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WTO members take stock of progress on implementing Trade Facilitation Agreement

WTO members take stock of progress on implementing Trade Facilitation Agreement
Photo credit: ADB

27 Jun 2018

“Almost 85 per cent of WTO members have now completed their domestic ratification processes. This is great progress, but of course there is more to do,” DG Azevêdo said at the launch of a new report entitled Trade Facilitation and the Global Economy published by the (OECD.

“We all know the potential that the TFA has to cut trade costs. This report takes a closer look at why this matters. For example, it highlights the difference that this will make for MSMEs (micro-, small- and medium-sized enterprises), which often face a prohibitively high cost of trading. It also highlights the fact that inefficient border procedures multiply the costs when goods and components cross borders many times during their production,” DG Azevêdo said.

“The Agreement is a truly inclusive endeavour. This was true of its design and its negotiation, and it will be true of its impact,” he said.

The report finds that trade facilitation measures are being implemented worldwide although the progress is uneven across different countries and across the various provisions of the TFA, the Organisation for Economic Co-operation and Development (OECD)’s Julia Nielson and Evdokia Moise said at the book launch. Early improvements have been observed in areas such as automation and streamlining of procedures as well as engagement with the trade community, while the biggest challenge appears to lie in the cooperation of domestic and cross-border agencies, the report states.

WTO members heard further updates from the Secretariat on the implementation of the TFA at the Committee on Trade Facilitation meeting held after the book launch. The current rate of implementation commitments of the Agreement stands at 60.4 per cent as of 26 June.

Broken down by level of development, this equates to a 100 per cent rate of implementation commitments by developed members, 59.1 per cent among developing members and 21.6 per cent among least developed countries (LDCs) according to the TFA Database. The figures correspond to the portions of the TFA that have been legally committed to implementation.

Developed countries committed to implement the Agreement in full upon its entry into force in 22 February 2017, while developing and least-developed members set their own timetables for implementing the TFA, taking into account their respective capacities. These commitments have been communicated to the WTO in a series of notifications.

Developing countries will immediately apply the TFA provisions they have designated as Category A commitments. For the other provisions of the Agreement, they must indicate when these will be implemented and what capacity building support is needed to help them implement these provisions, known as Category B and C commitments. These can be implemented at a later date, with LDCs given more time to notify these commitments.

So far, the WTO has received 113 notifications of Category A commitments, approaching the overall number of notifications in this area that is likely to be received. The current number of Category B commitments stands at 67 and at 56 for Category C.

Furthermore, the Committee meeting featured an experience-sharing segment that focused on the themes of regional approaches to trade facilitation and the provision of opportunities for public comment and consultations on regulatory procedures.

Members also considered the most recent notifications since the last Committee meeting and called on each other to submit the necessary information for transparency. They further heard updates on trade facilitation activities of fellow members and of the Trade Facilitation Agreement Facility.

The next Committee meeting will be in early October.


Launch of OECD book, ‘Trade Facilitation and the Global Economy’, at the WTO

Remarks by DG Azevêdo

Welcome to our colleagues from the OECD. On behalf of the WTO, I am pleased to help launch this publication on Trade Facilitation and the Global Economy. I’d like to congratulate everyone involved.

I won’t speak for very long this morning. I just wanted to add my words of thanks and encouragement – and to underline a few notable elements of this excellent report.

The first point is that I think the report shows the critical importance of the Trade Facilitation Agreement.

We all know the potential that the TFA has to cut trade costs. This report takes a closer look at why this matters.

For example, it highlights the difference that this will make for MSMEs, which often face a prohibitively high cost of trading.

It also highlights the fact that inefficient border procedures multiply the costs when goods and components cross borders many times during their production.

This is the economic reality today. Nearly two-thirds of traded goods have components that were made in at least two different countries. Improving facilitation and lowering costs will help to remove obstacles to joining global value chains. And this will help new participants to join these chains of production.

So we need to keep working to implement the TFA.

Almost 85 per cent of WTO members have now completed their domestic ratification processes. This is great progress, but of course there is more to do.

There is a collective effort behind the implementation of the TFA. And we are very pleased to have partners such as the OECD lending their ongoing support – particularly to provide additional knowledge of what is actually happening on the ground.

This brings me to another notable element of this report, which is that it introduces the OECD’s new Trade Facilitation indicators.

Using information collected in cooperation with: (i) members; (ii) partner organisations; and (iii) the private sector, these indicators will be a very useful tool.

They will support the monitoring and benchmarking of countries’ engagement on trade facilitation, providing verified information on exactly what practical steps have been taken.

And, in this way, they will be of huge help to policy makers. They will allow them to assess the state of their trade facilitation reforms, highlight challenges and identify room for improvement.

This is of huge interest to governments, traders and other stakeholders alike. And it is a real boost to the implementation of the Trade Facilitation Agreement, complementing our work at the WTO.

This brings me to my final point, which is the importance of cooperation.

We need to keep fostering cooperation, not just amongst organisations, but also with the private sector and other partners who are engaged in trade facilitation reforms.

This has been a fundamental tenet of our work here over the years. And now that the Agreement has entered into force, cooperation continues to be key.

We see this in the TF Committee, which is going to meet right after this event.

The Committee has got off to a good start. It allows members to raise all matters related to the implementation of the Agreement. Delegations are regularly updated on the state of the notification and ratification process. And it is an opportunity for them to lend each other a helping hand – both in sharing their experiences and by offering technical support.

The WTO Secretariat also assists in every possible way – and I am heartened to see partners like the OECD willing to engage and play an important role as well.

The TFA continues to be a positive example for what is possible when we work together for a common cause.

This is one of many lessons that we learned from the whole TFA experience. And we should seek to apply it in other areas as well. It showed us the importance of flexibility and creativity in finding convergence among 164 countries of vastly different economic and development status.

The Agreement is a truly inclusive endeavour. This was true of its design and its negotiation, and it will be true of its impact.

The TFA and its reforms will help smaller businesses to trade, including women-owned businesses. It will deliver greater gains to poorer economies. And it will provide technical assistance and capacity support for those economies in their implementation efforts.

So let’s keep working together to ensure that the Agreement is implemented as quickly and effectively as possible – to the benefit of all.

Thank you once again to the OECD, and to all of you, for your support.