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National Workshop on Trade Facilitation and the Implementation of the WTO Trade Facilitation Agreement
Nay Pyi Taw, Myanmar
4-5 June 2015
The Government of the Republic
of
the Union of Myanmar
The WTO Trade Facilitation Agreement as a Tool to Reducing Trade Costs
Dr Tengfei WANG
Economic Affairs Officer
United Nations ESCAP
Email: wangt@un.org
The Government of the Republic
of
the Union of Myanmar
International trade transaction process
3
Buy PayShip
ImportTransportPrepare for
exportExport
Prepare
for import
•Establish Contract
•Order Goods
•Advise On Delivery
•Request Payment
•Establish Transport
Contract
•Collect, Transport
and Deliver Goods
•Provide Waybills,
Goods Receipts
Status reports
•Obtain Licences etc
•Provide Customs Declarations
•Provide Cargo Declaration
•Apply Trade Security Procedures
•Clear Goods for Export/Import
•Provide Credit Rating
•Provide Insurance
•Provide Credit
•Execute Payment
•Issue Statements
Commercial
Procedures
Transport
Procedures
Regulatory
Procedures
Financial
Procedures
Source: UNECE
Broad TF definition encompasses
the full trade transaction scope
4
In its broader sense,
Trade Facilitation involves all operations and all
stakeholders from buyer to seller
Source: UNECE
Source: UNECE
Buy PayShip
ImportTransportPrepare for
exportExport
Prepare
for import
• Establish Contract
• Order Goods
• Advise On Delivery
• Request Payment
• Establish Transport
Contract
• Collect,Transport and
Deliver Goods
• Provide Waybills, Goods
Receipts Status reports
• Provide Credit Rating
• Provide Insurance
• Provide Credit
• Execute Payment
• Issue Statements
Commercial
Procedures
Transport
Procedures
Financial
Procedures
5
•Obtain Licences etc
• Provide Customs Declarations
• Provide Cargo Declaration
• Apply Trade Security
Procedures
•Clear Goods for Export/Import
Regulatory
Procedures
The WTO Trade Facilitation Agreement
addresses the border regulatory
activities, practices and formalities
Structure of the Trade Facilitation Agreement
6
TFA Articles Scope GATT articles
Articles 1 to 5 Transparency Article X
Articles 6 to 10 Fees and Formalities Article VIII
Article 11 Transit Article V
Article 12 Customs cooperation Addition to GATT
Section II - Special and Differential Treatment
Section III – Institutional Arrangements and Final Provisions
Section I - Substantive Provisions
Preamble
Overview of transparency articles: Art.1 to 5 Building on article X of GATT
7
Publication &
availability of
information
• Publish trade related information, including through the Internet
• Creation of enquiry points to answer enquiries and provide forms
1
Prior
publication &
consultation
• Provide opportunity to comment changes to trade-related regulations
• Consult on a regular basis public and private stakeholders
2
Appeal or
Review
Procedures
• Provide right to administrative review and/or to judicial appeal of
decisions made by Customs authority
4
Other
measures
• Regulate notification for enhanced controls or inspections
• Inform the importer in case of detention
• Provide an opportunity for a confirmatory test
5
5 TFA - Article number
Review of section I - Substantive Provisions
Advance
rulings
• Provider traders, authoritative and binding information about various
customs disciplines before importation/exportation
3
Overview of fees & formalities articles (6 to 10) Building on article VIII of GATT
8
Disciplines on
fees and
charges
• Publish fees & charges imposed
• Periodically review them to reduce number and diversity
• Limit fees and charges to the costs of service rendered
6
Release and
clearance of
goods
• Establish best practices in customs and other border procedures,
7
Border agency
Cooperation
• Ensure cooperation and coordination between national and international
border regulatory agencies (e.g. alignment of working days and hours, of
procedures, formalities…)
8
Movement of
goods under
custom control
• Provide the possibility to transport goods dedicated for import within the
Member state territory under custom control
9
Import, export
and transit
formalities
• Minimize the incidence and complexity of import, export and transit
formalities and decrease and simplify documentation requirements
10
5 TFA - Article number
Review of section I - Substantive Provisions
Article 7 review – release & clearance of goods
9
Release and
clearance of
goods
7
5 TFA - Article number
Provide traders the facility to submit import documents
prior goods arrival
Provide traders the facility to submit electronic
payments for duties, taxes, fees and charges
Allow the release of goods prior to the final
determination of customs duties, taxes, fees and
charges
Set-up a risk management system that focus controls on
high-risk consignment and quickly release low-risk
consignment
Pre-arrival
processing
Electronic
payment
Separation of
release
from
determination
Risk-
management
Review of section I - Substantive Provisions
10
Release and
clearance of
goods
7
5 TFA - Article number
Ensure consignment documentation compliance after
release of the goods
Measure and publish periodically the average release
time of goods
Provide additional facilitation to selected operators
called ‘authorized operators’
Set-up up facilitative procedures to expedite release of
air cargo
Post-clearance
audit
Average
Release Times
Authorized
Operators
Expedited
Shipments
Perishable
goods
Release within the shortest possible time (incl. outside
standard business hours if required by circumstances)
Review of section I - Substantive Provisions
Article 7 review: release & clearance of goods
Article 10 review: fees & formalities
11
Formalities
connected
with
importation,
exportation
and transit
10
5 TFA - Article number
Review formalities and documentation requirements to
minimize complexity of operations and simplify
documentation requirements
Acceptance by border regulatory agencies of paper or
electronic copies of the required documentation
Formalities, procedures and documentation
requirements are based on international standards
Set-up a single entry point through which traders will submit,
only once, information to all border agencies and through
which agencies will submit their response back
Formalities
and docs.
requirements
Acceptance
of Copies
Use of
International
Standards
Single Window
Pre-shipment
Inspection
No mandatory use of pre-shipment inspections for tariff
classification and customs valuation
Review of section I - Substantive Provisions
Article 10 review: fees & formalities (con’d)
12
Formalities
connected
with
importation,
exportation
and transit
5 TFA - Article number
No mandatory use of customs brokers (i.e. the use of
customs brokers shall be optional)
Apply the same procedures for the release and
clearance of goods at the border points throughout its
territory
Offer to the importer a realistic possibility to return the
goods to the exporter or re-consign (if rejected on the
basis of failure to comply with SGS or technical standards)
Release of goods, without payment of duty and taxes,
for importation for a predefined period and predefined
purpose of use
Use of
Customs
Brokers
Common
Border
Procedures
and forms
Rejected
goods
Temporary
admissions,
in/outward
processing
10
Review of section I - Substantive Provisions
Review of Article 11: freedom of transitBuilding on article V of GATT
13
Freedom of
transit
5 TFA - Article number
• Simplified formalities, documentation and controls
• No restrictions affecting traffic in transit
• No discrimination vs. import traffic
• Controls limited to the beginning and end of the operations
• Fees limited to transportation / administration services costs
• No quality controls for goods in transit
• Regulations of transit guarantees and customs convoys
• Making available physically separate infrastructure for
traffic in transit (Best endeavor measure)
• Cooperating and coordinating with other countries
with a view to enhance freedom of transit
• Appointing a national coordinator for transit
Disciplines
on Transit
formalities
doc., fees
and charges
requirements
Infrastructure
Cooperation
&
Coordination
11
Review of section I - Substantive Provisions
Review of Article 11: freedom of transit Improvement versus article V of GATT
14
New / improved provision
Do not apply technical regulations and
conformity assessment on goods in
transit (Article 11.8)
Further limits burdensome procedure
Provide advance filing and processing
for goods in transit (Article 11.9)Becomes a binding commitment
Impacts
Limit use of customs convoys (Article
11.5)
Only in high-risk circumstances
Not when a guarantee has been granted
Transparency obligation
Enhance member cooperation and
appoint transit coordinator (Article 11.12
and 11.13)
Improved coordination to smoothen
traffic in transit
Review of section I - Substantive Provisions
Review of Article 12: Customs cooperation
15
Customs
cooperation
5 TFA - Article number
Share information on best practices in managing customs
compliance and cooperate in technical guidance or assistance
in building capacity
Regional
agreements
12
Members retain the possibility to enter / maintain bilateral, or
regional agreement for exchange of customs information
• TFA cannot alter or affect the Members rights and obligations
under these agreements
Best-practices
sharing
Cargo specific
information
sharing
Exchange of information and documents to verify an import
or export declaration
Confirm that the documents provided are true copies of the
documents
Review of section I - Substantive Provisions
*Binding: “Shall”
*E.g. Art. 11.8 Members shall not apply technical regulations and
conformity assessment procedures … to goods in transit
*Best Endeavour: “Encouraged”
*E.g. Art.1.2.3 Members are encouraged to make available further
trade related information…
*Combination: “shall, to the extent possible/practicable”
*E.g. Art.2.1 Each member shall to the extent practicable […] provide
opportunities […] to traders […] to comment…
Language of the TFA provides for
different levels of obligations
Review of section I - Substantive Provisions
TFA provides for unique S&DT
17
S&DT in WTO Agreements S&DT in TFA go further
Lesser tariff reduction
• Rate of duty
• Product coverage
Longer implementation period
Delayed or deferred implementation
Lesser Obligations
Special Provisions
* Self designation of provisions into
category A, B &C
* Timing of each category to be decided
by individual country
* Obligations linked with acquisition of
implementation capacity
• Through provision of TA and CB
(including financial assistance) for
Category C commitments
implementation
Developing and LDCs having favourable treatment as compared to
Developed Countries has been an integral part of WTO
Review of section II - Special and Differential Treatment
18
Timing and extent of commitments (Art.14)
Categories Timing Conditionality
Category ATime of entry into
force of the TFA Ø
Category B(x) years after
entry into force Ø
Category C TACB(x) years after
entry into force
3 different categories of
commitments: A, B & C
1
2
3
Transitional period
TACB provision
Implementation
Cat. C provisions
implementation process
Review of section II - Special and Differential Treatment
Notification and Implementation of Category A commitments (Art.15)
19
Developing countries LDCs
• Notify to the Committee
up to one year after
entry into force
• And thereby be made an
integral part of the
Agreement
• Implement upon entry
into force
• Category A commitments
will then be made an
integral part of the
Agreement
• Notifications due by
31 July 2014
Review of section II - Special and Differential Treatment
Category B notification &
implementation (Art.16 and 18)
20
Developing
Countries
LDCs
TFA entry
into Force 1 Year 2 Years 3 Years
Notify the
Committee the
provisions and
indicative dates
for
implementation
Notify the
Committee the
provisions and
indicative dates
for
implementation
Notify definitive
implementation
dates - member may
request an
extension of the
notification period
Confirm
designations of
provisions and notify
implementation
dates - Member may
request an
extension
... ...
... ...
Review of section II - Special and Differential Treatment
Category C Notification & implementation (Art.16 and 18)
21
Developing
Countries
TFA entry
into Force 1 Year2 Years
5.5 Years2.5 Years4.5 Years
Notify
Committee
provisions
and
indicative
dates
Member
and donor
inform
TACB
arrangeme
nts
Inform on
progress in
TACB and
notify
definitive
dates
LDCs
Inform
TACB
arrangeme
nts and
indicative
dates
Notify
Committee
Category C
provisions
Notify
informatio
n on TACB
required in
order to
implement
Inform on
progress in
TACB and
notify
definitive
dates
... ... ...
... ...
Review of section II - Special and Differential Treatment
Early Warning Mechanism (Art.17)
22
If a Member experiences difficulties implementing by
the definitive dates it established, it should notify the
Committee:
• Developing Countries: no later than 120 days before
the expiration date
• LDCs: no later than 90 days before the expiration
date
Notify new dates and indicate reasons for delay
Automatic extension if it is the first request and:
• Extension requested less than 1.5 years (developing)
• Extension requested less than 3 years (LDCs)
Subsequent extensions submitted to the Committee
which will give sympathetic consideration
Review of section II - Special and Differential Treatment
Other TFA mechanisms (Art.19 and 20)
23
Shifting between Cat. B and C Dispute Settlement – Grace Period
Developing members and LDC would
have option to shift between categories
• Through notification to Committee
Shifting from B to C would contain
information on
• Technical Assistance
• Capacity building and
• Financial needs
Extension in time frame, if needed,
through Early waning Mechanism
* For Cat A measures
• Developing: 2y after entry into force
• LDCs: 6y after entry into force
•
* For Cat B&C measures
• 8 years after implementation of the
provision for LDCs only
* Opportunity for consultation during the
grace period
• For discussing issues relating to
implementation
* Due Constraint for invoking DSU for LDCS
Review of section II - Special and Differential Treatment
Art.23.2 requires the set up of a National
Committee on Trade Facilitation
*To have a TF Committees has been made a ‘binding obligation’
• This obligation cannot be categorized as B or C
• Must be implemented upon entry into force of the TFA
24
Art.23.2 - Each Member shall establish and/or maintain a
national committee on trade facilitation or designate an
existing mechanism to facilitate both domestic coordination and implementation of provisions of this Agreement.
Review of section III - Institutional Arrangements and Final provisions
Nature of TFA obligations
25
The language of the text will determine the nature of
obligations
• Shall, May, encouraged to, shall subject to and consistent with…
Categorization of measure within Cat. A, B or C would not
change the nature of obligations
Categorization will only determine at what point in time a
particular measure will be implemented
To the extent of cat. C provisions, the categorization will also
help in soliciting technical assistance and capacity building
• Including financial assistance
Review of section III - Institutional Arrangements and Final provisions
Source: ESCAP Trade Insights (2015). Available at: http://www.unescap.org/sites/default/files/Trade%20Insights%20-
%20Issue%20No.%2007-%20TFA%20Notifications%20-%20FINAL.pdf
*Transparency measures, Customs facilitation measures, Strengthening of Freedom of Transit
*Extensive flexibility in what and when to implement + Integrated Capacity Building / Technical Assistance Support Mechanism
*� Useful tool for trade facilitation reform and cutting trade costs
* In which categories should LDCs schedule the different measures?
* Factors to consider: status/readiness of implementation; priority/expected benefit of a measure vs. implementation cost; need for capacity building
* (No real need to rush decision as of 2015)
* [Ratification needed by 107 WTO Members for the WTO TFA to enter into force]
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