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The Trade Facilitation Agreement 2014, was confirmed in Bali, Indonesiain December 2013 at the Ninth Ministerial Conference. After almost 20 years of negotiationsthe agreementwas officially an open invitation for acceptance from the 160 members of the World Trade Organisation(WTO) on 27 of December 2014. However the agreement will only be ratified once 2/3 of the members have informed the WTOof their agreement. For the WTO, the agreement can be viewed as a historic achievement as it is the first multilateral agreement since the WTO’sinception in 1995. The Trade Facilitation Agreement of 2014 is a global multilateral initiative to rationalise the stringent procedures which govern international trade. The principal focus of the Agreement is to have numerous positive consequences on developed and least developed countries. Estimates have shown the the Trade Facilitation Agreement would reduce tradecosts by an average of 14.5%. In turn, this would prospectively improve trade globally by on trillion dollars. This reduction of bureaucratic'red tape' will have favourable effects on small to medium businesses, making it easier for them to trade and join global value chains. One of the most significant aspects of this agreement, lies in the new principle that developing and least developed countriescommitments to the implementation of the provisions outlined by the agreement are conditioned on their procurement of necessary technical capacity.[1]
Historical Context
[edit]1990's
[edit]
The first Trade Facilitation discussions began in the mid-1990s. In 1996, the SingaporeanMinisterial Conferencegave the WTOits initial directive, however under a different conceptual heading. The language used in the brief reflected a potential compromisebetween those wanting to renegotiate terms of a deal and those, primarily from the developing and least developed countrieswho had their doubts about the success of new negotiationsand preferred a much more narrow/limited program. Many of the doubts surrounding a prospective new multi-lateral trade agreement were surrounding concerns about not having the capabilities to take on any additional commitments, especially for developingand least developed countries.All of the developed countriessupported the Trade Facilitation Agreement at this point, as well as a number of developing countries such as Chile, Colombia, Costa Rica, Republic of Korea,Paraguayand Singapore. However, it remained difficult to convince the affiliated nations to agree on multi-lateral negotiations. There was however no opposition to working and drafting the Trade Facilitation Act. The Act promised lower tariffbarriers and non-tariff issues. However, most of the developingand least-developed countrieswere more in favour of an approach which encouraged these guidelinesto be followed opposed to a mandate of disciplines.
Work surrounding the Trade Facilitation Agreement continued after the Singaporean summit. The main purpose of these discussions was to gain an initial understanding of the scope of the agreement. Setting a clearly defined role for the WTObecame a priority. The role the WTOwould play began relatively broad. The earliest proposal indicated that the WTOwould be in charge of payments, insurance and other financial requirements concerned with international trade. In the late 1990’san effort from a number of countries to make the WTOrules binding and not encouraged triggered a response to narrow the scope and focus on selected aspects of GATT. The two main areas of interest were Articles VIII and X of the GATT.
In late 1999, the ‘Colorado Group’, which was made up of predominantly developed countriesand a few developing countries, began to promote the idea of a full negotiating mandate. However, this was met with a number of opposition. A number of members preferred to continue on the exploratory path instead of setting compulsory mandates. With numerous countries standing in opposition of each other, the ‘Colorado Group’ looking for certain mandates and the rest preferring to build upon three existing GATTdisciplines in order to alleviate ‘red tape’ surrounding the trading procedures, the negotiations ended up breaking down. In the aftermath, efforts were allocated to trying to identify the positives and benefits that the Trade Facilitation Act can have on its members.[2]
2000's
[edit]It was not until 2001 at the DohaMinisterial that renewed efforts on the Trade Facilitation negotiationsbegan. The ‘Colorado Group’ was still attempting to increase their membership whilst their opposition were not inactive either. The DohaMinisterial was somewhat successful as it brought the two sides closer to negotiation. However, the negotiationprocess was yet to begin. The 2003 CancúnMinisterial in Septemberemphasised that negotiations still remined elusive.
The Ministerial in Hong Kong2005represented the first concrete point of reference for Trade Facilitation talks. The writing had already been set in stone in Genevaand simply had to be confirmed at the Hong KongMinisterial. There were however still concerns surrounding the Hong KongMinisterial. Those who were in favour of a timely resolution of negotiationswere concerned that an absence of real drafting would continue to delay processes. The developing and least-developed nationswere still concerned about implementation processes. There was a lack of empirical evidencepointing to technical assistance and S&D, rather it was very general. In general, the impact of the Hong KongMinisterial varied depending on who you asked. It was a landmark point in terms of inciting negotiation, but still little progress was made.
Subsequent action from the Hong KongMinisterial did in fact not develop at speeds anticipated. It was not until December 2009, that the “Draft Consolidated Negotiation Text’ was circulated. This draft consisted of approximately 1700 square brackets, highlighting the main conflicting opinions. These brackets eventually expanded to approximately 2200 until it eventually started to come down. The Chairmandecided to appoint several organisers to try and reduce the amount of brackets. Eventually there were more than 14 facilitator groups working parallel on the issues and negotiations.[2]
2010's
[edit]
In March 2013, the WTO decided that it was essential for higher level managementand involvement. The NGTF Chair chose 4 ambassadorsand separated the Draft into segments for each individual to refine. Mario Matus from Chileoversaw the transparency components as well as customs operations. Switzerlandsrepresentative Remigi Winzap was put in charge of articles 6-9. Fred Agah from Nigeriahad the task of refining article 10 and finally Michael Stone from Hong Konglooked after S&D under section 2. In September2013,the WTO'sDirector-Generalalso stepped in to provide council. This came in the form of numerous negotiationsand configurations, resulting in the resolve of many controversiesand issues.
Just prior to the BaliMinisterial Conference in December, with the direct help of the Director General, the process of drafting had resulted in almost a clean text. The previous areas of disagreementwas now only limited to a few members which was able to resolved in a bilateral meeting allowing them to return as members. Previous brackets of dispute and discontent were now bracket free, such as S&D and customscooperation. While the Trade Facilitation Agreement was not fully completed by the Ministerial Conferenceit was in a good enough shape to be brought and completed there. The Ministerial Conferencebrought more rounds of negotiation and disagreement, however at the end the members were able to agree on a text for the Agreement. After a decade of negotiations, the WTOfinally had their Trade Facilitation Agreement at the end of 2013, moving in to 2014.[2]
List of ratified countries
[edit]
| Ratified | Entry Date | |
|---|---|---|
| Total: | 142 | |
| Hong Kong, China | R | 08.12.2014 |
| Singapore | R | 08.01.2015 |
| United States of America | R | 23.01.2015 |
| Mauritius | R | 05.03.2015 |
| Malaysia | R | 26.05.2015 |
| Japan | R | 01.06.2015 |
| Australia | R | 09.06.2015 |
| Botswana | R | 18.06.2015 |
| Trinidad and Tobago | R | 27.07.2015 |
| Korea, Republic of | R | 30.07.2015 |
| Nicaragua | R | 04.08.2015 |
| Nigeria | R | 06.08.2015 |
| Chinese Taipei | R | 17.08.2015 |
| Belize | R | 02.09.2015 |
| Switzerland | R | 02.09.2015 |
| China | R | 04.09.2015 |
| Liechtenstein | R | 18.09.2015 |
| Lao People’s Democratic Republic | R | 29.09.2015 |
| New Zealand | R | 29.09.2015 |
| Togo | R | 01.10.2015 |
| Austria | R | 05.10.2015 |
| Belgium | R | 05.10.2015 |
| Bulgaria | R | 05.10.2015 |
| Croatia | R | 05.10.2015 |
| Cyprus | R | 05.10.2015 |
| Czech Republic | R | 05.10.2015 |
| Denmark | R | 05.10.2015 |
| Estonia | R | 05.10.2015 |
| Finland | R | 05.10.2015 |
| France | R | 05.10.2015 |
| Germany | R | 05.10.2015 |
| Greece | R | 05.10.2015 |
| Hungary | R | 05.10.2015 |
| Ireland | R | 05.10.2015 |
| Italy | R | 05.10.2015 |
| Latvia | R | 05.10.2015 |
| Lithuania | R | 05.10.2015 |
| Luxembourg | R | 05.10.2015 |
| Malta | R | 05.10.2015 |
| Netherlands | R | 05.10.2015 |
| Poland | R | 05.10.2015 |
| Portugal | R | 05.10.2015 |
| Romania | R | 05.10.2015 |
| Slovak Republic | R | 05.10.2015 |
| Slovenia | R | 05.10.2015 |
| Spain | R | 05.10.2015 |
| Sweden | R | 05.10.2015 |
| Thailand | R | 05.10.2015 |
| United Kingdom | R | 05.10.2015 |
| Republic of North Macedonia | R | 19.10.2015 |
| Pakistan | R | 27.10.2015 |
| Panama | R | 17.11.2015 |
| Guyana | R | 30.11.2015 |
| Côte d'Ivoire | R | 08.12.2015 |
| Grenada | R | 08.12.2015 |
| Saint Lucia | R | 08.12.2015 |
| Kenya | R | 10.12.2015 |
| Brunei Darussalam | R | 15.12.2015 |
| Vietnam | R | 15.12.2015 |
| Myanmar | R | 16.12.2015 |
| Norway | R | 16.12.2015 |
| Ukraine | R | 16.12.2015 |
| Zambia | R | 16.12.2015 |
| Georgia | R | 04.01.2016 |
| Lesotho | R | 04.01.2016 |
| Seychelles | R | 11.01.2016 |
| Jamaica | R | 19.01.2016 |
| Mali | R | 20.01.2016 |
| Cambodia | R | 12.02.2016 |
| Paraguay | R | 01.03.2016 |
| Turkey | R | 16.03.2016 |
| Brazil | R | 29.03.2016 |
| Macao, China | R | 11.04.2016 |
| United Arab Emirates | R | 18.04.2016 |
| Samoa | R | 21.04.2016 |
| India | R | 22.04.2016 |
| Russian Federation | R | 22.04.2016 |
| Albania | R | 10.05.2016 |
| Montenegro | R | 10.05.2016 |
| Kazakhstan | R | 26.05.2016 |
| Sri Lanka | R | 31.05.2016 |
| Saint Kitts and Nevis | R | 17.06.2016 |
| Madagascar | R | 20.06.2016 |
| Moldova, Republic of | R | 24.06.2016 |
| El Salvador | R | 04.07.2016 |
| Honduras | R | 14.07.2016 |
| Mexico | R | 26.07.2016 |
| Peru | R | 27.07.2016 |
| Saudi Arabia | R | 28.07.2016 |
| Afghanistan | R | 29.07.2016 |
| Senegal | R | 24.08.2016 |
| Uruguay | R | 30.08.2016 |
| Bahrain | R | 23.09.2016 |
| Bangladesh | R | 27.09.2016 |
| Philippines | R | 27.10.2016 |
| Iceland | R | 31.10.2016 |
| Chile | R | 21.11.2016 |
| Eswatini | R | 21.11.2016 |
| Dominica | R | 28.11.2016 |
| Mongolia | R | 28.11.2016 |
| Gabon | R | 05.12.2016 |
| Kyrgyz Republic | R | 06.12.2016 |
| Canada | R | 16.12.2016 |
| Ghana | R | 04.01.2017 |
| Mozambique | R | 06.01.2017 |
| Saint Vincent and the Grenadines | R | 09.01.2017 |
| Nigeria | R | 16.01.2017 |
| Nepal | R | 24.01.2017 |
| Chad | R | 22.02.2017 |
| Jordan | R | 22.02.2017 |
| Oman | R | 22.02.2017 |
| Rwanda | R | 22.02.2017 |
| Dominican Republic | R | 28.02.2017 |
| Guatemala | R | 08.03.2017 |
| Armenia | R | 20.03.2017 |
| Costa Rica | R | 01.05.2017 |
| Fiji | R | 01.05.2017 |
| Sierra Leone | R | 05.05.2017 |
| Qatar | R | 12.06.2017 |
| Gambia | R | 11.07.2017 |
| Malawi | R | 12.07.2017 |
| Congo, Republic of | R | 05.10.2017 |
| Antigua and Barbuda | R | 27.11.2017 |
| South Africa | R | 30.11.2017 |
| Indonesia | R | 05.12.2017 |
| Israel | R | 08.12.2017 |
| Central African Republic | R | 11.01.2018 |
| Argentina | R | 22.01.2018 |
| Bolivia, Plurinational State of | R | 30.01.2018 |
| Barbados | R | 31.01.2018 |
| Namibia | R | 09.02.2018 |
| Djibouti | R | 05.03.2018 |
| Papua New Guinea | R | 07.03.2018 |
| Cuba | R | 12.03.2018 |
| Benin | R | 28.03.2018 |
| Kuwait | R | 25.04.2018 |
| Uganda | R | 27.06.2018 |
| Burkina Faso | R | 21.09.2018 |
| Zimbabwe | R | 17.10.2018 |
| Cameroon | R | 30.11.2018 |
| Ecuador | R | 15.01.2019 |
| Angola | R | 09.04.2019 |
| Total: | 142 |
Impact
[edit]Economic Consequences
[edit]Currently, the cost of international tradestands at approximately $2 trillion dollars. This is due to a variety of factors including, redundant customsprocedures, borderfees and unnecessary duplications.[4]The economicbenefit of the Trade Facilitation Agreement is still yet to be completely felt and measured. However, estimates of the economic gains as a result of the agreement is widespread. Estimates range from approximately $68 billion to nearly $1 trillion per year. According to the OECD, the Trade Facilitation Agreement has the capacity to reduce trade costsby 14.1% for low income countries, 15.1% for middle-income countries and 12.9% for high-middle-income countries.That would indicate a range of gains of approximately $9 to $133 a year per person on the planet. These large ranges indicate that there are still several uncertainties surrounding the tradedeal.[5]
Impact on developing and least developed countries
[edit]It became evident to the WTOthat the provisions and mandates indicated the Trade Facilitation Agreement would be more difficult to implement for developingand least-developed countries. Therefore the Trade Facilitation Agreement Facility was developed in order to provide assistance and support to these countries. The Trade Facilitation Agreement is projected to have a significantly positive impact on these countries, with an expected 14.5% reduction in total trade costsonce the Agreement comes into force.
The Agreement will also help in making critical practical hurdles which govern international trade,redundant. The wealthier countriesin the Agreement have committed to help reform developing countriestechnical and financial processes in order to increase efficiency. This in turn is hoped to reduce corruption such as bribesin these domestic regions. New technologyand more efficient procedures which reduce the ‘red tape’ surrounding international tradeis forecasted to limit corruptionby limiting its necessity. [6]
Criticisms
[edit]Since the Trade Facilitation Agreement was pushed to be a non-binding document, rather a set of encouragements for developed, developing and least-developed countriesto follow, it has left many developingand least-developed countrieswith doubts about whether the wealthier countrieswill fulfil their commitment of support. Many Africannations are asking questions on how this Agreement is able to benefit them for not just international tradebut also inter-regional trade. Many developing countriesthus are still unable to fully commit to ratifying into this agreement. Developed countrieshave been able to show commitment to the agreement as they have the capacity to satisfy its requirements. However many nations such as Indiaand Chinahave only committed to respectively 70-75% of the Trade Facilitation Agreements measures.[7]
References
[edit]- Batibonak, P. (2017). Africa and the Implementation of the Trade Facilitation Agreement | International Centre for Trade and Sustainable Development. [online] Ictsd.org. Available at: https://www.ictsd.org/bridges-news/bridges-africa/news/africa-and-the-implementation-of-the-trade-facilitation-agreement
- Eliason, A. (2015). The trade facilitation agreement: A new hope for the world trade organization. World Trade Review, 14(4), 643-670. doi:http://dx.doi.org.ezproxy1.library.usyd.edu.au/10.1017/S1474745615000191
- Grainger, A. (2014). The WTO trade facilitation agreement: Consulting the private sector. Journal of World Trade, 48(6), 1167-1188. Retrieved from http://ezproxy.library.usyd.edu.au/login?url=https://search-proquest-com.ezproxy1.library.usyd.edu.au/docview/1647076758?accountid=14757
- Hillberry, R. (2017). Trade Facilitation Agreement's benefits may extend well beyond cutting red tape. Retrieved from http://theconversation.com/trade-facilitation-agreements-benefits-may-extend-well-beyond-cutting-red-tape-73990
- Neufeld, N. (2014). The Long and Winding Road. WTO Working Papers. doi: 10.30875/adc3b358-en
- OECD. (2018). Implementation of the WTO Trade Facilitation Agreement. Organisation for Economic Co-Operation and Development. Retrieved from https://www.oecd.org/tad/policynotes/oecd-tfi-implementation-impact-trade-costs.pdf
- Tfafacility.org. (2019). Ratifications list | TFAF - Trade Facilitation Agreement Facility. [online] Available at: https://www.tfafacility.org/ratifications
- Wto.org. (2015). Implementing the Trade Facilitation Act. [online] Available at: https://www.wto.org/english/res_e/booksp_e/aid4trade15_chap4_e.pdf
- ^ "Implementing the Trade Facilitation Agreement" (PDF). WTO. 2015.
{{cite web}}:|first=missing|last=(help) - ^ a b c Neufeld, Nora. "The long and winding road" (PDF). WTO.
- ^ "Ratifications list | TFAF - Trade Facilitation Agreement Facility". www.tfafacility.org. Retrieved 2019-05-13.
- ^ Eliason, Antonia (2015/10). "The Trade Facilitation Agreement: A New Hope for the World Trade Organization". World Trade Review. 14 (4): 643–670. doi:10.1017/S1474745615000191. ISSN 1474-7456. S2CID 233365410.
{{cite journal}}: Check date values in:|date=(help) - ^ Hillberry, Russell. "Trade Facilitation Agreement's benefits may extend well beyond cutting red tape". The Conversation. Retrieved 2019-05-12.
- ^ Grainger, Andrew (2014). "Consulting the private sector" (PDF). Nottingham.
- ^ "Africa and the Implementation of the Trade Facilitation Agreement | International Centre for Trade and Sustainable Development". www.ictsd.org. Retrieved 2019-05-12.