Implementation of Trade Facilitation Agreement milestone for the global trading – Enalamah

Elizabeth Christopher, Abuja

Nigeria says the implementation of the Trade Facilitation Agreement (TFA) is a major milestone in the multilateral trading system and ties into the country’s Ease of Doing Business agenda.

The Minister of Industry, Trade and Investment, Dr. Okechukwu Enalamah stated this when the first multilateral deal concluded in the 21year history of the World Trade Organization entered into force

He said as countries proceed to implement the Trade Facilitation Agreement (TFA), “Nigeria would like to see a WTO that is more supportive of domestic policy reforms in developing countries like Nigeria and particularly supportive of the private sector and business to drive growth”.

It would be recalled that Nigeria ratified the TFA on January 20th, when it deposited the instrument of acceptance with WTO DG Roberto Azevedo in Davos, on the sidelines of the World Economic Forum (WEF)

The Trade Facilitation Agreement

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 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.

WTO DG Azevêdo welcomed the TFA’s entry into force, noting that the Agreement represents a landmark for trade reform. He said:

“This is fantastic news for at least two reasons. First, it shows members’ commitment to the multilateral trading system and that they are following through on the promises made in Bali. Second, it means we can now start implementing the Agreement, helping to cut trade costs around the world. It also means we can kick start technical assistance work to help poorer countries with implementation.

“This would boost global trade by up to 1 trillion dollars each year, with the biggest gains being felt in the poorest countries. The impact will be bigger than the elimination of all existing tariffs around the world.

“But this is not the end of the road. The real work is just beginning. This is the biggest reform of global trade in a generation. It can make a big difference for growth and development around the world. Now, working together, we have the responsibility to implement the Agreement to make those benefits a reality.”

Concurring the International Trade Centre welcomes the entry into force today of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA).

A  Statement by ITC Executive Director Arancha González on the entry into force of the WTO Trade Facilitation Agreement said the Implementation of the Agreement will lead to a reduction in the cost and time of exporting and importing goods and will be a critical input into making trade happen on the ground.

“The TFA will enable more SMEs to break out of local and national markets, and tap into regional and international value chains. Faster, more efficient and predictable exports will allow SMEs to climb up the value chain into higher-margin products.”

She added that ‘Having supported WTO members in the ratification process of the Trade Facilitation Agreement, ITC will now step up its support to countries as they embark on implementation. ITC has worked with governments to introduce new customs reforms and identify where they need technical assistance to meet the demands of the TFA. ITC will continue to work with businesses, trade and investment support institutions and governments to ensure the agreement leads to concrete impacts on the ground especially for SMEs and women cross border traders.’

The Agreement is unique in that it allows developing and least-developed countries to set their own timetables for implementing the TFA depending on their capacities to do so.

Trade Facilitation Agreement Facility

A Trade Facilitation Agreement Facility (TFAF) was created at the request of developing and least-developed countries to help ensure they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members.

As of February 22 2017, the following WTO members have accepted the TFA: Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei Darussalam, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Afghanistan, Senegal, Uruguay, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica, Mongolia, Gabon, the Kyrgyz Republic, Canada, Ghana, Mozambique, Saint Vincent & the Grenadines, Nigeria, Nepal, Rwanda, Oman, Chad and Jordan.

The acceptance process involves WTO members ratifying a Protocol of Amendment to insert the TFA into Annex 1A of the WTO Agreement. Members who have not done this are still required to do so.

Concurring the International Trade Centre welcomes the entry into force today of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA).

A  Statement by ITC Executive Director Arancha González on the entry into force of the WTO Trade Facilitation Agreement said the Implementation of the Agreement will lead to a reduction in the cost and time of exporting and importing goods and will be a critical input into making trade happen on the ground.

“The TFA will enable more SMEs to break out of local and national markets, and tap into regional and international value chains. Faster, more efficient and predictable exports will allow SMEs to climb up the value chain into higher-margin products.”

She added that ‘Having supported WTO members in the ratification process of the Trade Facilitation Agreement, ITC will now step up its support to countries as they embark on implementation. ITC has worked with governments to introduce new customs reforms and identify where they need technical assistance to meet the demands of the TFA. ITC will continue to work with businesses, trade and investment support institutions and governments to ensure the agreement leads to concrete impacts on the ground especially for SMEs and women cross border traders.’