The last instalment of this column for 2014, published on December 12, 2014, was simply titled ‘Trade facilitation’. This article, the final column for 2016, is also devoted to trade facilitation and deals specifically with the World Trade Organisation (WTO) Trade Facilitation Agreement (TFA). This time around, however, there is much urgency; it is a call to preparedness. But before I get to the urgency, allow me to provide you with a bit of background. If you need more details, the 2014 column will provide that.

The term ‘trade facilitation’ burst onto the international trade stage during the WTO’s Ninth Ministerial Conference, which was held in Bali, Indonesia, from December 3 to 7, 2013. The intriguing thing is that there is no universally accepted definition for ‘trade facilitation’. This is most surprising, isn’t it? Nonetheless, ‘trade facilitation’ tends to be understood as the simplification and harmonisation of international trade procedures, including import and export procedures.

Trade facilitation is part of the yet-to-be-concluded Doha Development Round, which started in 2001 and was the first agreement to be reached in the Doha Round. On December 6, 2013, WTO members concluded negotiations regarding a TFA. The TFA contains provisions for expediting the movement, release and clearance 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. It further contains provisions for technical assistance and capacity building in this area.

According to the WTO’s 2015 economic analysis, the full implementation of the TFA is expected to reduce members’ trade costs by an average of 14.3% and to boost global merchandise exports by up to $1-trillion a year by reducing trade costs and cutting red tape at the border.

Immediately following the WTO Ministerial Conference, the World Customs Organisation’s (WCO’s) policy commission adopted the Dublin Resolution at its meeting on December 11, 2013, which committed the WCO to the efficient imple- mentation of the TFA. Following lengthy delibera- tions, the WTO’s general council, on November 27, adopted the protocol of amendment to the TFA, inserting the TFA into Annex 1A of the WTO Agreement, which is considered a critical step in the implementation of the TFA.

The TFA will come into force once two-thirds of members have completed their domestic ratification process. It is all fine and well, but how many members need to ratify it? Well, at last count – as at July 29 – the WTO had 164 members. A simple calculation returns 109.34 members, which the WTO rounds up to 110. On November 28, Mongolia became the latest – one-hundredth – member to ratify the TFA, which means only ten more members need to ratify the TFA for it to come into force.

The member countries that have ratified the TFA (not listed in alphabetical order) are Hong Kong China, Singapore, the US, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member States), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Vietnam, Brunei, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica and Mongolia.

More information on the ratification of the TFA is available on the WTO Trade Facilitation Agreement Facility (TFAF) website, http://www.tfafacility.org. The TFAF was launched on July 22, 2014, and became operational on November 27, 2014, when members adopted the protocol of amendment to insert the WTO TFA into Annex 1A of the WTO Agreement. It was created at the request of the WTO’s developing and least-developed country (LDC) members to help ensure that they receive the assistance they need to reap the full benefits of the TFA and to support the ultimate goal of full implementation of this new agreement by all members. A second valuable resource to consult is the WTO’s Trade Facilitation page: https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm.

Were you able to spot any obvious absentees from the list of 100 countries that have ratified the TFA? To assist you, let us look at it from a different perspective – by identifying the remaining 64 member countries. Just in case you thought that there is a website that lists the members – well, there is none. So, I had to prepare this list from scratch. This took a bit of time, but here are the members countries: Angola, Antigua and Barbuda, Argentina, Armenia, Barbados, Benin, Bolivia, Burkina Faso, Burundi, Cabo Verde, Cameroon, Canada, the Central African Republic, Chad, Colombia, Congo, Costa Rica, Cuba, the Democratic Republic of Congo, Djibouti, the Dominican Republic, Ecuador, Egypt, European Union (EU), Fiji, Gabon, Gambia, Ghana, Guatemala, Guinea, Guinea-Bissau, Haiti, Indonesia, Israel, Jordan, Kuwait, Kyrgyz Republic, Liberia, Malawi, Maldives, Mauritania, Mongolia, Morocco, Mozambique, Namibia, Nepal, Nigeria, Oman, Papua New Guinea, Qatar, Rwanda, Saint Vincent and the Grenadines, Sierra Leone, Solomon Islands, South Africa, Suriname, Tajikistan, Tanzania, Tonga, Tunisia, Uganda, Vanuatu, Venezuela, and Yemen.

The member countries that I would have expected to appear on the list are Argentina, Canada, Egypt, Indonesia, Israel, Morocco, Namibia, Nigeria, Qatar and South Africa. That my list comprises members is purely coincidental, as it was not my intention to identify ten members.

While the EU ratified the TFA as a bloc, other trade blocs, such as the Southern African Customs Union, the Southern African Development Community, the North America Free Trade Agreement and a number of other blocs, did not ratify the TFA. What are the reasons for that?

I must admit that I am quite puzzled as to why South Africa has not ratified the TFA. Somehow, I doubt that South Africa will do so. This is just a hunch of mine, as my perception is that South Africa has been less than excited about the TFA.

With ten more countries required to ratify the TFA for it to come into force, and assuming that no more countries join the WTO, only 15.63% of the remaining 64 WTO member countries need to ratify the TFA for it to enter into force. I am quite certain that the WTO will continue its concerted effort to convince the remaining members to ratify the TFA. In my view, a major reason for the WTO to take this course of action is that it is in desperate need of success, something which the TFA could provide. This is particularly due to the lack of progress with respect to the Doha Round, which started in 2001. Yes, in 2001. Since the TFA was the first agreement to have been reached in the Doha Round, its entering into force would be heralded as a great achievement. Some commentators believe it might even be the salvation of the Doha Round.

With the entering of the TFA into force early in 2017 a real possibility, are you prepared for it? Do you even know what the TFA is all about? If you are involved in inter- national/cross-border trade, then you would do well – if you have not already done so – to allocate some time to learning more about it.

HS2017 – Prepare for It
It is only days before January 1, 2017. Are you prepared for it? Tariffwise, that is. On December 2, the South African Revenue Service (Sars) announced that the 2017 version of the Harmonised System (HS) Nomenclature – which is simply known as HS2017 and was first published for comment on May 3, will enter into force on January 1, 2017. Copies of the HS2017 tariff amendments are easily assessable from the Sars website.
The next HS nomenclature update will come into force in 2022, as these updates occur at regular five-year intervals.