Members of the Coalition for Trade Facilitation, a private sector-led initiative called for the immediate ratification and implementation of the Trade Facilitation Agreement (TFA) which has been dragging on the corridors of power since 2013.
The TFA, according to the private sector coalition has been put into a Cabinet memo, is currently before the Minister of Trade and Industry, Dr Ekwow Spio-Garbrah for him to send for ratification subsequent implementation.
The immediate past President of the Ghana Freight Forwarders, Joseph Agbaga who disclosed this said: “By my investigation as of yesterday (30th March 2016) the TFA has been put into a Cabinet memo which is before the Trade Minister for him to push for Parliament as of yesterday morning”.
The Coalition which includes the World Trade Centre Accra, Association of Ghana Industries, Ghana Employers Association, Ghana Institute of Freight Forwarders, Ghana Shippers Authority, Federation of Association of Ghanaian Exporters, Ghana Union of Traders Association and the Ghana National Cargo Transporters Association maintained when the TFA is ratified and implemented could raise the country’s export revenue.
Until recently, goods used to delay at the country’s ports and borders for days and even weeks before they are cleared. But the gloomy story turned to bright one following the successful implementation of the Pre-Arrival Assessment Reporting System (PAARS), a component of the Ghana National Single Window (GNSW) project being implemented by West Blue Consulting on behalf of Customs Division of the Ghana Revenue Authority (GRA).
Since the introduction of the GNSW’s PAARS last year, traders are able to access Customs Classification and Valuation Report (CCVR) within 48 hours.
In some cases, within an hour that is substantial improvement from the previous situation whereby it used to take traders more than a week or two weeks just to get their CCVR, according to senior officials of the Customs Division of GRA.
The TFA which is one of the main outcomes of the World Trade Organisation’s 9th Ministerial Conference in Bali, Indonesia, in December 2013 aims at reducing the time and cost of international trade.
Since then, WTO members have undertaken a legal review of the text. In line with the decision adopted in Bali, WTO members adopted on 27 November 2014 a Protocol of Amendment to insert the new Agreement into Annex 1A of the WTO Agreement.
The TFA will enter into force once two-thirds of WTO’s 162 members have completed their domestic ratification process. As of March 2016, out of the 80 WTO Members that had ratified, only seven of them, excluding Ghana, were from Africa out of a total of 40 African WTO Members.
Essentially, the World Trade Organisation (WTO) is a place where member governments try to sort out the trade problems they face with one another.
Why should Ghana ratify?
Throwing more light, on the TFA, Emmanuel Doni-Kwame, the Secretary-General International Chamber of Commerce (ICC Ghana) explained the need for the ratification and implementation of the trade facilitation agreement.
He observed: “The issues that culminated in the drafting of the agreement have to do with issues that confront us on a daily basis and we have observed that at most ICC meetings. These issues are prevalent in developing countries especially ours”.
“And these have to do with the uncertainties that we all encounter when we are moving goods across borders-the delays and these also affect our predictability and then they add on to transaction cost at our ports or transit ports”.
So, TFA is for everybody, not just importers or exporters. It is for every single business entity, Mr Doni-Kwame stated.
He was quick to add that 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, according to him.
Contributing to the discussion, Madam Valentina Mintah, the Chief Executive Officer of West Blue Consulting, said it is important to business, because it can have a major impact on bringing down trade transaction costs and raising the country’s export revenues.
Statistics have shown that Ghana’s total export revenues for its three major commodities such as cocoa, oil and gold amounted to US$8.2billion for the period between January and September 2014, which was reduced by US$2.4billion to US$5.8billion for the same period in 2015. The revenues figure is expected to fall further this year.
Madam Mintah stressed that the TFA when ratified and implemented could further boost trade facilitation and increase more revenues into the country.
Sanctions for not ratifying TFA
“Now, if you look at the agreement that came into force in December 2013, once you have two-thirds of the members of the WTO ratifying, it comes into full force.
That means there is going to be implications, sanctions for those countries who do not comply to that particular agreement”.
As of March ending there were 80 countries which have ratified. It keeps on increasing but Ghana has not ratified.
“But we are getting there. So with 80 and we need a 108-WTO member country ratifying, it jumps from 71 countries to 80 just a week. So, there is movement”, Madam Mintah stated.
There is another component of the TFA. Beyond ratification, every member country becomes accountable to the agreement.
Beyond ratifying, there are three categories that the TFA layout. Category A: The TFA, for all those processes or activities once the ratification is complete member country should have implemented those elements in Category A.
So, every country-developed and least developing country must present their Category A activities or items which are expected to be implemented by immediately after ratifying the TFA. Then Category B follows the successful implementation of the Category A and then Category C in that order.
“Now, we have a global agreement that sets the standard, timeline, with sanctions if countries do not adhere to that. So, we have two calls to action for our own national position on the global stage and for our agreement responsibilities”, the CEO of West Blue Consulting emphasized.
WTO got it right
Madam Mintah lauded: “If you look at the trade facilitation agreement you will think that the WTO got it right because there is a provision for special provision called SDTs (Special Differential Treatments) which give special provisions to developing countries and least developing countries”.
So, again it gives them the flexibility to be able to compete on the same stage as those from developed and matured countries, she further explained.
“So, therefore it is good for us to be able to take advantage of that and if we don’t do anything and stay still all countries will go pass us in terms of competitiveness at the ports”.
Currently, Ghana’s peers at the sub-region Cote d’Ivoire, Nigeria, and Senegal have already ratified among others. For the ratification where two-thirds of members are needed to do that, but for Category A provision, over 70 least developing and developing countries have submitted their Category A activities, according to the experts.
So, Ghana is in the process of doing that and we hope to be part of the 108. For Category A, we have no choice to do that. Madam Valentina stated.
The immediate past President of the Ghana Freight Forwarders, Joseph Agbada added: “At end of 2014 assessment needs Ghana came up under Category A measures in six areas that is under the Article 6.3 which talks about penalty disciplines and Article 9 talks about movement of goods under customs control”.
Article 10.7, he explained talks about common border procedures and requirement and uniform documentation relating to clearance. While Article 10.7 also talks about rejected goods.
Mr Agbada further noted that Article 10.9 talks about temporarily admission of goods in-towards and out-towards processing and then Article 13.2 talks about national committee on trade facilitation.
“And these are the areas that we feel that there are the things that we are already doing and therefore we are compliance as a country. So, what it means is that if today 108 countries ratification takes effect these are areas we are already doing and we don’t have any reason to lose. So, this is our Category A that is in a draft form”.
Some of the stakeholders have blamed the ratification and implementation on the general lack of knowledge on the TFA, Mr Doni-Kwame and his private sector-led coalition are positive that the country is likely to ratify and implement by the close of the year.