 "Cabinet approves Trade Facilitation Agreement")
Nearly two years after the Bali agreement, the Cabinet on Wednesday approved the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA), which seeks to ease Customs procedures to boost commerce. To implement the agreement, two-thirds of the total members, or 107 countries, have to approve it. India was the 71st country to give nod to the agreement.
The pact aims to expedite the movement, release and clearance of goods, including goods in transit, for international trade. For this purpose, it sets out measures for effective cooperation between Customs and other appropriate authorities on trade facilitation and Customs compliance issues. Towards this end, a national committee on TFA would be set up to coordinate and implement the provisions of trade facilitation. The committee will be co-chaired by both the revenue secretary and commerce secretary.
According to the WTO, full implementation of TFA could increase global merchandise exports by up to $1 trillion annually. The overall boost to world export growth has been estimated at 2.7 per cent per annum.
Talking to reporters, Commerce & Industry minister Nirmala Sitharaman said the pact will bring much-needed predictability to trade related matters, by allowing advance authorisations, easier sharing of information with exporters and ease of business.
Sitharaman, however, pointed out that lots need to change in terms of the Customs Act to fulfil India’s commitments under the pact. Also, changes in rules will need to be instituted in a range of areas. These include allowing goods to be released before duty is paid on a guarantee basis in cases of certain imports and allowing inward and outward processing for facilitating re-import and re-export of goods for repair.
The scope of advance ruling has to be broadened to extend the facility to “any importer, exporter or any person with justifiable cause”. India’s current regime allows advance rulings to a limited set of persons such as joint ventures and foreign investors.
The minister said bringing about these changes will require a significant amount of money. However, she said the government has not sought funding.
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