Australia has become the latest country to make a donation to the WTO’s trade facilitation agreement facility (TFAF), a fund that is supposed to help less developed countries in their implementation of the TFA.

The facility was formally launched in July 2014 and became operational last November, when the protocol to the TFA was adopted. It has thus far received donations of CHF100,000 from Austria, CHF700,000 from the UK, and CHF5mn (over two years) from Norway. Australia’s CHF715,000 donation adds to the total of over CHF7,5mn pledged, including donations rolled over to the TFAF from previous trade facilitation technical assistance trust funds. WTO officials have told GTR that they are expecting additional commitments of funding which should boost the facility’s reserves.

The two types of grants provided (project preparation and project implementation) will be available to developing and less developed country members once proven that no other funding source can meet their needs, although the exact details on the conditions for submitting a grant application are still being worked out. As yet, no country has claimed they are unable to secure financing for TFA implementation from other sources.

According to WTO officials, the expectation is that most – if not all – financing needs will be met through the World Bank, regional development banks, and donor countries. For example, the World Bank has said it has US$7.1bn earmarked for overall trade facilitation reforms, with US$30mn specifically for implementation of the TFA. The US has disbursed some US$4bn in funding for trade facilitation activities since 2008 and has a number of new projects underway in Central America and the Caribbean, Southeast Asia, the Middle East and Sub-Saharan Africa.

In addition to grants, the fund also provides financing for needs assessments, the preparation of TFA notifications, and other implementation assistance. The TFA will enter into force when two thirds of the WTO’s 162 members have ratified the agreement, but this is not a condition to accessing the fund. There have currently been eight ratifications, but WTO officials are expecting “a lot more” to come in by the time the organisation holds its next ministerial conference in Nairobi in December.


90-second update: The trade facilitation agreement

caught up with Arancha Gonzalez, executive director of the International Trade Centre, at the 9th World Chamber Congress to discuss the progress in in TFA ratification process.