WTO Agreement on Trade Facilitation (TFA)

1. What is the TFA?
  • The TFA, concluded at the WTO Ministerial Conference in December 2013, is the first multilateral Agreement concluded since the creation of the WTO.
  • It provides for the modernization and simplification of customs and border procedures by all WTO Members.
2. What will be the economic impact of the TFA?
  • The WTO estimates full implementation of the TFA by WTO Members could boost global merchandise exports by up to $1 trillion, including up to $730 billion in export opportunities accruing to developing countries, and decrease trade costs for WTO Members by an average of 14 percent, including an average of nearly 17 percent for least-developed countries.
3. When did the TFA enter into force?
4. Who are the parties to the TFA?
  • All WTO Members agreed to the conclusion of negotiations on the TFA at the December 2013 WTO Ministerial Conference.
  • All WTO Members will become parties once they ratify the Agreement.
5. Does the TFA cover all goods?
  • Yes, the TFA’s provisions apply to trade in all goods between WTO Members.
6. What are the benefits of the TFA for Canada?
  • The Agreement is the first multilateral treaty to emerge from the WTO since its creation, reinforcing the important role of the WTO as a negotiating forum for global trade rules.
  • The implementation of the TFA will cut red tape, enhance the predictability of trade and reduce the costs and delays of trading at international borders for Canadian exports.
  • It will contribute to an environment in which Canadian businesses, particularly small- and medium-sized enterprises (SMEs) which are challenged by high trade administration costs, are better positioned to export.
  • The TFA supports the government’s efforts to promote trade and development and provides another vehicle to increase prosperity in developing countries.<
7. When did Canada ratify the TFA?
  • Canada ratified the TFA on December 16, 2016.
8. Does the TFA impact privacy/protection of confidential information?
  • No. The TFA does not require Canada to share information that would be contrary to Canadian privacy laws.
  • Appropriate safeguards are provided in the TFA to enable governments to continue to protect confidential business information.
  • Canada will apply these safeguards to prevent and limit sharing, use and disclosure of confidential information.
9. How does the TFA differ from Canada’s free trade agreements (FTAs)?
  • The TFA’s provisions complement those found in Canada’s FTA trade facilitation chapters. The TFA addresses a broader range of trade facilitation measures, since the TFA is a specialized agreement that reflects the more diverse priorities of WTO Members.
  • Trade facilitation provisions in Canada’s FTAs to date have focused on Canada’s priorities, including transparency, release of goods, risk management and the advance issuance of decisions on tariff classifications (advance rulings).
  • These interests are well-reflected in the TFA which advances Canada’s interests with countries with which it does not have an FTA.
10. Does Canada have a national committee on trade facilitation?
  • WTO Members are expected to establish or maintain a national committee on trade facilitation to facilitate domestic coordination and the implementation of the TFA.
  • The Government of Canada uses well-functioning networks already in place to undertake the necessary strategic planning and to coordinate trade facilitation domestically, including with private sector stakeholders.
  • More specifically, Global Affairs Canada and the Canada Border Services Agency use inter-governmental avenues of communication between the departments and agencies responsible for the application of import, export and transit requirements at the border, as well as existing mechanisms for consultations with private stakeholders.
  • These processes serve as Canada’s national coordinating committee.
11. Which government departments are responsible for trade facilitation in Canada?
  • In Canada, trade facilitation involves policies, procedures, legislation, and other measures implemented by the Canada Border Services Agency and partners in other government departments, including Health Canada.
12. How will Canada help developing countries implement the TFA?
  • Canada is a founding donor to the Global Alliance for Trade Facilitation (GATF), a public-private platform that will support the TFA implementation efforts of developing countries by leveraging private sector expertise, leadership and resources to achieve commercially meaningful reforms. Canada is contributing $10 million to the GATF over 7 years (2015-2022).
13. Did Canada require legislative amendments to comply with the TFA?
14. Why were legislative amendments enacted on December 12, 2016?
  • Amendments to the Food and Drugs Act, Pest Control Products Act, Radiation Emitting Devices Act, Canada Consumer Product Safety Act, and the Hazardous Products Act, and the Canadian Environmental Protection Act, 1999 were necessary to implement two provisions of the TFA related to the treatment of rejected goods and the freedom of transit of goods destined for other countries.
  • The enactment of this Act on December 12, 2016, enabled Canada to ratify the TFA on December 16, 2016..
15. What are the implications of the Act for Canada?
  • The Actprovides the legislative authority to allow:
    • The Canada Border Services Agency, on behalf of Health Canada, to dispose of rejected goods that do not meet certain health and technical requirements, in lieu of allowing importers to return the goods to the exporter, and;
    • Health Canada and Environment and Climate Change Canada to exempt certain goods in transit from the requirement to comply with Canadian technical regulations, provided that certain conditions are met, where necessary, to protect health, safety and the environment.
  • The Act facilitates trade without affecting Canada’s ability to protect the health and safety of Canadians and the environment from any risks associated with non-compliant goods or goods in transit through Canada.
16. Which types of products are impacted by the Act?
  • Health products, pesticides, radiation emitting devices, consumer products, cosmetics, cleaning products and hazardous products are subject to the proposed amendments.
17. What specific provisions of the TFA does the Act address?
  • The Actenables Canada to comply with Articles 10.8.1 and 11.8 of the TFA by:
    • ensuring that Canada’s actions to seize or dispose of non-compliant goods fall within Article 10.8.1 of the TFA.
    • exempting goods in transit from the requirement to comply with technical regulations as per Article 11.8 of the TFA, provided certain conditions and safeguards are met, where necessary, to protect the health and safety of Canadians as well as the environment.
18. How do the legislative amendments in the Act deal with non-compliant goods (Article 10.8.1 of the TFA)?
  • Health Canada’s legislative amendments ensure that its actions vis-à-vis non-compliant goods, such as seizure or disposal of such goods, fall within the exemption provided in TFA Article 10.8.1
  • Health Canada’s legislative amendments identify criteria under which non-compliant goods could be, either: (1) returned to the exporter, or (2) seized, detained, forfeited and/or disposed of.
  • No amendments to Environment and Climate Change Canada statutes are required to comply with Article 10.8.1.
19. How are specific products impacted by the legislative amendments in the Act dealing with non-compliant goods (Article 10.8.1 of the TFA)?
  • Under the Food and Drugs Act, health products such as formulations of clozapine products that are not approved for sale in Canada will continue to be rejected at the border. The importer would then be offered the option of returning it to the sender or re-consigning it to a third-party outside of Canada unless it poses health and safety risks, at which point the non-compliant product could be seized.
  • Pest control products (e.g., herbicides, fungicides, insecticides, etc.) that are non‑compliant with the Pest Control Products Act could be returned/re-consigned to the importer unless they pose unacceptable risks to a third party, at which point the non-compliant product could be seized..
  • Under the Radiation Emitting Devices Act, devices such as x-ray machines could be returned or re-consigned to the importer unless they pose unacceptable risks such as the level of radiation they emit, at which point the non-compliant product could be seized.
  • Consumer products that are found to be non-compliant with the Canada Consumer Product Safety Act could be returned/re-consigned to the importer, unless other measures are required for health or safety reasons such as the seizure of products that pose a danger to human health or safety.
  • Hazardous chemicals that do not comply with the Hazardous Products Act could be returned/re-consigned to the importer unless other measures are required for health or safety reasons, in which case they may be seized and not returned.
20. How do the legislative amendments in the Act deal with goods in transit (Article 11.8 of the TFA)?
  • Health Canada’s legislative amendments created the legal authority to exempt certain goods in transit through Canada from the requirement to comply with technical regulations, subject to certain conditions being met.
  • These conditions, which apply to goods covered by statutes administered by Health Canada, provide the oversight necessary to:
    • Identify goods in transit which may not comply with Canadian technical regulations, and
    • Protect the environment and the health and safety of persons who may come into contact with certain pesticides and pharmaceutical drugs.
  • Environment and Climate Change Canada’s legislative amendments created the legal authority to exempt cleaning products and water conditioners in transit through Canada from the requirement to comply with technical regulations.
21. How are specific products impacted by the legislative amendments in the Act dealing with goods in transit (Article 11.8 of the TFA)?
  • Health products such as formulations of clozapine products that are not approved for sale in Canada will be permitted to transit through Canada provided that certain conditions are met to mitigate the risk of diversion.
  • Unauthorized pest control products such as unregistered active ingredient concentrates will be permitted to transit through Canada only if certain conditions are met, to mitigate potential risks to the health and safety of workers, and to the environment associated with the transit of such goods.
  • Cleaning products such as laundry detergents, dish-washing compounds, and household, commercial, or industrial cleaners that do not comply with technical regulations, will be permitted to transit through Canada.
22. What are the risks of allowing transit through Canada of non-compliant goods?
  • These risks are limited and manageable.
  • Existing measures under the Customs Act limit the risks that goods in transit could be diverted into the Canadian market.
  • Canada limits potential risks of accidents involving dangerous goods in transit by applying existing safeguards under the Transportation of Dangerous Goods Act to protect the health and safety of Canadians as well as the environment.
  • Health Canada’s legislative amendments to the Pest Control Products Act maintain oversight for pesticides not captured under the Transport of Dangerous Goods Act by providing for measures to help protect the environment and health and safety.
23. Is there any environmental risk involved with the amendment to the Canadian Environmental Protection Act, 1999?
  • The risk of increased environmental impacts as a result of this amendment to provide for the exemption of goods in transit from the application of technical regulations is low.
  • The particular risk that cleaning products or water conditioners in transit would end up in the water is also considered low.
  • Existing measures under the Customs Act limit the risks that goods in transit could be diverted into the Canadian market.
24. How will the TFA and the Act impact pharmaceutical drugs manufactured in Canada for export only?
  • The intent of the TFA is to facilitate trade, including for Canadian exporters. Food, pharmaceutical drugs, cosmetics and devices manufactured in Canada for export only are required to comply with foundational requirements in the Food and Drugs Act, generally targeting deception, unsanitary manufacturing and products posing a risk of injury.
25. Do the amendments to the Food and Drugs Act apply to natural health products?
  • While most of the amendments to the Food and Drugs Act apply to all products, amendments to s. 37 for products manufactured or prepared in Canada intended for export only do not apply to natural health products within the meaning of the Natural Health Products Regulations.