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Expediting trade facilitation measures  

Asjadul Kibria   | Published: May 03, 2019 21:31:28 | Updated: May 09, 2019 21:25:18


Two years after the World Trade Organisation's (WTO) Trade Facilitation Agreement (TFA) came into force, the overall progress of the implementation of the multilateral deal is still slow.  So far, 141 out of 164 members of the WTO have ratified the agreement. The remaining 22 are all developing and Least Developed Countries (LDCs). Developing and LDCs like Bangladesh are yet to push the various measures of the agreement adequately and effectively.

Trade facilitation is a set of measures to speed up the movement, release, and clearance of goods across international borders mostly through electronic procedures. The agreement thus opens an opportunity to enhance effective cooperation between customs services across the world. The core idea behind the measures is to cut the red tape in customs and reduce trade cost which will ultimately be beneficial to the consumers as they will get products at competitive price. TFA is the only multilateral agreement endorsed by the WTO members in 22-years of its history. Adopted at Bali ministerial conference in 2013, it came into force on February 22, 2017 when ratification by two-third members of the organisation completed.

Bangladesh ratified the agreement on September 27, 2016. So far, the country has implemented 34.50 per cent of the 38 broad measures of the agreement. As committed to WTO, it will implement some 38.20 per cent measures in between February 2020 and February 2022 on its own. As for the remaining 27.30 per cent measures, the country needs adequate support, be it technical or financial assistance or both.

For monitoring the implementation of the agreement transparently, WTO divides the 38 measures in three categories-A, B and C. Measures under category-A is immediately implementable, though for LDCs additional one year from the enforcement date of the agreement is allowed. Category-B includes measures members are implementing on their own where LDCs have three-year transitional period following the enforcement of the TFA.  Category-C includes measures LDC members will implement after six-years of transitional period provided they are provided with adequate assistance.

CHALLENGE OF SINGLE WINDOW: Bangladesh has requested assistance and support for capacity building in respect of 11 measures including setting up enquiry points, pre-arrival processing and post-clearance audit of imported goods, authorised operators and introduction of single window system.  Work on single window system is going on and there is assistance available from the World Bank. It is one of the most important measures to release imported goods from ports at a faster rate and without any hassle. The National Board of Revenue (NBR) is   currently working to implement the single window and it has already signed an agreement with 38 government and private sector agencies.  The expectation is that average processing time of an import and export consignments will come down to 122 hours or 88 hours respectively within five years of implementing the National Single Window (NSW). NSW is an electronic facility through which any trader can submit electronic requests for all trade related documents. The information at each stage is captured, stored and reused as needed. Once the permit stage is passed and the trader lodges a specific trade declaration to import or export goods, the processing and approval for this declaration is done in a single electronic transaction. Approvals are transmitted electronically or digitally. Fees, taxes and duties are computed automatically and deducted from the trader's bank account. 

Very strong information technology (IT) or digital-based infrastructure and sophisticated networking are essential with adequate backup system to avoid any disruption of the service. Though the country has developed a good manpower and logistics in the IT sector and gradually expanding digitalised system, some risk factors are there. For instance, choice of 'politically-backed' vendors is likely to compromise the quality of works, especially security features of the IT-infrastructure and networks. 

TRANSPARENCY IS THE KEY: Availability of all trade-related information is the key to trade facilitation. The first six measures (which include 12 sub-measures) are clearly linked to transparency of trade-related rules, regulations, procedures and practices. These measures are: publication, information available through internet, enquiry points, notification, opportunity to comment on new and amended rules and consultations. Of these, Bangladesh has put enquiry points in category-C which means the country is seeking external assistance to develop the facility. To put it simply, a national enquiry point (NEP) is a system though which any one can access information already published. Moreover, the point should be equipped to provide information both in personalised and customised manner in response to any specific requests through telephone, fax and email. The country rightly put it in category-C as developing a WTO-compliant enquiry point needs time, skilled manpower and adequate logistics. There is still a great deal of reservation in the government machinery regarding providing information quickly. Digital Security Act also makes the job tough. Nevertheless, NBR has already developed a national enquiry point (NEP) mechanism which is now under trial. This is a positive development. But other enquiry points related to standard, health or port are yet to be adequately developed.

The country, however, notified to WTO that it has partially implemented five other measures and the rest will be implemented between February 20, 2020 and 2022. Four of those will be fully implemented by 2020 and one (information available through internet) will be implemented by 2022.

CUSTOMS AND OGAs: It is to be noted that around 80 per cent of the TFA measures are customs-centric and Bangladesh customs has undergone many changes since the early nineties mainly through donor-funded reforms programmes. So, Customs authority is significantly ahead of other government agencies (OGAs) in terms of implementation of TFA measures and the main challenge ahead is to synchronise other government agencies with Customs to make the trade facilitation measures effective in the long run.  For instance, testing of imported agro-product is under the jurisdiction of quarantine department.  Even if customs releases an agro-product consignment quickly, it will not be released from the port unless quarantine department gives the testing certification. So, all the related departments or bodies have to cooperate with customs to reduce the time of the release of any import consignment.

There is no need to overemphasise the importance of trade in Bangladesh as the country's trade-GDP ratio reached 35 per cent now from 16 per cent three decade back. Without facilitating trade in the best possible manner, economic growth will slow down. Moreover, trade facilitation is critical to ease doing business. Bangladesh now ranks 176 among 190 countries in the World Bank doing business index and placed even below Afghanistan, a war-torn country struggling to recover and restructure. To improve the country's ranking, there is no alternative to successful implementation of the TFA.

 

asjadulk@gmail.com

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