In support of TFA implementation

If implemented, the World Trade Organization’s Trade Facilitation Agreement (TFA) could give a significant boost to international trade, says Kunio Mikuriya, Secretary General, World Customs Organization
Kunio Mikuriya has been Secretary General of the World Customs Organization (WCO) since 2009. Prior to joining the WCO, he worked for Japan’s Ministry of Finance for 25 years. There, he served as Director of Enforcement, as well as Director of Research and International Affairs, paving the way for the conclusion of the first regional trade agreement for Japan. In addition, he spent time as a counsellor at Japan’s mission to the World Trade Organization, and took part in the General Agreement on Tariffs and Trade (GATT) Uruguay Round trade negotiations.
At the ninth ministerial meeting of the World Trade Organization (WTO) in Bali, Indonesia, in December 2013, ministers adopted ‘the Bali Package’ under the framework of the Doha Development Agenda. The Bali Package included the Trade Facilitation Agreement (TFA), which consists of measures that would increase the efficiency of border agencies such as customs. 

In July 2014, however, the future of the TFA was thrown into doubt when WTO members were unable to adopt the protocol of amendment to insert the TFA into Annex 1A of the WTO Agreement. 

Despite this setback, the World Customs Organization (WCO) remains committed to supporting customs administrations worldwide with their trade facilitation reforms, regardless of what happens in Geneva. In addition, as Secretary General of the WCO, I call on G20 leaders to do their utmost to put the TFA back on track. This article outlines the WCO’s trade facilitation strategy going forward.

TFA benefits and the WCO’s role
The WCO’s TFA strategy was set in Ireland when the WCO Dublin Resolution was adopted in December 2013. The Dublin Resolution stipulates that the WCO will work in close coordination with the WTO, provide technical assistance and capacity-building to customs administrations based on WCO instruments and tools, and enhance communication activities to trumpet the importance of trade facilitation to policymakers and business leaders worldwide. 

The potential gains from implementation of the TFA are substantial, especially for countries that have yet to apply its principles. According to some analysis, developing countries are expected to save around $325 billion a year, including the acceleration of their integration into global value chains. Moreover, according to the Organisation for Economic Co-operation and Development (OECD), developed countries stand to gain a 10 per cent cut in their trade costs, including easier trade flows for businesses.

The TFA thus presents a great opportunity for modernising customs administrations, boosting international trade and strengthening the economic competitiveness of countries across the globe. The WCO brings to the table international customs standards, an understanding of divergent local conditions, the ability to coordinate with relevant stakeholders, a worldwide network of customs experts and long-standing support for trade facilitation globally. 

The role of the WCO is specifically recognised in article 13.1 of section I of the TFA. It states that the WTO Committee on Trade Facilitation shall maintain close contact with the WCO “with the objective of securing the best available advice for the implementation and administration” of the TFA, and “to ensure that unnecessary duplication is avoided”. 

At the WCO, the practical aspects of meeting expectations arising from the TFA discussions are being taken up by the WCO Working Group on the WTO TFA, with the goal of ensuring a harmonised approach by customs in implementing the agreement. The group met for the first time in March 2014. It brought together delegates from WCO members’ customs administrations, trade ministries and finance ministries, as well as representatives from the WTO, international organisations and the private sector, who shared views on the implementation of the TFA.

WCO instruments and tools
WCO instruments and tools are fully consistent with the TFA and would support its implementation. The WCO’s Revised Kyoto Convention (RKC), the Harmonized System and many tools provide for simplified customs procedures and improved border-management processes, as well as a more predictable and transparent trade environment for legitimate cross-border trade. 

To support an understanding of the linkages between the TFA and WCO instruments and tools, the WCO released an implementation guidance tool on its website. For each TFA article, it contains the following categories of information: overview, text of the TFA article, relevant RKC standards and RKC guidelines; other relevant WCO tools; member practices; and performance indicators. 

WCO instruments and tools support the adoption of a coordinated approach through mechanisms such as the ‘Single Window’ concept. Key tools in this domain are the Time Release Study guidelines that identify problem areas from the arrival of the goods to their release, and the WCO data model, which facilitates the efficient exchange of information between business and governments by offering standardised data required by customs and other border-control agencies.

Technical assistance and capacity-building
Section II of the TFA provides for assistance to be given todeveloping and least-developed countries in the WTO  to support updating their infrastructure, training their customs officials, and assisting them in any way that would help in ensuring the implementation of the TFA. 

 The role of relevant international organisations, including the WCO, in providing technical assistance and capacity-building is also explicitly defined in the TFA context. In this respect, the WCO has launched the Mercator Programme, which is aimed at assisting governments worldwide to implement trade facilitation reforms by using core WCO instruments and tools. With a wealth of expertise and experience in global customs technical assistance and capacity-building, including a network of experts at its disposal and comprehensive donor-engagement mechanisms, the Mercator Programme provides tailor-made support. Based on a long-standing history of cooperation with the WTO, other international organisations and the private sector, it provides a consolidated platform for coordinating the needs and priorities of all stakeholders.

Although, at the time of writing, the TFA is regrettably in doubt, the WCO remains optimistic that the logjam will be broken. Regardless of future developments, the WCO will continue to provide trade facilitation, technical assistance and capacity-building to customs administrations under the WCO Mercator Programme. 

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