The World Trade Organization (WTO) Trade Facilitation Agreement (TFA) aims to simplify and streamline customs procedures, making it easier and cheaper for businesses to trade across borders. The TFA was adopted at the 9th WTO Ministerial Conference in Bali, Indonesia in 2013 and entered into force on 22 February 2017 after being ratified by two-thirds of the WTO membership.
Currently, there are 164 WTO member countries, with 148 of them having ratified the TFA. The parties to the TFA are divided into three categories: developed, developing, and least-developed countries (LDCs).
Developed countries include Australia, Canada, the European Union, Japan, New Zealand, Norway, Switzerland, and the United States. Developing countries include Brazil, China, India, Indonesia, and South Africa. LDCs are defined by the United Nations and include 46 countries, such as Afghanistan, Bangladesh, Bhutan, Cambodia, and Ethiopia.
The TFA sets out certain obligations that each member country must adhere to. These obligations are grouped into three categories: Category A, Category B, and Category C.
Category A obligations require the member country to ensure the publication and availability of information related to customs procedures, establish a single window for trade documentation, and provide for the processing of documents and information electronically.
Category B obligations are those that the member country must implement as soon as possible, but no later than three years after the TFA’s entry into force. These include the establishment of a national trade facilitation committee, the adoption of risk management principles in customs procedures, and the use of pre-arrival processing for goods.
Category C obligations are those that the member country must implement as soon as possible, but no later than five years after the TFA’s entry into force. These include the provision of advance ruling on the classification of goods, the publication of information on customs valuation, and the adoption of provisions for the release of goods before the final determination of customs duties.
The TFA is considered a significant achievement in the realm of international trade. It is estimated that the agreement will reduce trade costs by up to 14.3%, leading to increased trade flows and economic growth. It is also expected to create opportunities for small and medium-sized enterprises (SMEs) to participate in international trade by making it easier for them to navigate customs procedures.
In conclusion, the WTO TFA parties consist of 148 member countries that have agreed to simplify and streamline customs procedures to facilitate international trade. The obligations that each member country must adhere to are grouped into three categories: Category A, Category B, and Category C. The TFA is expected to reduce trade costs, increase trade flows, and create opportunities for SMEs.
