Status as of 20 May 2016
“[The Executive Council} calls upon the African member states of WTO to implement the Trade Facilitation Agreement as agreed at the 9th WTO Ministerial Conference . . . and requests} the Commission and Member States to engage concerned partners accordingly;”– Decisions of the Executive Council, 25th Ordinary Session of the AU Heads of State (June 2014)
What is the WTO Trade Facilitation Agreement?
In December 2013, WTO members concluded negotiations on a Trade Facilitation Agreement (TFA) at the Bali Ministerial Conference, as part of a wider “Bali Package”. In late November 2014, a protocol to integrate the TFA into the WTO agreement was formally adopted, and will enter into force once two-thirds of members have completed their domestic ratification process.
The 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, and contains first-of-its kind provisions for technical assistance and capacity building in this area.
Critically, the TFA allows developing countries to schedule their commitments for the provisions of the Agreement into 3 categories (A, B, and C) depending on their readiness to implement the provisions and their needs for technical assistance and capacity building.
|Provisions that the Member will implement by the time the Agreement enters into force (or in the case of a least-developed country Member within one year after entry into force).|
|Provisions that the Member will implement after a transitional period following the entry into force of the Agreement.|
|Provisions that the Member will implement on a date after a transitional period following the entry into force of the Agreement and requiring the acquisition of assistance and support for capacity building.|
Why is the TFA important for Africa?
“ A fundamental policy direction . . . is to go beyond liberalization to the actual creation of trade potential through developing a flawless trade facilitation environment.” – Boosting Intra-African Trade (BIAT) Action Plan, 18th Ordinary session of the AU Heads of State (January 2012)
The TFA is an important step forward to improve the trade facilitation environment and reduce the cost of trading across borders. It provides an agreed upon framework within which countries can shape their reform programs, and highlights many important issues that are deserving of policy attention and support from the international community.
Research by the United Nations Economic Commission for Africa (UNECA), highlights that improvements in trade facilitation can significantly boost Africa’s exports and increase the share of intra-regional trade. Tariffs have come down significantly in Africa over the last decade, but further investment needs to be done to reduce the time and cost of moving goods across borders.
The TFA helps to support the Boosting Intra-African Trade initiative (click here).