New WTO trade facilitation deal will spur trade, experts say

On February 22, the World Trade Organisation’s Trade Facilitation Agreement (TFA) finally came into force after being negotiated for nearly 10 years. The agreement which tasks 164 members of WTO to expedite the movement, release and clearance of goods across borders, launches a new phase for trade facilitation reforms globally and creates a significant boost for commerce and the multilateral trading system as a whole, according experts.

On February 22, the World Trade Organisation’s Trade Facilitation Agreement (TFA) finally came into force after being negotiated for nearly 10 years. The agreement which tasks 164 members of WTO to expedite the movement, release and clearance of goods across borders, launches a new phase for trade facilitation reforms globally and creates a significant boost for commerce and the multilateral trading system as a whole, according experts.

Rosine Uwamariya, the customs operations manager at Rwanda Revenue Authority (RRA), said the operationisation of the agreement is an opportunity for Rwanda to enhance its trade procedures and become more competitive.

“TFA calls for implementation of simple, harmonised and modernised international border procedures, which is key for cross-border trade,” she noted.

She added that implementation of the agreement means customs officials will be compelled to expedite the movement, release and clearance of goods, including goods in transit, without any delay.

Addressing members of the business community during a trade facilitation workshop last week in Kigali, Uwamariya said government is already implementing parts of the agreement and will continue to do so to further facilitate trade across the region. The workshop was organised by the Private Sector Federation and attracted more than 200 exporters and importers across the country.

According to Uwamariya, the agreement will increase transparency and access to customs documents, regulations and procedures, and will publicise other information required for small businesses to engage in trade.

For example, once fully-implemented, the agreement is expected to reduce trade costs by an average of 14.3 per cent, with developing countries like Rwanda as the biggest beneficiaries.

“We want to provide exporters and importers all the information about the new agreement as a matter of priority so that they can improve trade,” she said, adding that implementation of the TFA is also expected to help firms export for the first time.

Improving trade

Geoffrey Kamanzi, the PSF director for trade facilitation and business development, said the agreement is likely to help reduce the time needed to import and export goods since it mandates states to deal with bottlenecks that often make small and growing economies to trade on global stage.

The TFA prescribes many mechanisms to improve transparency and predictability of trading across borders and create a less discriminatory business environment which the private sector should take advantage of and increase trade, he told Business Times.

Dealing with NTBS

Meanwhile, Vincent Safari, the national coordinator at the Rwanda National Monitoring Committee on NTBs, said government will continue to work with stakeholders to ensure elimination of trade barriers to facilitate trade.

“Therefore, embracing the agreement is part of those strategies that will help create a more conducive business environment,” he said. He added that traders could continue losing millions if the question of NTBs is not addressed

He urged EAC partner states to avoid trade practices, customs procedures or impose any other measures that constitute NTBs.

He called on regional governments to review their procedures and practices to remove all categories of tariff barriers to facilitate cross-border trade.

Christine Rukera, a Kigali-based exporter, said the reforms on trade facilitation will reduce the cost of doing cross-border trade and help make it more profitable.

TFA will help eliminate red tape and bureaucratic delays for goods shipped across borders. This will help reduce the cost of doing business,” she said. Under the new agreement, small businesses could access more and new opportunities presented by international trade.

More about TFA

The TFA’s provisions include improvements to the availability and publication of information about cross-border procedures and practices, improved appeal rights for traders, reduced fees and formalities connected with the import/export of goods, faster clearance procedures and enhanced conditions for freedom of transit for goods.

The agreement also contains measures for effective cooperation between customs and other authorities on trade facilitation and customs compliance issues.

According to Uwamariya, some of the provisions call for improving access to information about cross-border procedures and practices, improved appeal rights for traders, reduced fees and formalities connected with the import/export of goods, faster clearance procedures and enhanced conditions for freedom of goods in transit.

“The agreement also contains measures for effective cooperation between customs and other authorities on trade facilitation and customs compliance issues, which we believe will help traders to understand business and become more efficient and competitive, she noted.”

According to the study by WTO, once the agreement is fully-implemented, developing countries are projected to increase the number of new products exported by as much as 20 per cent, with least developed countries likely to see an increase of up to 35 per cent.

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