Trade Facilitation Agreement (TFA) To Boost 'Ease of Doing Business’ Initiative

Minister of State (Independent Charge) for Commerce & Industry, Mrs Nirmala Sitharaman said that Trade Facilitation Agreement (TFA) envisages faster clearances and reduction of red tapism at the borders and would thereby help in the ease of doing business. She said that ratification of the TFA is bound to change the Indian trade and would bring more transparency in trade process. She said that after TFA ratification, the world wide best trade practices would be shared among the member countries. She said while we have made rapid strides in streamlining our processes on the line of International best practices, in several areas, we need to ensure speedy legislation so that there are visible beneficial outcomes. The Minister said that industry and its various associations would be associated in the consultation process while implementing the different provisions of the TFA. Mrs. Sitharaman was addressing the Consultative Committee Meeting attached to her Ministry on the subject of ‘Implementation of Trade Facilitation Agreement’.

The Minister of State (Independent Charge) for Commerce & Industry, Smt. Sitharaman said through trade facilitation member countries would seek to simplify trade procedures and help promote cross border trade, bring greater predictability to traders and help improve the overall climate for trade and investment. She said that TFA is supposed to enable domestic manufacturers, particularly Small and Medium Enterprises, connect more easily to regional and Global Value Chains. She said that 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. Smt. Sitharaman said these objectives of TFA are in consonance with India’s ease of doing business initiative.

Earlier, a detailed presentation on Trade Facilitation Agreement and the issues concerning its implementation etc was made by Mr Dammu Ravi, Joint Secretary, Ministry of Commerce. He gave a detailed presentation highlighting the important provisions of TFA. He also gave a brief background on TFA of WTO, its importance, important provisions under TFA and various provisions with regard to its implementation among others. He said that TFA is divided into three parts. Section 1 contains provisions on simplification of border clearance procedures and adoption of new transparency measures and consists of 12 Articles. These 12 Articles extend to several agencies such as Customs, Border Control, Shipping, Plant and Animal Quarantine etc all of which require inter-ministerial cooperation and coordination; Section 2 of TFA is focused on special needs and requirements of developing country members and Least Developed Country (LDC) members for implementing TFA. Such a member country would have flexibility to determine which commitments to implement immediately upon entry into force of the TF Agreement and which it wants to implement in a phased manner. This Section allows each development country to categorize the provisions of Articles 1-12 of the TFA into three categories ‘A’, ‘B’ and ‘C’. Category A contains provisions that a developing country member designates for implementation upon entry into force of this agreement or in case of LDC member within one year after entry into force; Category B contains provisions that a developing country member or LDC member designates for implementation on a date after a transitional period of time following the entry into the force of this agreement. Category C contains provisions that a developing country member or a LDC member designates for implementation on a date after a transitional period of time following the entry into the force of this agreement and requiring the acquisition of implementation capacity through the provisions of assistance and support for capacity building. Section 3 deals with institutional mechanism for setting-up a National Committee on Trade Facilitation for domestic cooperation and implementation.

India has notified its Category ‘A’ commitments to the WTO and has ratified the TFA domestically and would be depositing the instrument of ratification to WTO by end of April 2016. India has also initiated the process to set-up a National Committee on Trade Facilitation (NCTF) to domestically coordinate and implement the TFA. The NCTF would institutionalize the co-ordination mechanism in such a manner the 35 plus Departments, private players and State Governments who have international borders are on the same page as far as the trade facilitation is concerned.

Later the Members of the Consultative Committee participated in the discussion and gave various valuable suggestions. Shri Ajay Sancheti, Member (Rajya Sabha) said while implementing WTO Agreement on TFA, adequate measures be taken to protect our domestic industries. Replying to this suggestion of the Member, Smt. Rita Teaotia, Secretary, Ministry of Commerce said that measures such as anti dumping, safeguard duty and counter-veiling etc are being taken by the Government from time to time to protect our domestic industries.

Another Member, Mr P. Goverdhan Reddy, Member (Rajya Sabha) said that dumping of bulk drugs by other countries are causing problems to our domestic industries. He said that pharmaceutical and chemical industries are polluting the environment and it must be ensured that sufficient measures including setting-up of treatment plants are taken in order to save the environment. He said that the Central Government should coordinate with the State Governments and monitor to ensure that these pharmaceutical and chemical industries should set-up treatment plants which are functional so that they do not contaminate the water and environment of surrounding villages. The MOS (IC), Commerce and Industry Smt. Nirmala Sitharaman welcomed the suggestion of the Member and assured that adequate measures will be taken in this regard in order to protect the environment.

The meeting was also attended by Shri Chandu Lal Sahu, Member, Lok Sabha. Along with MOS (IC), Commerce and Industry Smt. Nirmala Sitharaman, the meeting was also attended by Secretary, Ministry of Commerce, Smt. Rita Teaotia, Secretary, DIPP, Shri Ramesh Abhishek and other senior officers of the Ministry of Commerce and Industry.