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WTO’s Trade Facilitation Agreement comes into effect

The Trade Facilitation Agreement (TFA) in Goods of World Trade Organisation (WTO) came into effect with its ratification by two-thirds members of WTO including India.

The TFA in Goods was adopted by the WTO Members in 2014. It aims to streamline, simplify, standardise and ease customs procedures and norms. It will help to cut trade costs around the world.

About Trade Facilitation Agreement (TFA)

  • The TFA in Goods is the WTO’s first-ever multilateral accord that aims to simplify customs regulations for the cross-border movement of goods.
  • It was outcome of WTO’s 9th Bali (Indonesia) ministerial package of 2013. The agreement includes provisions for
  • Lowering import tariffs and agricultural subsidies: It will make it easier for developing countries to trade with the developed world in global markets.
  • Abolish hard import quotas: Developed countries would abolish hard import quotas on agricultural products from the developing world and instead would only be allowed to charge tariffs on amount of agricultural imports exceeding specific limits.
  • Reduction in red tape at international borders: It aims to reduce red-tapism to facilitate trade by reforming customs bureaucracies and formalities.
Comment

The implementation of the TFA in Goods has the potential to create US 1 trillion dollars’ worth of global economic activity and trade which may add 21 million new jobs and lower the cost of doing international trade by 10 to 15 per cent. TFA will help India’s ongoing reforms to bring in simplification and enhanced transparency in cross border trade in goods. It will further help India to boost economic growth by reducing trade costs and supporting its integration into the global economy.

Trade Facilitation in Services (TFS) Agreement

  • Recently, India submitted a legally vetted proposal on Trade Facilitation in Services (TFS) Agreement, a global services pact on the lines of the TFA in Goods to the WTO.
  • Now the proposal for TFS Agreement will be taken up by an expert committee at the WTO headquarters in Geneva and later it will be put up for discussion among all the WTO members.
  • It aims to ease norms for movement of skilled workers across borders for short-term work, ensure portability of social security contributions, single window mechanism for foreign investment approvals and cross-border insurance coverage to boost medical tourism.

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India to pitch Trade Facilitation in Services at WTO

India will make a presentation on the proposed Trade Facilitation in Services (TFS) Agreement to World Trade Organisation (WTO) Director General Roberto Azevedo and India Inc.

The global pact proposed by India to boost services trade at the WTO-level aims to ease norms including those relating to movement of foreign skilled workers and professionals across borders for short-term work.

The proposed services pact is similar to the Trade Facilitation Agreement (TFA) in Goods adopted by the WTO Members in 2014 at Bali Summit to ease customs norms for boosting global goods trade.

Some proposed features TFS Agreement
  • Covers measures across all modes of supply for services delivery in cross-border trade, related to entry into the market as well as those applied post-entry.
  • Seeks to ensure portability of social security contributions, as well as make sure charges or fees for immigration or visas transparent, reasonable and non-restrictive in nature.
  • Pave the way for a single window mechanism for foreign investment approvals. Ensure cross-border insurance coverage to boost medical tourism.
  • Ensure publication of measures impacting services trade and timely availability of relevant information in all the WTO official languages as well as free flow of data and information for cross-border supply of services.

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First meeting of NCTF held in New Delhi

The first meeting of National Committee on Trade Facilitation (NCTF) was held in New Delhi to discuss ways for developing roadmap for implementation of WTOs trade facilitation agreement.

It was headed by Cabinet Secretary P K Sinha and was attended by all 24 members along with secretaries of various ministries and departments like Home, Shipping, Civil Aviation.

What is National Committee on Trade Facilitation (NCTF)?

The NCTF is a mandatory requirement under the WTOs Trade Facilitation Agreement (TFA).  It is a national level body to facilitate domestic co-ordination and implementation of TFA provisions. It aims to develop the pan-India road map for trade facilitation. It will have three tier structure with main national committee for monitoring implementation of TFA.

What is Trade Facilitation Agreement (TFA)?

TFA is the WTO’s first-ever multilateral accord that contains provisions for expediting the movement, clearance and release 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.

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