WTO Trade Facilitation Agreement - UN ESCAP WTO Trade Facilitation... · The WTO Trade Facilitation...

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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

Transcript of WTO Trade Facilitation Agreement - UN ESCAP WTO Trade Facilitation... · The WTO Trade Facilitation...

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: [email protected]

The Government of the Republic

of

the Union of Myanmar

International trade transaction process

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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

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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

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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

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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

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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)

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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

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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

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Review of section I - Substantive Provisions

Review of Article 11: freedom of transit Improvement versus article V of GATT

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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

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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

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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

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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

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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)

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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)

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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)

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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)

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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)

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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

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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

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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]