged as a pioneer in Single Window operations by international bodies like the World Bank and a number of countries having undertaking familiarization visits to Ghana to learn about the GCNet experience.

Dr. Mbiah noted that in as much as there was the need for collaboration between GCNet and other operators, it was also extremely important to define the parameters of engagement to create a level playing field for all players in the trade facilitation and revenue mobilisation eco-system.

Welcoming guests earlier to the event, the Executive Chairman of GCNet, Dr. Nortey Omaboe, noted that as a Public Private Partnership (PPP) conceived since its inception, the model over time had proved to be the most effective way of executing such a national mandate to support revenue mobilisation by Government, foster trade facilitation and enhance business competitiveness.

Dr. Omaboe observed that Government’s quest for increased revenue in an environment of reduced taxes to stimulate private sector growth meant greater focus on GCNet to come up with new initiatives to support revenue mobilisation efforts.

He, therefore, outlined a number of initiatives that GCNet had proposed to Government to enhance revenue mobilization.

These include the need to improve upon the valuation of consignments, the need to invoke bonds for transit goods that do not exit the country after 14 days and the review of the paltry charges currently imposed, ensuring that warehoused goods are ex-warehoused within the stipulated time periods.

Also, tighter control of free zone operations and the duty and tax exemptions granted thereon, the assignment of all newly registered taxpayers to relevant GRA Tax Offices and ensuring they file tax returns, etc.

Dr. Omaboe however expressed concerned about non-clarity in the role of some entrants in the trade facilitation and revenue mobilisation space following the cessation of the destination inspection companies and called for urgent steps to address the worrying development; and its inherent duplications and hence unnecessary cost to Government.

He was confident that what he termed ‘unnecessary complication’ would eventually be resolved mindful of the consideration that the interest of the country should remain paramount and be protected.

Dr. Omaboe assured guests that GCNet was poised for further growth and development in the years ahead as it leverages upon its continuous innovations in deploying systems that bring greater value to the Government and people of Ghana. Source: Ghana News Agency, Two Single Window Operators too much for Ghana, April 19, 2017

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Trade Facilitation Agreement, 22 February 2017.

A major milestone for the global trading system was reached on 22 February 2017 when the first multilateral deal concluded in the 21 year history of the World Trade Organization entered into force. In receiving four more ratifications for the Trade Facilitation Agreement (TFA), the WTO has obtained the two-thirds acceptance of the agreement from its 164 members needed to bring the TFA into force.

Rwanda, Oman, Chad and Jordan (pictured above) submitted their instruments of acceptance to WTO Director-General Roberto Azevêdo, bringing the total number of ratifications over the required threshold of 110. The entry into force of this agreement, which seeks to expedite the movement, release and clearance of goods across borders, launches a new phase for trade facilitation reforms all over the world and creates a significant boost for commerce and the multilateral trading system as a whole.

Full implementation of the TFA is forecast to slash members’ trade costs by an average of 14.3 per cent, with developing 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.

Implementing the TFA is also expected to help new firms export for the first time. Moreover, once the TFA is fully implemented, developing countries are predicted to increase the number of new products exported by as much as 20 per cent, with least developed countries (LDCs) likely to see an increase of up to 35 per cent, according to the WTO study.

At present, 10 out of 24 Members of East and Southern Africa (ESA) have ratified the TFA. These are; Mauritius, Botswana, Lesotho, Kenya, Zambia, Seychelles, Madagascar, Swaziland, Mozambique and Rwanda. So where to now South Africa?

WTO LogoThe WTO announced that the following countries have submitted their instruments of acceptance to the WTO Trade Facilitation Agreement (TFA):

  • 104. Ghana (4 January 2017)
  • 105. Mozambique (6 January 2017)
  • 106. St. Vincent and the Grenadines (9 January 2017)

Only four more ratifications from members are needed to bring the TFA into force. The TFA will enter into force once two-thirds of the WTO membership has formally accepted the Agreement.

WCO News Feb 2016Another bumper edition of customs news, views and success stories (click here to view!). Several countries showcase their modernization and digital developments under the theme “Digital Customs” from declaration management systems, carnet systems to paperless procedures for AEO’s. Nice to see an article featuring South African Customs once again.

There’s also a section featuring articles on ‘big data’. Learn about Canada’s approach to private sector stakeholder engagement. You’ll also find some interesting points of view regarding use and misuse of valuation databases and a whole lot more.  Source WCO

The WCO, in its effort to assist Members with Strategic Planning activities and WTO TFA implementation held two back to back accreditation workshops in Pretoria, South Africa. These events were held during the week of 1-5 February 2016 and 8-12 February 2016, were funded by the United Kingdom within the framework of the WCO-DFID ESA project and HMRC-WCO-UNCTAD project and organizationally supported by the South African Revenue Service.

24Customs officers from the WCO ESA and WCA regions participated in the workshops and were assessed against the Customs Modernization Advisors (CMAs) and Mercator Programme Advisors (MPAs) required profile through a series of testing exercises, presentations, role-plays, group activities and plenary discussions.

Participants were also required to demonstrate their knowledge and strategic application of core WCO tools and instruments and the WTO Trade Facilitation Agreement along with their potential to facilitate discussions with senior Customs and other officials in a strategic context.

At these two events 15 participants successfully completed step 1 of the accreditation process as they demonstrated their potential to become CMA’s/MPA’s during the range of workshop activities.

From the five WCO CMA/MPA accreditation events held to date a total of 41 participants have been assessed as being suitable to become CMAs and MPAs under step 1 of the accreditation process and will be invited to participate in TFA implementation support missions under the Mercator Programme in order to complete the accreditation process. It is expected that the successful candidates are made available by their Customs administrations for further support missions in the future. Source: WCO

ESA_Regional-WS_South-AfricaThe WCO Regional Workshop on Strategic Initiatives for Trade Facilitation and the Implementation of the WTO Trade Facilitation Agreement (TFA) – Mercator Programme – for the WCO East and Southern Africa (ESA) region was held from 15 to 17 September 2015 in Johannesburg, South Africa. It was hosted by the South African Revenue Service (SARS) representing the WCO Vice Chair of the ESA region, and financially supported by the United Kingdom Department for International Development (UK DFID) and the Ministry for Foreign Affairs of Finland. More than 100 participants from 21 ESA Members (Customs, Trade Ministries/equivalent Ministries), the WTO and other international organizations, development partners and the private sector participated in the event.

The Workshop was opened by the Commissioner of SARS, Mr. Thomas Moyane. He expressed his view that the WCO Mercator Programme created significant conditions for contributing to intra-African as well as international trade facilitation benefits. As Vice Chair of the ESA region, he hoped that the Workshop could recommend immediate actions for the region.

The Workshop raised a lot of interest and active discussions from a variety of well-prepared and informative presentations, including the role of the WCO in TFA implementation;  TFA regulations such as Article 23.2 on National Committees on Trade Facilitation (NCTF) and specific national and (sub-)regional examples of implementation approaches; experiences of Trade Ministries and several partner institutions active in the region; and discussions on further approaches to Capacity Building and TFA implementation, including in cooperation with Development Partners.

The region agreed on next steps forward, including on a regional focus on the establishment and maintenance of NCTFs (for instance further provision of replies to the respective WCO survey; identification of the situation within ESA Members); reporting the outcomes of the Workshop to the ESA Regional Steering Committee; encouragement of ESA Members who are not yet Contracting Parties to the Revised Kyoto Convention to accede to it as soon as possible (and/or to identify related Capacity Building needs) – as one concrete way to also support TFA implementation; and responsibility of the ROCB and the Vice Chair to continue collecting and publishing information on ongoing Capacity Building projects and work of partner organizations such as SADC, COMESA, SACU and UNCTAD especially in the TF(A) area in the region – while encouraging Members and partner organizations to share such information.

The Workshop was successfully concluded with positive feedback from Members, partner organizations and development partners. A summary document on the discussions held during the Workshop is currently under finalization by the Vice Chair’s office and the ROCB and will be circulated to all participants of the Workshop in due course. Source: WCO

WTO LogoThe following article is published with the kind permission of the author, Tapia Naula who is Principal Transport Economist at African Development Bank, based in the Ivory Coast. He is an international project manager and transport economist with experience in logistics business, research and trade facilitation. This article is a must for anyone associated with or working on the TFA on the African sub-continent, and a bit of a wake up call to those countries who have as yet done little or nothing to progress their participation.

In the World TFA Cup Asia is leading Africa 72 – 35. The first scores of the WTO Trade Facilitation Agreement are out as member countries submit their Category A notifications. Initial results of the African first series are somewhat unfulfilling. Some teams are playing defensive even if attacking tactic is the only way to win.

In December 2013, WTO members concluded negotiations on a Trade Facilitation Agreement (TFA) at the Bali Ministerial Conference, as part of a wider “Bali Package”. Among trade facilitation practitioners the Agreement was received with great enthusiasm: finally there was a legal instrument, which is concrete enough to make a difference! TFA will enter into force once two-thirds of members have completed their domestic ratification process. Section I contains substantive provisions in 12 main Articles. The members are required to categorize and notify each provision of the Agreement as either A, B or C Category. The A Category commits a country to implement the provision upon entry into force of the TFA, or one year after for LDC’s. For B-Category there will be a transitional period. C-Category provisions are allowed a transitional period, technical assistance and capacity building.

First, let it be said loud and clear: the WTO TFA is an excellent collection of modern trade and transport facilitation instruments in one folder. In developing countries its implementation would mean reforms that would save time, money and efforts for regular business people and consumers. These reforms may be painful but the countries that can do it, will be the future winners of their regional competition and they will be the ones that will most benefit from joining the global value chains. TFA is the best vehicle for poverty reduction invented so far and that is why it is so important.

In August, 2015, 14 African countries and 25 Asian countries had submitted notifications for category A provisions. Asian countries had “accepted” 72 % of all the provisions as A-Category commitments on average where the respective share of the African countries is only 35 %. On Article-level African countries lag behind on every Article except one (Table 1).

In addition to the low overall share of category A-notifications, the African notifications generally look like “random picks” of sub-paragraphs, compared to many Asian members that have commonly chosen the strategy of basically accepting the whole Agreement and making exceptions for certain few paragraphs according to their particular needs.

Were African governments well-informed of the impact and substance of each paragraph – or are they just being cautious, perhaps trying to delay the final commitment? The patterns between African and Asian countries are in any case different.

Table 1

TFA includes also “low hanging fruit” – sections that require little technical expertise to be implemented. At least some of these should have been easy for member countries to accept. “Publication and Availability of Information” is one of those sections. Access to information through internet is routine and affordable. It should not require transition periods or particular technical assistance. Donors are even competing to assist governments with such low cost and high-return activities. Still, less than one third of the African Governments notified this Article.

Here are some other peculiar findings:

  • Out of 14 African countries only Morocco accepted “Border Agency Cooperation” as A –Category provision. Three of the others countries that did not notify it are landlocked countries;
  • Only four out of 14 African countries had fully notified “Freedom of Transit.” Transit challenges in Africa are probably the single most significant source of inefficiency in trade logistics;
  • One of the foundations of modern customs management is the introduction of Risk Management. Only 3 out of 14 African countries had notified this provision;
  • Only Morocco notified Trade Facilitation Measures for Authorized Economic Operators (AEO), which gives certain privileges to traders and transport operators, who show high level of compliance to regulations. One wonders why Kenya, Uganda, Rwanda, Burundi and Tanzania did not notify it as we know that an AEO program is being piloted in the East African Community;
  • Only Senegal notified the sub-Article on Single Window, which is probably the most important one of the whole Agreement. Senegal perhaps deserves this honor – being the first truly African-based single window country – and also representing the good practice of SW management. Yet, according to the African Alliance for e-Commerce, currently there are at least 16 other single windows either already operational or under development in Africa. Why weren’t these developments recognized?

Despite the above “peculiarities” the African situation is fortunately nowhere near as somber as the A-Category notifications indicate. There are plenty of trade and transport facilitation initiatives under implementation – and Africa is indeed “on the Move.” We should on one hand side make sure that the valuable TFA Agreement is not becoming a separate formal process alongside the practical actions on the ground, but rather a framework for coaching governments in climbing up the stairs toward greater competitiveness. On the other hand, the countries should not ignore the existing achievements. A lot has been achieved in Africa in recent years and this process should go on and gain speed. Some sub-regions, which have been less successful in this field need  benchmarks, encouraging and coaching. This is where African and international organizations can play a role.

Although the direct cost of TFA implementation is relatively low, the indirect cost may be extremely high. The indirect cost concerns existing structures, which generate income for organizations and individuals, who often greatly benefit from the status quo. Some governments have entered into concessions outsourcing critical government functions such as pre-customs clearance operations and processing and submissions of declarations to customs. Western firms have efficiently seized the opportunity and negotiated deals, which guarantee profits for in many cases for decades to come. Single Windows in certain countries are good examples for these. In an unnamed Southern African country for example, humanitarian aid is exempt from taxes and duties in import. If however a UN agency for example imports a container of pharmaceuticals worth five million USD, it will have to pay for a Single Window fee of 42,500 USD! Such Ad Valorem fee arrangements are against the TFA. Such concessions are often built inside structures, which profit from the concessions and in exchange – protects its operations and continuity. This is why they are difficult to tackle. This is an example of the problematics that African policy makers must deal with when taking a position in committing in TFA provisions. It may be a whole lot more complicated than what it looks like.

Association between % Share of Sub-Article Level A-Category Commitments and the Corruption Perception Index Score (CPI). Sources: WTO and transparency International.
Association between % Share of Sub-Article Level A-Category Commitments and the Corruption Perception Index Score (CPI). Sources: WTO and transparency International.

The diagram above shows the association of share of the provisions that have been covered by A-Category notifications and the Corruption Perception Index (CPI) score of the countries. For African countries the correlation is moderate (correlation co-efficient: 0.42) but for Asian countries the association is strong (correlation co-efficient: 0.73). The association of the two variables is understandable: the less corruption a country has (the higher the CPI rank is), the more reforms the government is in liberty to conduct (the higher coverage of TFA as A-category Notifications).

We need to better understand the underlying reasons why policymakers cannot let reforms take off. Traditions, corruption and outdated structures are usually the biggest obstacles. These cannot be overcome by merely providing short-term technical assistance and bench-marking the world best practices but only strong political leadership can make the change. Developing partners should raise this topic on the highest political level and “live together” through the reforms with the counterparts.

The Northern Corridor (Kenya, Uganda, Rwanda) provides an encouraging example how multiple reforms can be carried out in very short time. Only two years ago it took staggering 27 days to transport a container from Mombasa Port and deliver it in Kigali, Rwanda. Today it takes only seven days. The improvement was enabled by series of reforms, which were championed by the Heads of States of the Corridor member countries. The example proves that major improvements can indeed be achieved in very short time. On the other hand, even with the most sophisticated instruments, reforms will not succeed if there the high-level ownership is not there. Author: Tapio Naula

cut-red-tape“Simplifying trade documentation”; “automating border procedures”; “streamlining border controls” – all cliche’s of the modern customs and international trade scene, but just how attainable are they? Beyond the pleasantries, and fanfare of ribbon cutting ceremonies, very little seems to happen at the cold face. Sovereign states are inward-looking and jealously wish to preserve their ‘sovereign domains’.

A major World Trade Organization deal on streamlining global customs rules could cut international trade costs by between 12.5 percent and 17.5 percent, a study by the Organization for Economic Co-Operation and Development showed on Thursday.

A deal between India and the United States on the Trade Facilitation Agreement last year, which needs to be backed by all 160 WTO members, had resurrected hopes that the trade body could push through such reforms to cut red tape.

“There are very practical measures that we’ve identified that offer significant benefits,” Ken Ash, the OECD director for Trade and Agriculture, told media.

“Things like simplifying the required trade documentation. Automating border procedures, or streamlining border controls.”
Economists say the Trade Facilitation Agreement could save $1 trillion. Ash declined to endorse this figure, only saying the Paris-based body expected each 1 percent reduction in worldwide trade costs to bring $40 billion in savings.

Australia was to formally accept the agreement later on Thursday, Steven Ciobo, parliamentary secretary to the minister of foreign affairs, said at the news briefing in Paris, making Australia the seventh WTO member to adopt the agreement.

new-Trade-Facilitation-Agreement-Facility-siteThe WTO has launched a new website which will serve as a focal point for members, donors, and others seeking information on the new Trade Facilitation Agreement Facility (TFAF). The TFAF was created at the request of developing country and least-developed country (LDC) members to help ensure that they receive the assistance needed to reap the full benefits of the Trade Facilitation Agreement and to support the ultimate goal of full implementation of the new Agreement by all members. The TFAF will support these countries in assessing their specific needs and identifying possible development partners to help them meet those needs through a diverse number of activities.

The Facility was formally launched on 22 July 2014 by WTO Director-General Roberto Azevêdo and became operational on 27 November 2014. The website can be accessed here! To benefit from this, developing and LDC members must notify the WTO which provisions they will implement when the Agreement enters into force or, in the case of LDCs, within one year after entry into force (Category A commitments); which provisions they will implement after a transitional period following the entry into force of the Agreement (Category B); and which provisions they will implement on a date after a transitional period following the entry into force of the Agreement and that require the acquisition of assistance and support for capacity building (Category C).

The aim of the TFAF is to help ensure that this assistance is provided to all those needing it. The website provides background on the Agreement and the TFAF, information on programmes that support implementation of the Agreement, as well as information on national contact points for trade facilitation in developing and LDC members.

The website also provides information on TFAF support related to the preparation of Category A, B and C commitments, assistance and support for capacity-building, and applications for TFAF grants where no other funding sources are available to developing and LDC countries to meet their implementation needs. The website is a “work in progress” and will be continuously updated to provide useful information for WTO members. Source: WTO

international-trade1The role of the private sector in the implementation of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) will be the focus of the 2015 edition of the Global Facilitation Partnership for Transportation and Trade (GFP) meeting. With the world’s customs administrations currently identifying their respective TFA  implementation commitments and setting up National Trade Facilitation Committees, trade and logistics operators can learn how they can participate in such initiatives by attending these sessions.

The GFP meeting will be held at Palais des Nations, Geneva, on 22 April, and will be divided into three thematic sessions.

The first session, ‘Governments’ Priorities: Strategies for Fostering Private Sector Participation in the TFA Implementation Process’ will look at how governments are planning to implement the TFA.

It will focus on how the private sector is consulted and how an effective participation of the private sector can be facilitated to implement the Agreement.

The second session, ‘Priorities, Perspectives, and Expectations from the Private Sector on TFA Implementation’ will assess how the private sector – including large corporates and small and medium-sized enterprises – view TFA implementation. It will look at the potential benefits from a private-sector perspective, and how the sector can contribute to national and international initiatives to implement the agreement.

The third session, ‘International Organizations’ Co-ordination and Partnership for Supporting TFA Implementation’, will provide an opportunity to share information and experiences on how the TFA can be implemented with public-private partnerships in mind, as how national trade facilitation committees can better support this process.

ITC invites all interested stakeholders to join the GFP meeting at the Palais des Nations on 22 April from 9:00. Click here for link to online registration.

Source: International Trade Centre (Geneva)

WTO TFA implications for LLDCBackground

The Almaty Programme of Action (APoA): Addressing the Special Needs of Landlocked Developing Countries within a New Global Framework for Transit Transport Cooperation for Landlocked and Transit Developing Countries was adopted in 2003 as a response to the growing recognition by the international community of the special needs and challenges faced by the LLDCs. The Programme of Action emphasised five priority policy areas that landlocked and transit countries need to address to resolve the access problems of LLDCs: Transit policy and regulatory frameworks; Infrastructure development; International trade and trade facilitation; International support measures, and Implementation and review.

As one of the priority areas of the APoA, international trade and trade facilitation (streamlining customs and other border procedures) has taken on renewed focus, especially in light of the WTO Bali Ministerial Conference in December 2013, at which WTO members reached consensus on a Trade Facilitation Agreement, as part of the wider ‘Bali package’. As the end of the first ten years of the APoA is drawing to a close, the General Assembly of the United Nations decided to hold a comprehensive Ten-Year Review Conference of the APoA in 2014.

WCO TFA and Landlocked Countries

The WTO Trade Facilitation Agreement sets out commitments that promote clear rules and procedures, many of which are of particular interest to LLDCs. The three most important provisions for LLDCs are Articles 11, 10,and 8. The first one deals specifically with freedom of transit, the second sets out obligations in relation to trade procedures including transit, and the third requires WTO members to cooperate with other members with which they share a common border.

Other TFA provisions of interest to the LLDCs include Articles 1-5 which addresses Publication and Transparency, including the availability of information; Article 2 which provides specific guidance on Consultations before Entry into Force; Article 6, which sets out Disciplines on Fees and Charges imposed on or in Connection with Import and Export and Article 7 which provides rules on Release and Clearance of Goods, including Trade Facilitation Measures for Authorised Operators. In the new Agreement, the obligations take three forms: Binding, Best Endeavour, or a Combination of both.

The TFA presents an opportunity for LLDCs to upgrade their systems, infrastructure and procedures as the Agreement encourages national trade facilitation improvements. Policymakers should therefore ensure that trade facilitation is included in national development plans given the cross cutting nature of trade facilitation. Using this approach, LLDCs will increase their ability to access resources tied to different funding windows, for example, assistance for general trade policy and regulations.

There are 16 Landlocked countries in Africa, which signifies the importance of the WTO TFA and its consequential impact on regional trade groupings.

The WTO TFA is an innovative agreement as it will provide capacity building to developing countries to allow them to undertake the implementation of the agreement where necessary. The Agreement addresses concerns about the implementation costs and capacity building constraints in developing and least developed countries that would be required to implement these rules. The Agreement allows each LLDC to design its TFA implementation plan and choose a timetable of compliance in accordance with its needs, capabilities and confirmed funding and technical assistance from development partners. Further, guidance is provided to WTO members on the domestic institutional arrangements that should be established to maximise the resources to be made available by donors, as well as the structures and systems that should be adhered to at the WTO Secretariat itself to ensure that the process of accessing TFA implementation support is transparent and inclusive.

It is essential to note that the Agreement specifies a strict national approach to implementation and makes no provision to resolve the issues which are closest to LLDCs interests, such as regional economic corridors, which fall outside the purview of the WTO’s multilateral disciplines. Despite this shortcoming, LLDCs will benefit from deepening their links and their involvement in fora supported by the development banks and bilateral agencies which fund these regional programmes. This will ensure that their interests are adequately reflected in the design of development plans for regional infrastructure improvements, regulatory reforms, technical assistance and capacity building.

Although the language of the TFA is legally binding in relation to some key aspects of freedom of transit, it has one important proviso. If an LLDC developing country neighbour denotes freedom of transit as a Category C obligation, it will only become justiciable and fully legally binding after the expiration of the transition date determined by that country and the delivery of suitable technical assistance by donors. Against this background, an optimal outcome for LLDCs would be that as many transit countries as possible register freedom of transit as a Category A obligation, as this would come into force immediately.

Read the full preparatory report on the Implications of the WTO ATF on Landlocked Developing Countries, available on the United Nations Conference on Landlocked Developing Countries website.

Related articles

India_USA-3The U.S. and India have reached an agreement that promises to pave the way toward global implementation of the WTO Trade Facilitation Agreement (TFA). The breakthrough agreement between India and the U.S. should now make it possible for member countries to begin implementing the requirements of the agreement, providing potentially significant financial benefits to businesses trading goods around the world as local customs procedures are streamlined. The target date for ratification of the agreement is 31 July 2015. Upon ratification by two-thirds of the membership, the agreement will enter into force for all WTO states. Member state will then begin the process of adopting conforming legislation.

The Trade Facilitation Agreement

Concluded in December 2013, the TFA is intended to streamline, and to some extent harmonize, customs clearance procedures around the world by imposing new multilateral disciplines on customs procedures in all member countries. The agreement imposes basic globally applicable principles for transparency, due process, and reasonableness in the development and implementation of customs clearance requirements across a broad spectrum of activities related to importing, exporting, and transiting of goods.

The U.S.-India agreement

While the specific details of the bilateral agreement are not publicly available at this time, a press release from the Office of the U.S. Trade Representative states that there are two key elements of the deal:

  • the U.S. and India agree that the multilateral TFA should be implemented without conditions, on the basis of a standard legal instrument for implementing new WTO agreements; and
  • the “peace clause” agreed upon by WTO members in December 2013, under which WTO members will refrain from initiating challenges to certain food security programs under the WTO dispute settlement process, will remain in place “until a permanent solution is found.”

Since announcement of the agreement last December, India has raised concerns that developing countries need greater assurances regarding their ability to maintain government agricultural buying programs and other farm subsidies until an agreement could be reached among WTO members on how to bring such programs into conformity with the body’s trade rules. The U.S. and India had previously disagreed on the form such assurances should take.

Under the new bilateral agreement, the U.S. and India will seek a General Council decision on the two key elements outlined above. A General Council decision will require the consensus of all WTO members. Source: Hogan Lovells International Trade Alert

The World Trade Organisation headquarters in Geneva [AFP Photo]

The World Trade Organisation headquarters in Geneva [AFP Photo]

The World Trade Organization got a surprise setback on Thursday when India, pushing for concessions on agricultural stockpiling, vetoed plans for universal customs rules. The deal could have added $1 trillion and 21 million jobs to the world economy.

The July 31 deadline on the first proposal for major global economic reform in two decades – a series of customs procedures known as “trade facilitation” – left negotiators empty-handed after India refused to sign up to it.

India, with its large number of poor and new nationalist government, had demanded the exclusive right to subsidize and stockpile grains which is not permitted by WTO rules.

The WTO, experiencing what may be its worst setback in its 19-year history, reluctantly admitted defeat.

We have not been able to find a solution that would allow us to bridge that gap,” WTO Director-General Roberto Azevedo told negotiators in Geneva just hours before the deadline was set to lapse.

Some analysts are of the opinion the failure represents the beginning of a new era of trade deals, which will depend more on individual economies forging their own initiatives, as opposed to attempting to force global reform.

Today’s developments suggest that there is little hope for truly global trade talks to take place,” Jake Colvin at the National Foreign Trade Council, a leading US business group, told Reuters.

The vast majority of countries who understand the importance of modernizing trade rules and keeping their promises will have to pick up the pieces and figure out how to move forward.

Whether or not other countries will pick up the dropped ball and try to move forward despite the loss is not yet clear, but the present mood is noticeably downbeat.

We’re obviously sad and disappointed that a very small handful of countries were unwilling to keep their commitments from the December conference in Bali, and we agree with the Director-General that action has put this institution on very uncertain new ground,” US Ambassador to the WTO Michael Punke told reporters.

Meanwhile, there is speculation that some countries may decide to go ahead with the plan without India’s support.

However, Azevedo said that while the world’s largest economies had choices on how to respond to the failed talks, the poorest economies would suffer the brunt of the fallout.

If the system fails to function properly then the smallest nations will be the biggest losers,” he said. “It would be a tragic outcome for those economies – and therefore a tragic outcome for us all.

Source: Russia Today (contributed by V Singh)

Related articles

Azevêdo launches new WTO Facility [Photo: WTO]

Azevêdo launches new WTO Facility [Photo: WTO]

A new initiative unveiled at the WTO on 22 July 2014 will help developing countries and least-developed countries reap the benefits of the WTO’s new Trade Facilitation Agreement, which was agreed at the Bali Ministerial Conference in December 2013.

The new Facility will complement existing efforts by regional and multilateral agencies, bilateral donors, and other stakeholders to provide Trade Facilitation-related technical assistance and capacity-building support. It will act as a focal point for implementation efforts. It will become operational when the protocol to insert the Trade Facilitation Agreement into the existing regulatory framework is adopted by WTO Members. The functions of the Facility will include:

  • supporting LDCs and developing countries to assess their specific needs and identify possible development partners to help them meet those needs
  • ensuring the best possible conditions for the flow of information between donors and recipients through the creation of an information sharing platform for demand and supply of Trade Facilitation-related technical assistance
  • disseminating best practice in implementation of Trade Facilitation measures
  • providing support to find sources of implementation assistance, including formally requesting the Director-General to act as a facilitator in securing funds for specific project implementation
  • providing grants for the preparation of projects in circumstances where a Member has identified a potential donor but has been unable to develop a project for that donor’s consideration, and is unable to find funding from other sources to support the preparation of a project proposal
  • providing project implementation grants related to the implementation of Trade Facilitation Agreement provisions in circumstances where attempts to attract funding from other sources have failed. These grants will be limited to “soft infrastructure” projects, such as modernization of customs laws through consulting services, in-country workshops, or training of officials.

South Africa, on the other hand has warned of the concerns of developing countries being sidelined under a global trade deal, adding to fears India and some African states may block the landmark Bali agreement. South African Minister for Trade and Industry further intimated that the country would have no difficulty in implementing the trade facilitation agreement but said it would “go along with” the decisions made by its allies within the WTO. Source: WTO

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India, China, US [Picture: www.wespeaknews.com]

India, China, US [Picture: http://www.wespeaknews.com]

The World Trade Organization agreed on Monday this week to side with claims against the United States made by both China and India concerning US-imposed tariffs on products exported to America.

In both instances, the WTO ruled against the US and decided in favor of the major BRICs countries, who for two years now have each asked the organization to intervene and weigh in on America’s use of tariffs to tax certain imports dating back to 2007.

With regards to both cases, the WTO’s judges ruled that the US acted “inconsistent with its agreement on subsidies and countervailing duties,” or taxes imposed on goods sold by “public bodies.”

In China, the panel agreed, US officials improperly levied those taxes against state-owned enterprises that the WTO does not consider to be “public bodies.” Instead, the WTO said, those entities were majority-owned by the Chinese government, but did not perform “government function” or exercise “government authority,” according to the Financial Times. With respect to India, the WTO again agreed that the US was wrong to similarly treat state-owned National Mineral Development Corporation as a public body, according to the International Business Times.

At issue were billions of dollars’ worth of Chinese steel products, solar panels, aluminum, paper and other goods shipped to the US after being taxed as originating from public bodies. The panel’s decision, Reuters reported, “reflected a widespread concern in the 160-member WTO over what many see as illegal U.S. protection of its own producers.”

“China urges the United States to respect the WTO rulings and correct its wrongdoings of abusively using trade remedy measures, and to ensure an environment of fair competition for Chinese enterprises,” China’s commerce ministry said in a statement.

Mike Froman, the US trade representative, responded by saying Washington was “carefully evaluating its options, and will take all appropriate steps to ensure that US remedies against unfair subsidies remain strong and effective”.

Nevertheless, Froman added that the WTO’s ruling in the Indian case constituted at least a partial victory for the US.

“The panel’s findings rejecting most of India’s numerous challenges to our laws and determinations is a significant victory for the United States and for the (US) workers and businesses making these steep products,” he told Reuters. Source: Russia Today.