Vietnam became the 60th WTO member to ratify the Trade Facilitation Agreement (TFA) in November 2015. And, as of October 31, 2016, the World Trade Organisation (WTO) had 96 members to adopt TFA. The agreement is expected to take effect in early 2017 and its commitments are divided into Category A, Category B and Category C. On the sidelines of the Workshop on Developing an Action Plan for Implementation of Category B and C Commitments under the WTO Trade Facilitation Agreement held in Hanoi on November 29, 2016 by the General Department of Vietnam Customs under the support of the United States Agency for International Development (USAID) and with the cooperation of the World Bank (WB), Vietnam Business Forum has an interview with Mr Vu Ngoc Anh, Deputy General Director of the General Department of Vietnam Customs, on this issue. Le Hien reports.
“TFA covers customs issues aimed at promoting and facilitating transport operations, customs clearance, export and import liberation, transit at border gates as well as customs cooperation measures and technical support. The agreement is expected to create a new momentum to promote international merchandise trade and bring benefits to all WTO member states,” said Deputy General Director Vu Ngoc Anh.
TFA is expected to take effect in early 2017. Could you please briefly introduce its roles to the business community?
This is a very important agreement in boosting international trade, and reducing the time and cost of cross-border trade transactions. According to studies by the World Bank, the TFA enforcement will help reduce 20 per cent of transaction costs for businesses in Vietnam, boost investment and create employment for Vietnam. With clear benefits and effects of TFA, the Government of Vietnam has expressed its determination by issuing the aforementioned action plan and setting up the National Steering Committee for Single Window and Trade Facilitation. Vietnam not only proved that it was an active nation in international integration but also expressed its desire to further facilitate trade and investment for businesses according to objectives of the Governmental Resolution 19-2016/NQ-CP on primary tasks and solutions to improving the business environment and enhancing national competitiveness in 2016-2017, with a vision to 2020.
TFA commitments are divided into Category A, Category B, and Category C, would you talk more about these categories?
TFA is grouped into Category A, Category B and Category C. Accordingly, each member country will classify TFA terms based on its ability to execute each term. Category A will be enforced immediately on the effective date of the agreement. Category B will go into force after a transitional period later. Category C is the enforcement after member countries receive technical assistance and capacity building.
Vietnam adopted 15 Category A commitments with the WTO in order to determine the commitments to be implemented immediately after the TFA comes into force. The action plan details tasks to be undertaken, objectives and outputs for specified for each commitment, transitional time, necessary assistance needs and tasks of each stakeholder, and coordination mechanism for stakeholders. The action plan will then submitted to the National Steering Committee on Single Window and Trade Facilitation.
The action plan for implementation of Category B and Category C will be notified to the WTO Secretariat as soon as the agreement is effect. When in force, the agreement will enhance national competitiveness as well as competitiveness of the business community while boosting trade and investment in Vietnam.
It seems that the business community and authorities as well do not really pay due attention to this TFA. Would you mind revealing specific plans to enhance the effect of TFA?
As a standing body, the General Department of Vietnam Customs has made remarkable efforts to build and fulfil customs-related commitments. For example, the specialised inspection is much related to exports and imports such as animal and plant quarantine and food safety checks. The General Department has also undertaken commitments related to ground and seaborne logistics services to reduce the time and costs in export and import clearance for enterprises. The General Department has also been assigned important tasks in connection with Category B and C commitments, e.g. reviewing existing legal instruments to abolish inappropriate ones and/or amend/supplement them or planning the purchase of equipment at the service of such activities. The General Department needs to have information technology investment plans to digitise and modernise procedures in the National Single Window Mechanism. Accordingly, the agency will take into consideration Category B and Category C commitments and report its commitments to the WTO in order to facilitate business operations of enterprises. These changes have benefited the business community for long. But, the effective TFA enforcement requires efforts of both enterprises and the government.
The General Department has conducted a series of TFA-related activities for enterprises. For example, it has collaborated with USAID to organise TFA seminars for businesses and joined hands with related agencies to perfect the law. Hopefully, with the close private and public cooperation, TFA will be a pressure and boost to thorough customs procedure reform in Vietnam, create favourable conditions for Vietnamese firms to effectively utilise benefits of international trade, particularly upcoming free trade commitments.
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