The Agreement on Trade Facilitation

TFA has three parts. Section I lays out substantive disciplines, section II specifies SDT provisions and defines the approach taken to the implemen-tation of disciplines by developing countries and section III deals with institutional arrangements (WTO, 2014). TFA embodies a number of dis-ciplines on border clearance procedures and transit that complement ex-isting WTO rules on transit (GATT Article V), fees and formalities (GATT Article VIII) and transparency (GATT Article X). TFA therefore is limited in focus to matters that are under the purview of GATT – it does not ad-dress services-related dimensions of trade facilitation such as logistics, transport or distribution services and it does not re-open or extend specif-ic agreements on customs valuation, import lspecif-icensing, rules of origin, SPS or TBT. Specifically, TFA includes provisions on:

•Publication of information. Requirement to publish regulations on trade procedures, taxes, fees, etc.; best endeavour language on using the Internet (portals; websites) and creating national enquiry points;

•Opportunity to comment. WTO members to provide opportunities to comment on proposed new regulations relating to movement, release, clearance, etc., of goods;

•Advance rulings. Binding commitment to provide traders with advance rulings on a timely basis when requested to do so regarding tariff clas-sification and rules of origin;

•Appeal or review of decisions. Traders to have access to administrative and/or judicial review of decisions on customs matters; best endeav-our commitment to offer the same for decisions of other border man-agement agencies;

•Other measures to enhance impartiality, non-discrimination and trans-parency. Procedures to be followed when implementing enhanced SPS-related border controls;

•Fees and charges. Requirements on transparency (publication), permit-ted level of fees and charges (to be cost based) and the basis/process for imposition of penalties;

•Release and clearance of goods. Provisions on pre-arrival processing;

use of electronic payment; procedures allowing for separation of re-lease of goods from final determination of payment liability; adoption and use of risk management systems for clearance control; adoption/

use of post-clearance audits; efforts to track and publish average re-lease times; additional facilitation measures for “authorized operators”

on the basis of satisfying published criteria relating to risk and compli-ance track record; procedures allowing for expedited release of air cargo shipments; requirements pertaining to the release of perishable goods;

der posts and exchange of information/data;

•Formalities associated with cross-border movement of goods, includ-ing transit. Call for review of extant procedures from a trade facilita-tion perspective and adopfacilita-tion of the least trade restrictive measure to achieve underlying policy objectives; acceptance of copies of docu-ments already provided; use of international standards where possible;

work to establish “single window” systems (one-stop shops); a ban on mandatory PSI for classification/valuation (see ection 4 above); a ban on introduction of new requirements mandating the use of customs brokers; provisions on treatment of rejected goods and use of tempo-rary admission programmes for inward/outward processing of goods;

•Freedom of transit. Prohibition on non-transport-related fees or seek voluntary restraints; disciplines on inspection and guarantee schemes;

•Customs cooperation. Provisions calling for sharing of information on best practice and on cooperation between customs agencies to ex-change information on consignments.

Many of these provisions are not enforceable as they constitute a mix of binding and best endeavour commitments. A comparison of the simple count of the latter (defined as provisions using the word “should”) with related WTO agreements on customs valuation and import licensing sug-gests that TFA has about twice as many such provisions. Thus, there is less emphasis on “hard law” and more of a focus on achieving a set of good practices (Hoekman, 2016). Even here much depends on the specific commitments made by developing countries. TFA recognizes differences in implementation capacity across countries, letting governments deter-mine themselves which elements they implement and when. It also recog-nizes that some provisions will require resources to implement, and that some countries will need assistance. An innovation in this regard was to link the implementation of such provisions to the provision of technical assistance and Aid for Trade. These features of TFA imply that a very sig-nificant degree of policy space is built-in (it is up to governments to deter-mine when they will implement). Moreover, insofar as implementation is costly, developing countries will be able to request assistance. If this is not provided, the associated provisions of TFA – insofar as they are binding as opposed to best endeavour commitments – cannot be enforced through the WTO dispute settlement mechanism.³²

32Hoekman (2016) provides a detailed discussion and assessment of TFA. De Melo and Wagner (2016) provide estimates of the tariff equivalent of customs delays using OECD trade facilitation indicators.

TFA does nothing to constrain the use of regulatory policies that goes be-yond what is already in the WTO rules. The focus of the various provisions of TFA is on processes through which tariffs and a variety of NTMs are en-forced at the border. Most of the procedural requirements and standards listed in TFA reflect good regulatory practices. Many were developed un-der the auspices of the World Customs Organization. The provisions are likely to be welfare-improving because they reflect international agree-ment in that they comprise good practices and because sequencing and timing of implementation is tailored to the situation of each country – as determined by the national government – and can be (and has been) linked to the provision of technical assistance.

The extensive use that developing countries can make and have made of self-defining when specific provisions will be implemented, and the scope to link this to having obtained the requisite technical assistance, means that donors and international development agencies will be required to devote resources to help countries to attain the standards established in the relevant parts of TFA. Although it is up to each government concerned to define which provisions are implemented and, when there is still a choice to be made within the set of provisions, which elements should be prioritized, from a technical assistance provider perspective the agen-da has been defined by what is in TFA. However, the trade facilitation-re-lated technical assistance agenda at the country level goes far beyond the TFA provisions – it includes infrastructure, logistics and transport servic-es, support to enhance firm-level capacity to satisfy product standards, and so forth. This raises the question of how scarce financial resources should be allocated – whether grant-based aid or national tax resources. A nar-row TFA compliance perspective can be justified only if the TFA provisions are in fact priorities, or, if not, the donor resources required are fully ad-ditional. The latter condition is of course very unlikely to be satisfied and in any event impossible to monitor or determine in the absence of an ear-marked funding mechanism.

Although TFA is a multilateral agreement that signatories have commit-ted themselves to implement it is important that assistance providers do not limit the focus on TFA. Instead, from a trade cost/trade facilitation perspective there is an important opportunity to build on and leverage TFA mechanisms. Among the institutional requirements is the establish-ment of a national trade facilitation committee to assist in domestic co-ordination across agencies involved in border management and support the implementation of the agreement. National trade facilitation com-mittees could be designed to complement national institutions that have been tasked with streamlining NTMs and ex ante and ex post assessment

proposed NTMs – including regulatory impact assessments and reviews – are important instruments to reduce trade costs if they include a focus on this dimension (Cadot et al., 2012; 2013 Cadot and de Melo, 2014). However, such instruments tend to focus (appropriately) on the substance of the as-sociated regulatory requirements (or proposed measures). They tend to fo-cus less on how the NTMs are applied by the responsible agencies than on reform (is the NTM required? is it effective?), and on ensuring good reg-ulatory practices such as transparency, consultations and use of interna-tional standards where these exist.

6.2 Trade facilitation priorities and design of technical