Commitments on the new WTO trade deal

Trade ministers of the member-states of the World Trade Organization (WTO) concluded a Trade Facilitation Agreement at Bali, Indonesia, earlier this month. The agreement aims to streamline Customs clearance procedures around the world, by imposing new multilateral disciplines and uniform principles for transparency, due process, and reasonableness in development and implementation of requirements.

The members have committed to publishing all importation, exportation and transit procedures at points of entry, applied rates of duties and taxes, fees and charges by government agencies associated with import and export. Also, all rules for classification and valuation of goods for Customs purposes, penalty provisions for breach of Customs procedures, procedures for appealing Customs decisions, agreements with any countries relating to importation, exportation and transit and quota administration procedures.

Member-states have further committed to make much of this information available online, where possible, in one of official languages of the WTO. And, to provide opportunity for stakeholders to comment on proposed regulations related to the movement, release and clearance of goods prior to implementation of such rules.

All WTO members are now committed to issue advance rulings, upon request, regarding the classification and origin of goods to be imported into their territory. And, to make such advance rulings available to the public, taking into account the need to protect commercially confidential information. They are also committed to provide any person to whom an administrative decision has been issued a method of appealing such a decision. And, greater transparency in procedures for inspection, detention and audits of goods crossing their borders.

Other commitments include low documentary and data requirements, low rates of inspection and rapid release of goods to authorised operators. Also, fees and charges limited to the cost of carrying out activities associated with import or export, imposing penalties for the breach of Customs rules only upon responsible persons, written explanation of the grounds and encouraging voluntary self-disclosure of Customs breaches by way of mitigation offers. Also, procedures for pre-processing import documentation, for electronic payment of duties, taxes, fees and charges, for release of goods under bond, beside allowing free transit of goods through their territory, information sharing information on best practices in managing Customs compliance and for the purpose of verifying declarations. A committee has been formed to coordinate implementation of the agreement by 2015.

Most countries, including India that have ratified WTO's Kyoto Protocol on simplification and rationalisation of Customs procedures, are unlikely to find the new requirements onerous, as they are largely compliant already, at least in theory. Countries that have to make significant adjustments have been assured technical assistance and support for capacity building, to help nudge them go along.

As most importers/exporters from India would readily agree, availability of information about Customs procedures and existence of these for grievance redressal, etc, help in limited ways when the laws are complex. Too many duties and exemptions litter the tariff and exceptions are not handled in a professional manner. So, expectations of significant cost reductions due to the agreement may not materialise. Even so, the binding agreement is a welcome development, as it keeps the Doha Development Round alive.

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