MoC prepares to table TFA in Parliament

Kathmandu, September 24

The Ministry of Commerce (MoC) is preparing to table the Trade Facilitation Agreement (TFA) in the Parliament for its ratification.

The TFA was signed by the World Trade Organisation (WTO) member states in 2013 during Bali ministerial meet. It 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 concerned authorities on trade facilitation and customs compliance issues.

For the agreement to come into force, it needs to be ratified by two-thirds of the WTO member states. Till date, 93 member nations have ratified the TFA.

“We are all set to table the TFA in the Parliament for ratification, which will pave the way for technical assistance and capacity building support for least developed countries (LDCs) like us from the developed nations and multilateral banks,” said Commerce Secretary Naindra Prasad Upadhyay.

The TFA also has provisions to improve transparency, increase possibilities to integrate small and medium industries in the global value chain, and reduce the scope of ‘red tape’ that still exists while moving goods across borders and which poses a particular burden on small and medium-sized enterprises.

TFA also contains special and differential treatment (SDT) provisions that allow developing and LDC members to determine when they will implement individual provisions of the agreement and to identify provisions that they will only be able to implement upon the receipt of technical assistance and support for capacity building.

“There are three categories of technical measures for capacity and trade competitiveness enhancement. The first is what the LDCs and developing countries can implement immediately to facilitate trade,” informed Upadhyay.

“The second category contains measures they can implement but require a certain span of time to implement and the third category is the area for which the LDCs and developing nations require support from development partners to implement the measures.”

To benefit from SDT, a member must categorise each provision of the agreement and notify other WTO members of these categorisations in accordance with specific timelines outlined in the pact.

Hence, Nepal has also prepared its gap analysis report to implement trade facilitation measures as WTO member states have agreed to provide support and additional time, especially for LDCs and developing countries to implement all 36 measures.

The gap analysis report has identified the measures that the country itself can implement within one year of the agreement coming into force (category A); some measures needing additional time of two years for implementation (category B); and measures it cannot implement without additional time and external support (category C).

Category C includes measures that the country will be able to implement within five years only.

Nepal has put two measures that are fully aligned — pre-shipment inspection and better management of customs brokers to shorten the clearance time of goods at customs — under category ‘A’, as per MoC. Pre-shipment inspection has been identified as one of the measures that will help the customs prepare tariff classification and customs valuation of the goods that would be delivered in the country.

The MoC had concluded all the ministry level homework to forward the TFA to the Cabinet for its nod prior to tabling it in the Parliament. The process had been stalled due to the change in government.