Less than half of total to bring TFA into force

The WTO’s new Trade Facilitation Agreement has so far secured only under half the number of ratifications required for it to come into force, making it unlikely that the treaty will take effect by the time of the Nairobi Ministerial Conference.

by Kanaga Raja

GENEVA:  The  total  number of ratifications of the Trade Facilitation Agreement (TFA)  received now covers 49 WTO members, or around 45% of the total needed to  bring the Agreement into  force,  the final  meeting this year of the WTO Preparatory Committee on Trade Facilitation (PCTF) was told.

According to trade officials, the WTO secretariat informed PCTF members on 13 October that since the last meeting of the committee on 11 June, the number of ratification instruments received had 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.

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 WTO Agreement 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 WTO General Council meeting on 27 November 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. Only then can the TFA 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.

Regret

Trade observers have noted that at the current  pace  of ratifications, it seems unlikely that the Agreement will pass the two-thirds threshold in time for it to enter  into  force by the 10th 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 EU and their allies (and the WTO secretariat promoting US interests), many developing countries – which, under the TFA, would be providing facilities to enable US and EU corporations to dominate developing-country markets – are in none too much of a hurry to undertake their domestic requirements for ratification.

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, the EU and Japan to deliver on the latter’s 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.

The Chair also said that since the last PCTF meeting in June, the committee had 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 or LDC member designates for implementation upon entry into force of the Agreement or, in the case of an LDC 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. (SUNS8113)                      

Third World Economics, Issue No. 601/602, 16 September -15 October 2015, p7