Trade Facilitation—A Boundless Opportunity for India

Abstract

While trade facilitation has a broader context encompassing a number of areas that can facilitate trade between countries, the thrust of the World Trade Organisation’s (WTO) Agreement on Trade Facilitation (TFA) focusses on key procedural issues such as transit, fees and formalities for export and import, and publication and administration of trade regulations.

Some of the arguments propounded for trade facilitation in a developing country like India are reduction in compliance costs, benefits for Micro Small and Medium Enterprises (MSMEs), obviation of procedural barriers, and improvement in infrastructure. Nevertheless, the history of the TFA negotiations suggests that many developing nations including India were not very enthusiastic since it was felt that an asymmetrical burden would be created on them for compliance. However, with the snail-paced progress on the Doha Development Agenda (DDA) and a slowdown in the multilateral negotiations, there was a push for concluding the TFA with a view of ensuring the relevance of the multilateral institution. The developing countries thus joined the bandwagon with the negotiations ensuring that their specific concerns were taken cognizance of and the texts were in line with their domestic regimes for those where commitments had to be made on entry into force. The flexibility to take longer transition periods, resulted in marginal improvements in the obligations above the domestic regimes. Finally, there was an additional flexibility of utilizing capacity building resources from other WTO Members to implement a third set of commitments.

The article explains the three parts into which the TFA has been divided into namely Section I on substantive trade facilitation disciplines, Section-II on Special & Differential Treatment provisions for developing countries and Least Developed Country Members, and Section III on Institutional Arrangements and Final Provisions. Section I which includes twelve Articles and 239 sub provisions of commitments have then been explained, specifically with reference to the commitments and their categories taken by India. These Articles include those on publication and availability of information, opportunity to comment, information before entry into force, and consultations, advance rulings, procedures for appeal or review, other measures to enhance impartiality, non-discrimination and transparency; disciplines on fees and charges imposed or in connection with importation and exportation and penalties, release and clearance of goods, border agency coordination, movement of goods intended for import under customs control, formalities connection with importation, exportation and transit; freedom of transit, and customs cooperation.

The focus is then on other aspects of the TFA, such as its entry into force, level of commitments by Members, India’s commitments, India’s implementation mechanism, and the progress made through the institutional mechanism. The work plan of the National Trade Facilitation Action Plan (NTFAP) has then been highlighted, including the role of the working groups on legislative changes, trade related infrastructure, outreach programmes, and time release study.

​Finally, the article highlights the progress made by India on trade facilitation in terms of the rankings on various indices and the domestic measures being undertaken. It ends with the focus on the boundless opportunity that trade facilitation offers, which we can ill-afford to miss.