On 17 October 2018, Zimbabwe deposited with the World Trade Organisation (WTO) Secretariat its instrument of ratification of the WTO Trade Facilitation Agreement (TFA)[1], becoming the 139th (and 31st African) WTO Member State to ratify the Agreement.

Under international law, ratification is the formal act whereby a state confirms its consent to be bound by a treaty or international agreement. As such, Zimbabwe has agreed to be legally bound by all the provisions of the TFA. Any violation of the TFA by Zimbabwe can lead to dispute settlement action by the other WTO member states.

Zimbabwe joined the WTO as a developing country in March 1995.

About the TFA

The TFA was concluded in 2013. It entered into force on 22 February 2017, after being ratified by two-thirds (110 of 164) of the WTO members.

The TFA is about simplifying trade procedures in order to facilitate the movement of goods across borders. It contains provisions for expediting the movement, release and clearance of goods, including goods in transit. The Agreement also covers measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues, and for technical assistance and capacity building in this area.

All provisions of the TFA are binding on state parties (i.e. those that have ratified the Agreement). The TFA contains flexibilities allowing developing and least-developed countries (hereinafter ‘countries’) to determine their own implementation schedules for the Agreement’s provisions based on their capacities. The special and differential treatment principle allows the countries to self-determine the time to implement certain commitments of the TFA (Arts. 1 to 12). Countries are required to categorise each provision of the TFA and notify the WTO members of these categories and the timelines they intend to implement the provisions. Category A contains provisions that the countries will immediately apply; Categories B and C contain provisions for which the countries must indicate the time and capacity-building support they would need to implement such provisions.

In 2014, the TFA Facility was established to provide technical and financial assistance to the countries for them to fully implement (most Category C commitments) and reap the benefits of the TFA.[2] Further, International Organisations such as the International Trade Centre, the Organisation for Economic Cooperation and Development, the United Nations Conference on Trade and Development, the United Nations Economic Commission for Europe, the World Bank Group, and the World Customs Organisation have guaranteed to assist WTO members in implementing their commitments under the TFA. Equally, donor members agree to facilitate the provision of assistance and support for capacity building to developing and least-developed countries.

The TFA further contains additional flexibilities including extension of implementation dates for Category B and C provisions, changing provisions between Categories B and C. It also provides for temporary exclusion from dispute settlement of provisions designated by members, after entry into force of the Agreement. Category A provisions by developing countries will be excluded from dispute settlement for a period of 2 years, and 6 years for least-developed countries. Category B and C provisions by least-developed countries will be exempted from dispute settlement for a period of 8 years.

Upon entry into force of the TFA, all members were required to have a National Trade Facilitation Committee responsible for the domestic coordination and implementation of the Agreement. This obligation is mandatory for all WTO members. The TFA does not provide for the legal structure or composition of the National Trade Facilitation Committees but most countries have included representatives from government ministries and private sector.

Implementation of the TFA by Zimbabwe

Zimbabwe has established a National Trade Facilitation Committee to facilitate both domestic coordination and implementation of the TFA. The Zimbabwe National Trade Facilitation Committee consists of representatives from government border agencies and ministries, and private sector. In October 2016, Zimbabwe notified its Category A Commitments (see table 1).[3]

As noted earlier, Category A commitments include provisions that a country has designated for immediate implementation.

Table 1: Zimbabwe’s Category A commitments

Source: Notification of Category A Commitments under the TFA: Communication from Zimbabwe (2016)

Table 1 shows that Zimbabwe has committed to immediately publish and make easily accessible to governments and traders, through internet or entry points, information related to all fees and charges (other than import and export duties and taxes covered in Art. III of GATT 1994) it imposes in relation the importation or exportation of goods. Zimbabwe has designated that it will immediately publish and make accessible all fees and charges for customs processing. Fees and charges for customs processing are limited to the cost of services rendered in connection with the customs processing of goods. They need not be linked to a specific import or export operation (Arts. 6.1 and 2).

Zimbabwe committed to adopt or maintain procedures allowing the release of goods prior to the final determination of customs duties, taxes, fees, and charges, if such a determination is not done prior to, or upon arrival, or as rapidly as possible after arrival and provided that all other regulatory requirements have been met. To release the goods, Zimbabwe may require ‘payment of customs duties, taxes, fees, and charges determined prior to or upon arrival of goods and a guarantee for any amount not yet determined in the form of a surety, a deposit, or another appropriate instrument provided for in its laws and regulations; or a guarantee in the form of a surety, a deposit, or another appropriate instrument provided for in its laws and regulations’. Zimbabwe retains its right to examine, detain, seize or confiscate or deal with the goods provided it is consistent with its WTO rights and obligations (Art. 7.3).

The country has committed to ensure that its border authorities and agencies (dealing with border controls and procedures for importation, exportation, and transit of goods) cooperate with one another and coordinate their activities to facilitate trade (Art. 8.1).

Zimbabwe has agreed to allow goods intended for import to be moved within its territory under customs control from a customs office of entry to another customs office in its territory from where the goods would be released or cleared (Art. 9).

Zimbabwe has also made several commitments with regards to importation, exportation and transit formalities: Zimbabwe committed to use relevant international standards for its import, export, or transit formalities and procedures (Art. 10.3); it also committed not to require the use of reshipment inspections in relation to tariff classification and customs valuation (Art. 10.5); and promised not to introduce the compulsory use of customs brokers (Art. 10.6). Zimbabwe shall notify the Committee and publish her measures on the use of customs brokers and any subsequent modifications thereof. The Government also committed to apply common customs procedures and uniform documentation requirements for release and clearance of goods throughout its territory (Art. 10. 7). Zimbabwe retains its right to differentiate its procedures and documentation requirements based on the nature and type of goods, or their means of transport, risk management or in accordance with the WTO SPS Agreement. It can also differentiate its procedures and documentation requirements to provide total or partial exemption from import duties or taxes; to applying electronic filing or processing.

In relation to imports rejected by Zimbabwean authorities on grounds of failure to meet SPS or technical regulations, Zimbabwe shall allow the importer to return the rejected goods to the exporter, subject to and consistent with its laws and regulations.

Zimbabwe shall allow temporary admission of goods. That is, to allow goods to be brought into its customs territory conditionally relieved, totally or partially, from payment of import duties and taxes if such goods are brought into its customs territory for a specific purpose, are intended for re-exportation within a specific period, and have not undergone any change except normal depreciation and wastage due to the use made of them.

Zimbabwe has made customs cooperation commitments including exchange of customs information and data (subject to protection and confidentiality rules) to ensure that traders are aware of their compliance obligations and encourage voluntary compliance to allow importers to self-correct without penalty in appropriate circumstances.

Ultimately, Zimbabwe would have to implement all the provisions of the TFA. The country is said to have notified its Category B and C provisions, but the information is not yet recorded on the TFA Facility Notification List updated on 15 October 2018.

It is important to note that full implementation of the TFA has the potential to increase trade between Zimbabwe and its trading partners (both within and outside Africa). It will reduce trade costs and cumbersome trade procedures. Reduction of trade costs will increase trade opportunities for micro, small and medium-sized enterprises (SMEs) to participate in regional and global value chains. Implementation of TFA will cut red tapes at the border, facilitate ease and rapid movement, release and clearance of products. Information on import or export procedures related will be made available and easily accessible to traders through available resources. Automation and electronic services can help trade easier and fast. Harmonisation of processes and standards enhances predictability and certainty for traders. Worth noting is that Zimbabwe has already implemented some trade facilitation measures aligned with the TFA; for instance, the Chirundu One-Stop Border Post between Zimbabwe and Zambia initiated by the Common Market for Eastern and Southern Africa.

Equally important, there will be costs associated with implementation. Such costs will depend on the trade facilitation measures being implemented. Implementation costs are likely to arise from the regulatory and legislative changes, institutional restructuring, new equipment and infrastructure as well as operational and maintenance. Financial support from the TFA Facility and donor members could be used to cover these costs.

[1] The text of the Agreement is available at https://www.tralac.org/documents/resources/external-relations/wto/1873-wto-agreement-on-trade-facilitation-july-2014.html.

[2] See https://www.tfafacility.org/.

[3] Zimbabwe’s Notification of Category A Commitments is available at https://www.tralac.org/documents/resources/by-country/zimbabwe/2349-zimbabwe-notification-of-category-a-commitments-under-the-wto-tfa-october-2016.html