WTO Trade Facilitation Agreement: An African perspective
Trade facilitation discussions at the World Trade Organisation (WTO) began in December 1996, at the Singapore Ministerial Conference, when the member states instructed the WTO Council for Trade in Goods ‘to undertake exploratory and analytical work… on the simplification of trade procedures in order to assess the scope for WTO rules in this area’.
At the Conference, three other working groups were set up to look at investment, competition policy, and transparency in government procurement within the WTO framework. The four issues (trade facilitation, investment, government procurement and competition policy) became popularly known as the Singapore issues, and were added on the Doha Development Agenda (DDA) at the 2001 Ministerial Conference.
Member states proposed to start negotiations on the Singapore issues after the Cancun Ministerial Conference in 2003, based on ‘a decision to be taken, by explicit consensus, at that session on modalities of negotiations’. However, at the Cancun Ministerial Conference, no progress was made in this regard. In August 2004, WTO members adopted the so-called July Framework, in which they agreed to proceed with the negotiations of only one Singapore issue – trade facilitation. The other three Singapore issues were dropped from the DDA.
Negotiations on trade facilitation were concluded in 2013 at the Bali Ministerial Conference – resulting in the adoption of the Trade Facilitation Agreement (TFA). The TFA was incorporated into the Agreement Establishing the WTO. It entered into force on 22 February 2017, upon ratification by two-thirds of the WTO member states.
Summary of the TFA
The TFA is a legally binding multilateral agreement (binding on WTO members who have ratified it). The Agreement contains rules for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues.
One of the principles on which the TFA is anchored is special and differential treatment. This allows developing and least-developed countries to determine within specified time frames, the specific commitments that they will implement. To implement some of these commitments developing and least developed countries can receive technical and financial assistance. Countries are required to categorise the (Art. 1 to 12) provisions into three (Category A, B and C) and notify other WTO members of these categories.
Among the 12 Articles of the TFA, there are approximately 36 trade facilitation measures. The measures can be split into 238 notifiable small article items, allowing members to designate certain items as Category A, B or C. So far, 47% of the items have been notified by member states as Category A, 11.7% as Category B, 15.9% as Category C; 24.7% have not yet been notified.
Category A contains provisions that a developing country will implement upon entry into force of the TFA. Least-developed countries (LDCs) are required to implement their Category A provisions within one year after entry into force. According to the WTO TFA Database (last updated 15 October 2018), so far 114 countries have notified their Category A provisions.
Category B contains provisions that developing or least-developed countries designate for implementation on a date after a transitional period following the entry into force. In this case, a country notifies other members, no later than one year after entry into force, of the specific provisions and indicative dates of implementation. The WTO TFA Database records that 71 countries have notified their Category B provisions so far.
Category C contains provisions that developing and least-developed countries will implement on a date after a transitional period; the assistance they need to implement such provisions is also noted. Technical and financial support for implementing Category C provisions is provided by the WTO Trade Facilitation Agreement Facility (established in 2014), donor members (e.g. Australia, Canada, Japan, US and EU) and international organisations such as the ITC, OECD, UNCTAD, IMF, World Bank and WCO.
According to the WTO TFA Database, 60 countries have notified their Category C commitments and most countries have requested technical assistance on either all or some designations. The type of technical assistance that has been requested includes human resource and training, legislation and regulatory framework, ICT, institutional procedures, infrastructure and equipment, diagnostic and needs assessment, and awareness-raising.
Countries can amend their Category B and C provisions or extend their implementation dates. Category A provisions by developing countries are excluded from dispute settlement for a period of 2 years after entry into force, and 6 years for LDCs. Category B and C provisions by LDCs are exempted from dispute settlement for a period of 8 years.
The TFA establishes the Committee on Trade Facilitation (TFA Committee) and requires each member to have a National Trade Facilitation Committee (NTFC) to assist with implementation of the TFA. The TFA Committee is open for participation by all members and responsible for overseeing implementation of the TFA. It provides WTO members with a forum to consult on matters related to the operation of the TFA and the advancement of its objectives. NTFCs are responsible for facilitating domestic coordination and implementation of the TFA. The Agreement does not provide for the legal structure or composition of the NTFCs, but most countries have included government ministries, border agencies and private sector representatives in such committees.
Trading across borders in Africa
Empirical studies have demonstrated that moving goods across borders is an onerous process. Excessive bureaucracy, corruption and inefficiency is rife. Traders/goods go through several border agencies and other officials (e.g. customs, immigration, police, army etc), and spend many hours/days at the border. They are also required to produce and complete numerous documents regarding importation or exportation of goods. Traders are also required to bribe officials or else their goods will be confiscated or not cross the border. There is also lack of transparency and awareness of trade rules and regulations by traders and officials. This undermines predictability of the trade regime.
The World Bank’s Logistics Performance Index (2018) shows that Africa is lagging (among other regions) in customs, infrastructure, competence in trade-related logistics and timeliness of exports and imports. Similarly, the World Bank Ease of Doing Business (2018) shows that it generally takes more days to import and export goods in Africa due to complex trade procedures and documentary requirements.
Such bureaucratic measures have hampered the movement of goods (capital, services or people) across African borders, and significant progress has been made in removing tariffs within RECs. Non-tariff barriers have increased trade costs falling heavily on small businesses, individual, women and youth entrepreneurs, and prevent them from trading across borders. High trade costs can lead to raised prices for consumers and reduce investment in Africa. The implementation of the TFA can help African countries tackle these issues.
The TFA and Africa
African countries have joined the WTO as developing or least-developed countries. As at 25 October 2018, out of 44 African countries that are members of the WTO, 31 have ratified the TFA. The Agreement only has a legal force on the African states that have ratified it. African countries have notified none, some or all their categories. Of all the notifiable items, African countries have notified 27% as Category A, 12.4% as Category B, and 15.5% as Category C; 45.2% are not yet notified.
Immediate full implementation of the TFA by African countries is recommended. It will improve trade for African countries, reduce the cost of trading across borders, and allow African countries to better control trade flows, through a combination of procedural streamlining and regulatory measures. The TFA has the potential to enhance both cross-border trade between African countries and trade with other WTO members.
In addition, the TFA urges the implementation of cost and time-effective, and transparent trade measures. This would expedite trade, reduce trade costs and consumer prices, and even increase trade opportunities for small businesses, women and youth entrepreneurs.
Harmonisation and simplification of border clearance procedures, pre-clearance, single window, one-stop-border posts, electronic systems will significantly reduce the procedural and documentary requirements for traders, and the waiting period at the border. Publication and availability of information will reduce corruption and promote transparency and certainty in customs procedures.
The implementation of the TFA complements African countries’ bilateral, regional or plurilateral initiatives to facilitate trade. The TFA encourages member states to enter into or maintain existing plurilateral or regional agreements aimed at facilitating trade through sharing or exchanging customs information and data. The TFA supports customs unions or regional economic arrangements to adopt regional approaches to assist in the implementation of their TFA obligations. It further encourages members to use relevant international standards for their import, export, or transit formalities and procedures.
African countries (e.g. in SADC) have been implementing the provisions of the WCO’s trade facilitation legal instruments akin to the TFA including customs processes, electronic payments, post-clearance audit, expedited shipments, coordinated border management.
The Agreement Establishing the African Continental Free Trade Area (AfCFTA Agreement) contains annexes on customs cooperation and mutual administrative assistance and trade facilitation. The Trade Facilitation Annex borrows heavily from the TFA. Art. 29 of the Annex provides that ‘the extent and the timing of implementation of the provisions of this Annex shall be related to the implementation capacities of state parties … as notified under the WTO Agreement on Trade Facilitation’.
RECs (e.g. SADC, EAC, COMESA) have adopted programs aimed at facilitating trade within their regions. There have also been bilateral and national efforts to facilitate trade among African countries through one-stop border posts, electronic systems and single window concept. For instance, Mozambique, Madagascar, Kenya and Ghana have implemented national single windows for customs clearance. Zambia, Zimbabwe, Uganda, Kenya and São Tomé and Príncipe have one-stop-border posts. Zambia and Mauritius have introduced electronic submission of documents and online payment of customs fees. Botswana, Comoros and Malawi have implemented automated customs data management system.
If Africa is serious about increasing trade across the continent, countries should prioritise implementing trade facilitation measures within the TFA and other national, regional or plurilateral instruments. Importantly, the benefits envisaged in the AfCFTA and the Action for Plan for Boosting Intra-Africa Trade can be fully realised if effective and efficient trade facilitation measures are put in place.
 See Para 20 of the Singapore Ministerial Declaration, adopted on 13 December 1996. Before 1996, trade facilitation rules existed within the frameworks of the World Customs Organisation, United Nations Conference on Trade and Development and United Nations Economic Commission for Europe. The General Agreement on Trade and Tariffs 1947 also contained basic rules pertinent to trade facilitation.
 As of 26 October 2018, 139 of 164 WTO members have ratified the TFA.
 See the tralac Trade Brief by Elisha Tshuma (2017), WTO Trade Facilitation Agreement and its implementation in southern Africa, available at https://www.tralac.org/publications/article/11409-wto-trade-facilitation-agreement-and-its-implementation-in-southern-africa.html; and World Bank (2012), pdf De-fragmenting Africa (1.85 MB) .
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