Trade-related pacts between government bodies and the private sector as defined by the provisions of the World Trade Organisation’s Trade Facilitation Agreement (TFA) are scheduled to be devised through public-private coordinated efforts in cooperation with the WTO, according to a knowledge-sharing seminar on the WTO TFA held on June 16 at the office of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) in Yangon.
By means of the planned trade-related pacts, which will be part of the implementation of the WTO TFA by Myanmar, private traders will have awareness and knowledge of the trading rules and regulations to perform their trade activities in a transparent and fair manner, according to the seminar.
The implementation measures and forthcoming processes on the WTO TFA were covered at the event, which was co-organised by the World Bank Group and the UMFCCI. Among the attendees at the seminar along with individuals from the private sector were Assistant Director-General of the Department of Trade Min Min, Director-General of the Customs Department Kyaw Htin, Vice-Chair of the UMFCCI Dr. Maung Maung Lay and representatives from the World Bank (WB).
The purpose of the seminar was to bring about a Dialogue Partnership to coordinate and set up trade-related pacts and pull off decent advices between the government officials and the private sector in the implementation of the internationalised customs operations in line with the WTO TFA through the technical aid from the WB. The WTO will assist Myanmar in logistics and IT (information and technology) system in its trade facilitation activities.
The UMFCCI said that the WTO aid in logistics and IT will be a great support to the private sector investment and development in Myanmar, which reached an agreement with the WTO in February this year to receive trade facilitation assistance. The country ratified the WTO TFA in 2015 when former Minister for Commerce Win Myint under the previous administration presented his nation’s instrument of acceptance to WTO’s Director-General Roberto Azevedo on December 16, 2015.
The WTO TFA
The TFA entered into force on February 22, 2017 when the WTO obtained acceptance of the Agreement from two-thirds of its membership. Currently ratified by 119 member nations, the compact spreads an extensive series of trade facilitation reforms across the areas of transparency and predictability of trading across borders. It contains provisions for expediting the movement, release and clearance of goods, including goods in transit.
Setting out measures for effective cooperation between customs and other relevant authorities on trade facilitation and customs compliance matters, it seeks to ease trade processes, bring down barriers to trade and enhance the capacity of the developing countries to make deeper integration with the global trading network. The Agreement also contains provisions for technical assistance and capacity building in this area. For this reason, a Trade Facilitation Agreement Facility (TFAF) was created at the request of developing and least-developed country members to help ensure that they receive the assistance needed to implement and benefit from the TFA and to support the ultimate goal of full implementation of the Agreement by all members.
Trade facilitation became a topic of discussion at the WTO’s Ministerial Conference held in Singapore in December 1996 after traders from countries with various development levels have long pointed to the vast amount of “red tape” procedures that still exist in border trade, staging a particular strain on small and medium-sized enterprises. After years of exploratory work, WTO members formally agreed to launch negotiations on trade facilitation in July 2004, and then adopted the TFA at the 9th Ministerial Conference held in Bali, Indonesia in December 2013.
Trade facilitation deals with the improvement of procedures and controls governing the movement of goods across national borders to reduce associated cost burdens and maximise efficiency while ensuring legitimate regulatory objectives. The concept mainly goes with the institutions which seek to improve the regulatory interface between government bodies and private traders at national borders.
Understanding and use of the term “trade facilitation” varies amongst practitioners. Sometimes, the term can be extended to cover a broader economic development and trade agenda that would include – the improvement of transport infrastructure; the elimination of government corruption; the modernisation of customs management; the removal of other non-tariff trade barriers and export marketing and promotion.
The WTO in an online training package defines trade facilitation as “the simplification and harmonisation of international trade procedures”, where trade procedures are the “activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade”.
Trade Facilitation Implementation in Myanmar
Following its ratification of the WTO TFA in December 2015, Myanmar is now on the way of undertaking implementation measures of the Agreement. For implementation of some aspects of the Agreement, the country has received the technical assistance and capacity-building support not only from the WTO but also from the United Nations Conference on Trade and Development (UNCTAD), Japan and other development partners.
A national-level workshop and knowledge-sharing seminar on the WTO TFA took place in the country’s capital Nay Pyi Taw in June 2015, organised by UNESCAP (United Nations Economic and Social Commission for Asia and the Pacific). The technical experts from various ministries and departments participated in the workshop. A National Trade Facilitation Implementation Plan was introduced by the United Nations Conference on Trade and Development (UNCTAD) through discussion with the relevant line ministries.
In order to enhance public knowledge about the trade facilitation measures, practices and legal procedures, management mechanisms and standards concerned with trade, transport and transnational trading, a national-level Trade Facilitation Committee was established in December 2016.
As part of the trade facilitation arrangements, Myanmar Customs is now implementing the modernised Myanmar Automated Cargo Clearance System (MACCS), a new IT system inspired by the Japanese NACCS/CIS (Nippon Automated Cargo Clearance System/Customs Intelligence System) which is now serving for more than 98 percent of export/import declarations in Japan. Aimed to be the basis for a national single window, the MACCS is designed in line with international standards and practices to contribute to the economic development of the country by ensuring time-saving rapid trade. The MACCS/CIS was introduced in November 2016 and is now available only in Yangon Region, currently being used at harbours and airport warehouses in the region including Thilawa Special Economic Zone. When the mechanism reaches nationwide, it will be able to handle about 98 percent of the cargo clearance processes in the country. Myanmar became another ASEAN (Association of Southeast Asian Nations) country after Vietnam to follow in the footsteps of the NACCS/CIS system. Vietnam started its VNACCS/ VCIS (Viet Nam Automated Cargo Clearance System/Viet Nam Customs Intelligent database System) based on the NACCS/CIS in April 2014.
Certain Critics’ Views on the WTO TFA
Although the WTO TFA is aimed to improve transparency, increase possibilities to participate in global value chains and to create a less discriminatory trade environment, critics have argued that it favours developed nations as developing and LDC (Least Developed Countries) nations will face tougher challenges in bringing up their regulatory and customs practises as well as modernising necessary trade infrastructure to reap the benefits of the TFA. Some view that the success of the compact will be determined by the rising trade protectionism across the globe and strengthening voices against trade liberalisation. The TFA is expected to significantly change the global trade scenario as the 164 member nations of the WTO account for more than 97 per cent of global gross domestic product (GDP) and 96.8 per cent of global trade.