Commercial Law Update: 2016

1. Missing Trade Facilitation Agreement in Services: India will submit a proposal to the World Trade Organisation (WTO) to start discussions on the Trade Facilitation Agreement (TFA) in services.  India is the 76th WTO member to accept the TFA. A Trade Facilitation Agreement Facility (TFAF) was created at the request of developing and least-developed countries to help ensure that they receive the assistance needed to reap full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members. Implementation of the WTO Trade Facilitation Agreement (TFA) has the potential to increase global merchandise exports by up to $1 trillion per annum, according to the WTO’s flagship World Trade Report released on 26 October 2015.

There is a total absence of collective recognition of services sector as part of trade in the WTO. Trade is no longer just in finished goods therefore services should be put under the definition of commodity. India is pitching for this agreement as the services sector contribute about 60% in the country’s GDP, and 28% in the total employment.

In December 2013, WTO members concluded negotiations on a Trade Facilitation Agreement at the Bali Ministerial Conference.  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.

Important Clauses of the FTA

11. Table for WTO (1)

11. Table for WTO 2

11. Table for WTO3

Section II: Special and Differential Treatment Provisions for Developing Country Members and Least Developed Country Members

Article 2. Categories of provisions

2.1. There are three categories of provisions:

  • Category A contains provisions that a developing country Member or a least developed country Member designates for implementation upon entry into force of this Agreement, or in the case of a least developed country Member within one year after entry into force, as provided in paragraph 3.
  • Category B contains provisions that a developing country Member or a least developed country Member designates for implementation on a date after a transitional period of time following the entry into force of this Agreement, as provided in paragraph 4.
  • Category C contains provisions that a developing country Member or a least developed country Member designates for implementation on a date after a transitional period of time following the entry into force of this Agreement and requiring the acquisition of implementation capacity through the provision of assistance and support for capacity building, as provided for in paragraph 4.

Each developing country and least developed country Member shall self-designate, on an individual basis, the provisions it is including under each of the Categories A, B and C.

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