Trade Facilitation Agreement (TFA)

 About

·       The Trade Facilitation Agreement (TFA) is the WTO’s first-ever multilateral accord that aim to simplify customs regulations for the cross border movement of goods.

·       The Protocol of the TFA was to be adopted by 31 July 2014 by the WTO.

·       Negotiations for it completed at Bali summit, 2013.

·       The TFA entered into force on 22 February 2017.

·       It is for both developing and developed countries. It is ratified by two-thirds members of WTO.

·       India became the 76th member to ratify the TFA of the World Trade Organization.

Objective of TFA

·       To expedite the movement, release and clearance of goods, including goods in transit.

·       To lowering import tariffs and agricultural subsidies.

·       To abolish hard import quotas.

·       To reduce red-tapism to facilitate trade by reforming customs bureaucracies and formalities.

Benefits of TFA

·       Estimates show that the full implementation of the TFA could reduce trade costs by an average of 14.3% and boost global trade by up to $1 trillion per year.

·       A Trade Facilitation Agreement Facility (TFAF) has been created to help ensure developing and least-developed countries obtain the assistance needed to reap the full benefits of the TFA.

·       It will increase customs revenues and reduce the incidence of corruption by greater transparency, improved governance and modernised border procedures

·       Reduction of documentary requirements, processing of documents before goods arrive, use of electronic payments, and quick release of perishable goods which can further reduce costs

Criticism of TFA

·       Since the TFA was pushed to be a non-binding document, rather a set of encouragements for developed, developing and least-developed countries to follow, it has left many developing and least-developed countries with doubts about whether the wealthier countries will fulfil their commitment of support.

·       Many developing countries thus are still unable to fully commit to ratifying into this agreement. 

·       Developed countries have been able to show commitment to the agreement as they have the capacity to satisfy its requirements. However many nations such as India and China have only committed to respectively 70–75% of the Trade Facilitation Agreements measures.

National Committee on Trade Facilitation (NCTF)

·       The NCTF was established in India on 11 August 2016.

·       It is a national level body to facilitate domestic co-ordination and implementation of TFA provisions.

·       NCTF is an inter-ministerial body on trade facilitation, chaired by the Cabinet Secretary. It is a three tier structure committee with the main national committee.

·       Its mandate is to finalize a National Trade Facilitation Action Plan and monitor the work of TFA implementation and domestic coordination in the country.

 

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