Implementation of the WTO Trade Facilitation Agreement in Asia and the Pacific

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An article published on the August 2019 ESCAP Trade Insights bulletin examines the status of implementation of the World Trade Organisation (WTO) Trade Facilitation Agreement (TFA) in the Asia-Pacific economies.

The TFA, that includes provisions aimed to increase the transparency of the trading process, expedite goods clearance, facilitate transit, and increase cooperation among customs authorities, contains some flexibility arrangements for Developing Countries and Least Developed Countries, known as “Special and Differential Treatment” (SDT), which enable them, among others things, to request capacity building and technical assistance before a provision is implemented. In order to benefit from the SDT, such countries have to categorise and notify to the WTO Secretariat each measure of the Agreement they commit to implement, by dividing them into 3 categories:

  • Category A: provisions that are supposed they have already been implemented in the national economies, since the date of entry into force of the Agreement (22 February 2017, i.e. after two-thirds of the WTO membership completed the domestic ratification process of the Agreement). An exception, however, was foreseen for LDCs, that benefited from an extension of 1 year from the entry into force of TFA (until 22 February 2018), for implementing such kind of provisions (art. 15.2 TFA);
  • Category B: provisions that WTO members will implement after an additional transitional period following the entry into force of the TFA. Developing members should have already notified their definitive date of implementation of measures classified within this category (on 22 February 2018 they had to notify the WTO with the definitive dates for their implementation), while LDCs can still notify implementation date until 22 February 2020 (a further extension of this deadline, however, can be requested).
  • Category C: provisions that WTO members will implement on a date after a transitional period following the entry into force of the TFA and requiring the acquisition of technical assistance and support for capacity building. The deadline for developing countries to provide definitive date of implementation for category C notifications is set for the 22 August 2019 , while LDCs have an additional year until 2022 to do so. (the detailed guide for notification is available here)

The article concludes that significant progress has been made by Asia-Pacific developing economies in implementing the TFA. In particular, 37 Asia-Pacific economies included in the analysis have, on average, notified 65% of the substantive provisions in the WTO TFA in category A, which means that 65% of the TFA trade facilitation measures has already been implemented in the region, a 6-percentage point increase from 2017.

Measures most notified in category B, i.e. indicating more time is needed for their implementation, are mainly related to Sub-article 1.4 “Notifications”, Sub-article 2.2 “Consultations” and Sub-article 6.1 “General Disciplines on Fees and Charges”, while most of measures notified under category C, i.e. requiring technical assistance and capacity building, are: Article 10.4 “Single Window”, Article 7.7 “Trade Facilitation measures for Authorized Operators”, Article 7.4 “Risk Management”, Article 10.3 “Use of International Standards” and Article 8 “Border Agency Cooperation”.

The article also points out that some developing countries are at risk of losing access to implementation flexibilities and technical assistance, as most of them have yet to notify definitive dates of implementation of some provisions within the deadline set for 22 August 2019.