Trade Facilitation agreement- details and implementation

Trade Facilitation agreement

  • TFA is divided into three parts.

Section 1

  • contains provisions on simplification of border clearance procedures and adoption of new transparency measures and consists of 12 Articles. These 12 Articles extend to several agencies such as Customs, Border Control, Shipping, Plant and Animal Quarantine etc all of which require inter-ministerial cooperation and coordination;

Section 2

  • of TFA is focused on special needs and requirements of developing country members and Least Developed Country (LDC) members for implementing TFA. Such a member country would have flexibility to determine which commitments to implement immediately upon entry into force of the TF Agreement and which it wants to implement in a phased manner. This Section allows each development country to categorize the provisions of Articles 1-12 of the TFA into three categories ‘A’, ‘B’ and ‘C’.
  1. Category A contains provisions that a developing country member designates for implementation upon entry into force of this agreement or in case of LDC member within one year after entry into force;
  2. Category B contains provisions that a developing country member or LDC member designates for implementation on a date after a transitional period of time following the entry into the force of this agreement.
  3. Category C contains provisions that a developing country member or a LDC member designates for implementation on a date after a transitional period of time following the entry into the force of this agreement and requiring the acquisition of implementation capacity through the provisions of assistance and support for capacity building.

Section 3

  • deals with institutional mechanism for setting-up a National Committee on Trade Facilitation for domestic cooperation and implementation.

Current status

  • India has notified its Category ‘A’ commitments to the WTO
  • has ratified the TFA domestically and would be depositing the instrument of ratification to WTO by end of April 2016
  • India has also initiated the process to set-up a National Committee on Trade Facilitation (NCTF) to domestically coordinate and implement the TFA.
  • The NCTF would institutionalize the co-ordination mechanism in such a manner the 35 plus Departments, private players and State Governments who have international borders are on the same page as far as the trade facilitation is concerned.

Advantages of TFA

  • Through trade facilitation member countries would seek to simplify trade procedures and help promote cross border trade, bring greater predictability to traders and help improve the overall climate for trade and investment.
  • Trade Facilitation Agreement (TFA) envisages faster clearances and reduction of red tapism at the borders and would thereby help in the ease of doing business.
  • Ratification of the TFA is bound to change the Indian trade and would bring more transparency in trade process.
  • After TFA ratification, the world wide best trade practices would be shared among the member countries.
  • TFA is supposed to enable domestic manufacturers, particularly Small and Medium Enterprises, connect more easily to regional and Global Value Chains.
  • TFA contains provisions 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.
  • These objectives of TFA are in consonance with India’s ease of doing business initiative.

Needs to be done

  • In several areas, we need to ensure speedy legislation so that there are visible beneficial outcomes.
  • Industry and its various associations need to be associated in the consultation process while implementing the different provisions of the TFA.
  • Adequate measures be taken to protect our domestic industries.
  • Pharmaceutical and chemical industries are polluting the environment and it must be ensured that sufficient measures including setting-up of treatment plants are taken in order to save the environment. Central Government should coordinate with the State Governments and monitor to ensure that these pharmaceutical and chemical industries should set-up treatment plants which are functional so that they do not contaminate the water and environment of surrounding villages
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