Taiwan to Accept WTO's Trade Facilitation Agreement to Grease Wheels of Int'l Trade

The Ministry of Economic Affairs (MOEA) recently announced that Taiwan is scheduled to soon submit its letter to the World Trade Organization (WTO) to accept the Trade Facilitation Agreement (TFA), which is expected to grease the wheels of international trade for Taiwan.  

In December 2013, WTO members concluded negotiations on the TFA Agreement at the Bali Ministerial Conference, as part of a wider “Bali Package”. Since then, WTO members have undertaken a legal review of the text. In line with the decision adopted in Bali, WTO members adopted on November 27, 2014 a Protocol of Amendment to insert the new Agreement into Annex 1A of the WTO Agreement. The TFA will become effective once two-thirds of members have completed their domestic ratification process.

The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area.

Y.K. Jiah, Deputy Chief Negotiation Representative of the Office of Trade Negotiations (OTN) under MOEA, pointed out that the TFA deals with mainly customs-related affairs that are expected to accelerate customs clearance and cut trade costs, without cutting tariffs to be truly beneficial Taiwan. The deputy chief negotiation representative added that the 10th WTO Ministerial Conference is going to be held in Nairobi, Kenya December 15-18, 2015, with most parties forecasting that the TFA will be put into effect by the conference's opening.

Most industrially advanced nations have comprehensive and well-structured trade and customs-clearance rules, such as the U.S., European Union (EU), Japan, Singapore etc., which have transparent rules for easy control of goods flows. However, he added, customers in Southeast Asian nations and some developing countries might add hidden trade costs with red tape or intentional delays that enable bribery. Once a WTO member signs the TFA, customs-related affairs must abide by related rules, Jiah said, so the agreement is very important for Taiwan in international trade.

To accelerate realizing the conclusion achieved by the 9th WTO Ministerial Conference, the 2015 Asia-Pacific Economic Cooperation (APEC) meetings held in the Philippines in May called on its members to promise to complete their domestic ratification process. To date, members who have submitted acceptation letters to WTO for TFA include: Singapore, the U.S., Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, South Korea, and Nicaragua.

Easier Trade

According to Jiah, the TFA is expected to bring about for Taiwan not only more convenient customs-clearance in their export markets, but, more importantly, breakthroughs in the island's bilateral trade negotiations with other nations via the multilateral agreement.

In addition to TFA, Taiwan has promised the WTO to join the International Telegraph Alphabet No. 2 (ITA2, the teleprinter code in use until the advent of ASCII), the Trade in Services Agreement (TiSA, a trade agreement currently being negotiated by 23 members of the WTO), and Environmental Goods Agreement (EGA, since July 2014 the EU and 16 other members of the WTO have been negotiating to remove barriers to trade in environmental or "green" goods that are crucial for environmental protection and climate change mitigation), etc., all of which are multilateral trade and economic agreements, Jiah said.