Pakistan has ratified WTO’s Trade Facilitation Agreement (TFA) which contains provisions for expediting the movement, release and clearance of goods, including goods in transit.
After ratification, Pakistan has become the 51st World Trade Organisation member, first from South Asia, to accede to the treaty. “We have deposited instrument of acceptance of the TFA to the Geneva-based WTO secretariat,” a senior official of the commerce ministry told Dawn on Tuesday.
Before leaving for US, Prime Minister Nawaz Sharif has approved the summary despite reservations from the Customs Department over the TFA.
The premier also asked the Federal Board of Revenue (FBR) to complete all other formalities within 15 days of the ratification of the treaty.
This will be the second treaty that Islamabad has acceded to facilitate border trade including goods in transit. Recently, Pakistan also ratified the UN Convention on the International Transport of Goods, entailing no payment of customs and taxes on goods in transit with neighbouring countries.
India has yet to ratify both the treaties. Afghanistan and India have constantly pushing Pakistan for allowing Indian goods for transit to Kabul and beyond.
In December 2013, WTO’s 161 members concluded negotiations on the TFA at the Bali Ministerial Conference, which is the first multilateral trade agreement concluded since the establishment of WTO in 1995.
Compared to Pakistan’s position on TFA, India has bargained with world leaders in getting sufficient leverage for its agriculture sector protections. While Pakistan got nothing in return before approving the TFA at Bali in 2013.
The TFA will enter into force once accepted by two-thirds, or 108, members of the WTO in the next 10th Ministerial Conference in Kenya in December this year.
According to the summary, a copy of which is also available with Dawn, the TFA is a unique agreement as it provides WTO members flexibility to categorise its provisions into three categories for implementation: A) implementation upon entry into force; B) deferred implementation; and C) linking implementation with implementation capacity and provision of technical assistance by donors.
Pakistan has already notified its category-A commitments to the WTO, while work on B and C commitments is underway. According to the WTO secretariat report, the TFA will boost trade volumes for developing economies and least developed countries, and help these countries diversify their exports.
It should also make it easier for small and medium-sized enterprises (SMEs) to engage in trade, encourage foreign direct investment (FDI) and increase the participation of developing countries in global value chains (GVCs).
It is estimated that the implementation of the TFA could result in a reduction of worldwide trade costs by up to 17.5pc; increase developing country exports by up to 22pc and create as many as 18 million related jobs in developing countries.