Previous Year Question
Consider the following statements:
India has ratified the Trade Facilitation Agreement (TFA) of WTO.
TFA is a part of WTO’s Bali Ministerial Package of 2013.
TFA came into force in January 2016.
Which of the statements given above is/are correct?
1 and 2
1 and 3
2 and 3
1, 2 and 3
Correct Answer: A
Detailed Solution
Statement 1 is correct.
India accepted the WTO Trade Facilitation Agreement. India deposited its Instrument of Acceptance on 22 April 2016 with the Director-General of the WTO.
This formal process was necessary because each Member had to accept the Protocol of Amendment through which the TFA was inserted into Annex 1A of the WTO Agreement.
Statement 2 is correct.
Negotiations on the TFA were concluded at the WTO’s Ninth Ministerial Conference, held in Bali, Indonesia, in December 2013. The agreement formed an important component of the Bali Ministerial Package of 2013.
The principal objective of the TFA is to expedite and simplify the:
Movement,
Release,
Customs clearance, and
Transit
of goods across international borders. It also contains provisions for effective cooperation between Customs Authorities and other Border Agencies.
Statement 3 is incorrect.
The TFA did not enter into force in January 2016. It entered into force on 22 February 2017, after the required two-thirds of the then 164 WTO Members had accepted it.
Therefore, only statements 1 and 2 are correct.
Special structure of the TFA
The agreement allows developing and least-developed countries to implement its provisions according to their capacities. Commitments are classified into three categories:
Category A: Provisions that a Member will implement when the TFA enters into force.
Category B: Provisions that will be implemented after a specified transitional period.
Category C: Provisions requiring additional time as well as Technical Assistance and Capacity Building.
It is the first WTO agreement in which implementation obligations of Developing and Least Developed Countries are directly linked to their institutional capacity and the availability of assistance.
According to WTO estimates, full implementation of the TFA could:
Reduce average global trade costs by approximately 14.3%.
Reduce import time by more than one and a half days.
Reduce export time by almost two days.
Increase global trade by as much as US$1 trillion annually.
Increase the number of new products exported by developing countries by up to 20% and by LDCs by up to 35%.
Current position (2026): The TFA remains in force as part of the WTO Agreement, and India continues to implement its trade-facilitation commitments.
India established the National Committee on Trade Facilitation—NCTF to coordinate implementation across Customs, ports, logistics institutions, regulatory agencies and concerned government departments.
The chronology should therefore be kept clear:
2013: Negotiations concluded at Bali.
22 April 2016: India deposited its Instrument of Acceptance.
22 February 2017: TFA entered into force internationally.