Trade Facilitation Agreement, 2014
Table of Contents
The Trade Facilitation Agreement also known as the Protocol amending the Marrakesh Agreement was adopted in 2014 after successful negotiations between members of the World Trade Organization (WTO). However, it came into force on 22nd February 2017 when two-thirds of the WTO members ratified it. The agreement was ratified by Pakistan on 27th October 2015 making it the 51st WTO member to do so. The provisions of the TFA aim to expedite the movement, release, and clearance of goods, including goods in transit. In addition, it also sets out certain kinds of measures that all member states must adopt to enhance cooperation between their customs authorities and other relevant authorities involved in trade facilitation.
The TFA has a total of 24 Articles which establish the following obligations for member states to follow:
- Publication of information and its availability on the internet.
- Creation of enquiry points to allow other member states, traders, and other parties to get information or answers to their queries about the domestic system of a member state efficiently.
- Conducting consultations internally with traders and other relevant stakeholders before introducing new laws, regulations, and policies or when making amendments to existing instruments related to the movement, release, and clearance of goods including goods in transit.
- Establishing appeal and review systems against administrative decisions related to customs issues.
- Ensuring impartiality, transparency, and non-discrimination.
- Establishing disciplines on fees and charges for customs processing or with regards to importation and exportation.
- Facilitating release and clearance of goods including making provisions for electronic payments.
- Establishing risk management systems for customs control.
- Adopting post-clearance audit systems to ensure compliance with customs and other relevant laws.
- Introducing additional trade facilitation measures for authorised operators related to import, export, or transit formalities and procedures. These can take the form of less data or documentary requirements, low rate of physical inspections or examinations, deferred payments of duties, taxes, fees, or charges, etc.
- Developing mechanisms to ensure the expedited release of goods especially those which enter through air cargo facilities to those who apply for such treatment and maintain customs control.
- Develop mechanisms to expedite the release of perishable goods in the shortest possible time, and where appropriate outside business hours of customs and related authorities.
- Ensure that authorities and agencies for border control cooperate and coordinate with one another when dealing with the importation, exportation, and transit of goods.
- Allow goods intended for import to be moved within their territory under customs control from a customs office of entry to another customs office where goods may be released or cleared.
- Ensure simplification of formalities related to import, export, and transit and introduce policies to achieve simplification by considering changed circumstances, relevant new information, business practices, availability of techniques and technology, international best practice, etc. To this end, member states must allow for the acceptance of paper or electronic copies of supporting documents along with the relevant formalities.
- Integrate international standards for the import, export, and transit formalities and establish a single window to submit documentation or data requirements.
- Apply common customs procedures and uniform documentation for clearance of goods.
- Ensure that any formalities in connection with traffic in transit are not imposed if the circumstances which led to their introduction no longer exist or when such measures may be applied in a less trade-restrictive manner. Moreover, such formalities may not be applied where they constitute a disguised restriction on traffic in transit.
- Adopt measures that promote compliance and cooperation by traders and provide for self-correction without imposing harsh penalties while allowing the exchange of information.
World Bank’s Indicators on Trade Facilitation
Research by the World Bank notes that the modern era of international trade is becoming increasingly complex as supply chains span across countries and regions due to which trade has become a business that runs all year round and good performance requires improved infrastructure including roads, rail, sea, telecommunications, financial markets, and information processing. Thus, inadequate, or inefficient systems of transportation, logistics, and trade-related infrastructure can impede a country’s ability to compete in the global market. Due to this, the World Bank has developed certain indicators through which it assesses a country’s performance with regard to the development of mechanisms that facilitate trade. The indicators include customs, transport, agreements on trade in services, and applied regimes on trade in services. With regards to customs, Pakistan’s scores have been on a steady decrease from an increase to a score of 2.80 in 2012 to a score of 2.10 in 2018. With regards to transport which includes air transport and container port traffic, Pakistan’s scores have been fluctuating as Pakistan was scored 426 for air transport in 2006 which decreased to 192 in 2019. For container port traffic Pakistan’s scores have been on a steady increase from 2002 to 2019.
A comparison of Pakistan’s scores with those of neighbouring states has been presented below:
- Quality of Port Infrastructure