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Canada takes steps to ratify WTO Trade Facilitation Agreement

April 29, 2016

Negotiations on the World Trade Organization (WTO) Agreement on Trade Facilitation (TFA) were concluded at the WTO's 9th Ministerial Conference in Bali, Indonesia, in December 2013.

The purpose of the Agreement is to modernize and simplify customs and border procedures, and lower trade costs. It is expected that most economic gains will flow to developing countries.

The WTO estimates that the TFA could boost global merchandise exports by up to $1 trillion, with up to $730 billion accruing to developing countries and reduce trade costs by an average of over 14 percent, with average reduction of nearly 17 percent for least developed countries. Even in the event that some WTO Members do not move to fully implement the TFA, the real-world impact will be significant. Mechanisms are in place to assist developing countries implement the TFA.

Although Canada is already compliant with the vast majority of the TFA's provisions, legislative amendments are required in order to enable the country to comply with two specific provisions and to ratify the Agreement.

The required legislative amendments are contained in Bill C-13. The proposed amendments relate to articles of the TFA which address non-compliant goods and goods in transit, respectively.

One article requires WTO Members to allow importers to return to exporters goods rejected on account of their failure to meet certain health and other technical requirements. It also includes an exemption, which allows a WTO Member to dispose of non-compliant goods in an alternate way, where this is provided for in its laws.

The other article prohibits the application of technical regulations to goods moving through a WTO Member's territory from a point outside its territory to another foreign point (i.e. goods in transit).

Bill C-13 adapts Canadian laws to these obligations and will allow Canada to ratify the agreement.

The TFA will enter into force once it is ratified by two-thirds of WTO Members. As of April 26, 2016, 77 of the required 108 WTO Members have already ratified, including Canada's major trade partners, such as the U.S. EU, China and Japan.

Link: Countries that have ratified the TFA

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