unctad.org | Why both Developing and Developed Countries must have a National Trade Facilitation Committee
Why both Developing and Developed Countries must have a National Trade Facilitation Committee
25 February 2020
Written by: Arántzazu Sánchez
Article No. 44 [UNCTAD Transport and Trade Facilitation Newsletter N°85 - First Quarter 2020]

Article 23.2 of the WTO Trade Facilitation Agreement (TFA) obliges all WTO Members to “establish and/or maintain a National Trade Facilitation Committee (NTFC) or designate an existing mechanism to facilitate both domestic coordination and implementation of the provisions of this Agreement”.

When interpreting the Agreement, we might ask ourselves:

  • What is the NTFC supposed to do if the provisions of the Agreement are already in place, like for instance in developed countries?

  • Should countries that have notified to have implemented all provisions of the Agreement, maintain such coordination mechanism?

As for many legal documents, the devil is in the details and the TFA is no different.

Transport and Trade Facilitation

1.    Trade facilitation is a never-ending endeavour

There will always be possibilities to simplify, harmonise, standardise and make trade procedures more transparent, particularly considering technological innovations. Moreover, implementation of many provisions in the Agreement require a periodic review and, as such, NTFCs can be key in ensuring the domestic coordination of this process:

Creating more transparent procedures requires a constant effort

In the coming years, import, export and transit laws, regulations and procedures will be changed according to the different needs of the trading industry, the application of enabling technologies and the challenges faced by the public administration. As such, it will be key to have a body that oversees that the information published and available on the internet (as required in Article 1 of the WTO TFA) is constantly updated by the various stakeholders. This is a role that can be assumed by the NTFC.

Simplification, Standardisation and Harmonisation are dynamic concepts

Article 6.1.4 states that “each Member shall periodically review its fees and charges with a view to reducing their number and diversity, where practicable.” The word periodically means that the revision should take place at regularly occurring intervals and the NTFC can oversee the domestic coordination of this revision.

Another example of regular ongoing functions is included in Article 10.3 of the WTO Trade Facilitation Agreement in which, WTO members “are encouraged to use relevant international standards or parts thereof as a basis for their import, export or transit formalities and procedures”. The NTFC could be responsible of identifying existing or new relevant international standards and providing recommendations to the different agencies on whether the implementation of those would be feasible and advisable.

2.    Other imperishable roles of NTFCs

For many countries, NTFCs have become the instrument enabling the implementation of Article 2.2 of the WTO Trade Facilitation Agreement. This Article obliges Member States to “provide for regular consultations between its border agencies and traders or other stakeholders located within its territory”. At such, NTFC will constitute a permanent platform to ensure private-public dialogue

Another function often assumed by the NTFCs is donor coordination. As the organ steering the implementation of the provisions of the TFA as well as other trade facilitation measures, NTFCs from developing and Least Developed Countries (LDCs) are in a privileged position to fulfil the role of channelling donor support for trade facilitation reforms. In countries where the figure of the national donor coordinator officially exists, it is important that (s)he becomes a regular member of the NTFC.

UNCTAD’s research shows that 38 per cent of NTFCs are always or frequently acting as donor coordinator for trade facilitation initiatives. This figure goes up to 53% in LDCs and 33 per cent in developing countries. Considering that LDCs require, in general, more assistance than developing countries, it could be concluded that, the more technical assistance a country needs, the greater importance of NTFCs assuming the role of donor coordinator.

3.    Should NTFCs also assume the role of donor coordination in developed countries?

NTFCs in developed countries never or rarely fulfil the role of donor coordinator. As traditional providers of trade aid, developed countries have mechanisms in place to deliver financial support and technical cooperation in the field of trade facilitation.

As per the Articles 22.1 and 22.2 of the TFA, developed countries are obliged to notify to the WTO Trade Facilitation Committee “information on its assistance and support for capacity building that was disbursed in the preceding 12 months and, where available, that is committed in the next 12 months” as well as “the contact points of their agencies responsible for providing assistance and support for capacity building and information on the process and mechanisms for requesting assistance and support for capacity building”.

Despite these obligations, a quick look at the WTO Trade Facilitation Agreement website shows that, in many cases, donor members have not provided the requested information. This might be due to a lack of clarity on which organisation within the donor member is supposed to provide such information. For many of those countries, trade facilitation support is scattered through different agencies and ministries. A body centralising all requests of technical assistance in this field and reporting about them might not exist. As such, the coordination and collection of information might be a challenging task and having the NTFC looking over this could be a great asset.

To conclude, NTFCs are needed and justifiable, in developing and developed countries alike, and whether the TFA is fully implemented or not. They have the role of overseeing and coordinating trade facilitation reforms within the framework of the TFA and beyond TFA compliance. Trade facilitation reforms aim at simplifying, harmonising, standardising and making trade procedures more transparent and, as such, they are a constant endeavour not a one-off activity. Consequently, NTFCs need to be permanent platforms, coordinating national efforts to make trade, every day, a little bit cheaper, faster and simpler for the benefit of the society as a whole.

For further information click here: UNCTAD Empowerment Programme for National Trade Facilitation Bodies

Contact: Arantzazu Sanchez ¦ Trade Facilitation Section ¦ Arantzazu.sanchez@unctad.org

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