So, the July 31, 2014 deadline for adopting the WTO Trade Facilitation Agreement (TFA), as reported in Bali Update, Part I, has come and gone, and the Agreement has not been adopted. On July 31, 2014, the WTO General Council met to adopt the protocol that will insert the TFA into the WTO regulatory framework. However, as Director-General Azevêdo reported just before the midnight deadline:

At this late hour, with the deadline just a matter of moments away, I don’t have anything in my hands that makes me believe that we can successfully reach consensus. . .. On the one side we have the firm conviction, shared by many, that the decisions that ministers reached in Bali cannot be changed or amended in any way — and that those decisions have to be fully respected. And on the other side of the debate we have some who believe that those decisions leave unresolved concerns that need to be addressed in ways that, in the view of others, change the balance of what was agreed in Bali. These are the two sides. We have not been able to find a solution that would allow us to bridge that gap.

The “other side of the debate” refers to India’s insistence that the Bali Package agreed to in December be adjusted to address its food security concerns before the Trade Facilitation Agreement is adopted.

At Bali, the members agreed to continue discussions to arrive at a permanent solution on how to treat food subsidies. Meanwhile, they instituted a “peace clause” of four years during which such programs by developing countries that meet certain criteria are to be shielded from trade challenges, even if they negatively impact other countries’ trade. India wants this agreement to be interpreted to mean that the “peace clause” remains in place permanently until a comprehensive agricultural package is reached. India believes its interpretation will put more pressure on both sides to adhere to the December 31, 2014 deadline to arrive at an agreement on this issue.

Its refusal to budge on this position means that the Trade Facilitation Agreement remains draft text. This impasse will be revisited in September.

Launch of TFA Technical Assistance Programs

Nevertheless, some steps have already been taken on a key component of the Trade Facilitation Agreement (TFA). The TFA introduces requirements for members to improve the efficiency, effectiveness, and transparency of their customs procedures. The text further provides for technical assistance to developing countries to build the capacity needed to implement its requirements.

The WTO Trade Facilitation Agreement Facility (TFAF) has been launched to provide this assistance.

In a meeting on July 22, 2014, a group of major international organizations declared their intention to work together to assist developing and least-developed Members through a range of technical assistance and capacity-building initiatives. The joint statement is signed by the following international organizations, some of which have already also launched their programs:

• International Trade Centre
• Organization for Economic Cooperation and Development
• United Nations Conference on Trade and Development
• United Nations Economic Commission for Europe
• World Bank Group
• World Customs Organization

The US Agency for International Development (USAID) is establishing an Alliance for the Trade Facilitation Agreement as a public-private partnership. Other multilateral and bilateral donors are expected to launch their assistance programs shortly.

The WTO TFAF will act as a focal point for these efforts by supporting needs assessment, facilitating information flow among development partners and requests for technical assistance, disseminating best practices, and providing grants to support project development and implementation.

Fruition on these commitments is being made contingent on the still-pending adoption of the TFA. Will this reality pressure India to fall in line? (To be continued)