Trade Facilitation Agreement

The government had approved a proposal to notify the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO) in February, 2016. The proposal regarding ratification and acceptance of the instrument of acceptance of protocol of TFA to WTO Secretariat was also approved by the Union Cabinet.

National Committee on Trade Facilitation

Government also decided to constitute National Committee on Trade Facilitation (NCTF) to facilitate both domestic coordination and implementation of the provisions of the Agreement. NCTF will be set up under the Joint Chair of Secretary under the aegis of Union Ministry of Commerce and Industry’s Department of Revenue and Secretary, Department of Commerce.

  • The TFA is the WTO’s first-ever multilateral accord that aims to simplify customs regulations for the cross-border movement of goods.
  • It was outcome of WTO’s 9th Bali (Indonesia) ministerial package of 2013. The agreement includes provisions for
  • Lowering import tariffs and agricultural subsidies: It will make it easier for developing countries to trade with the developed world in global markets.
  • Abolish hard import quotas: Developed countries would abolish hard import quotas on agricultural products from the developing world and instead would only be allowed to charge tariffs on amount of agricultural imports exceeding specific limits.
  • Reduction in red tape at international borders: It aims to reduce red-tapism to facilitate trade by reforming customs bureaucracies and formalities.
  • The TFA shall enter into force for the notified members upon acceptance by two-third (107 countries) WTO Members. So far 69 countries of the 162 WTO members have ratified this pact.
  • If this agreement is properly implemented, it may create US 1 trillion dollars’ worth global economic activity which may add 21 million new jobs and lower the cost of doing international trade by 10 to 15%.

Earlier Union Government had refused to ratify TFA till its concerns about public stockholding for food security are resolved. But in order to address India’s concerns WTO had agreed to amend the Bali agreement, providing India an indefinite reprieve on food stockholding.


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