TWN Info Service on WTO and Trade Issues (Oct15/13)
20 October 2015
Third World Network

Less than half of total to bring TFA into force
Published in SUNS #8113 dated 15 October 2015

Geneva, 14 Oct (Kanaga Raja) - The total number of ratifications of the Trade Facilitation Agreement (TFA) received now covers 49 WTO members, or around 45 percent of the total needed to bring the Agreement into force, the final meeting this year of the Preparatory Committee on Trade Facilitation (PCTF) was told.

According to trade officials, the WTO Secretariat informed Members that since the last meeting of the PCTF on 11 June, the number of ratification instruments received has tripled.

Taking account of the fact that one of the ratifications - that of the European Union - covers 28 members, the total number of ratifications received now covers 49 WTO members, or around 45 per cent of the total needed to bring the TFA into force.

In addition to the EU, Hong Kong-China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Thailand and Togo have ratified the TFA.

The TFA needs ratification by at least two-thirds of the WTO members accepting the Protocol before it can be inserted as among the agreements in Annex 1A of the Marrakesh Treaty to make it binding on those ratifying it.

The Protocol of Amendment inserting the TFA into Annex 1A of the WTO Agreement was adopted by members at a General Council meeting on 27 November 2014 (see SUNS #7927 dated 1 December 2014).

The Protocol will enter into force in accordance with paragraph 3 of Article X of the WTO Agreement, when it is ratified by two-thirds of the WTO's membership of 161 members (as of 26 April 2015) and the acceptance instruments are lodged in the WTO before the TFA can enter into force (with its rights and obligations kicking in for the ratifying members).

No deadline has been set for when this will be achieved.

Trade observers have noted that at the current pace of the process of ratifications of the TFA, it seems unlikely that the Agreement will secure the two-thirds ratification needed in time for it to enter into force by the tenth ministerial conference of the WTO, to be held in Nairobi, Kenya, from 15-18 December.

Trade observers say that in the face of the current stance of the US, the European Union and their allies (and the WTO secretariat promoting US interests), many developing countries who will be providing facilities to enable US and EU corporations to dominate the markets of the developing countries, are in none too much of a hurry to undertake their domestic requirements for such ratifications.

Many of them are known to be regretting that, in adopting the Protocol to incorporate the TFA into Annex 1A, they have given away the collective leverage the developing countries had over the US, EU and Japan to deliver on their development commitments.

According to trade officials, the Chair of the PCTF, Ambassador Esteban Conejos of the Philippines, described the increasing number of ratifications as a "very welcome development".

The Chair said that he expected to have a substantial number of new ratifications when the committee next meets in February 2016.

Several WTO Members reported at the PCTF meeting on their domestic processes on accepting the TFA.

According to trade officials, Panama said its government was currently drafting a document that would allow it to deposit its TFA ratification instrument, well in advance of the Nairobi Conference.

Pakistan, Nigeria, Montenegro and Madagascar all outlined the state of their domestic procedures for ratification.

The Chair said since the last PCTF meeting in June, the committee has received new Category A notifications from Trinidad and Tobago, Barbados, Uganda, Belize, Lao PDR, Saint Lucia and the Seychelles, bringing the overall number of Category A notifications to 72.

(Category A contains provisions that a developing country Member or a least developed country Member designates for implementation upon entry into force of the Agreement, or in the case of a least developed country Member within one year after entry into force.)

According to trade officials, the meeting also heard a number of Members describing their efforts in carrying out the domestic reforms needed to meet their commitments under the TFA, as well as the challenges they have faced. These included China, Japan and Senegal.

The WTO Secretariat also provided to the meeting an update on the Trade Facilitation Agreement Facility (TFAF), which was launched by WTO Director-General Roberto Azevedo on 22 July 2014 and became operational on 27 November 2014.

The TFAF trust fund currently has approximately 800,000 Swiss francs, including 104,000 Swiss francs in support from Austria, and pledges of nearly three million.

With the Chair of the PCTF not anticipating any demand for input from the PCTF for the Nairobi Ministerial, the next meeting of the committee is set for 24 February 2016.