The World Trade Organization (WTO) has announced that their Trade Facilitation Agreement (TFA), which seeks to ease customs norms, has entered into force. This has been an ongoing effort as the recent ratification by Chad, Jordan, Oman and Rwanda means the deal has now reached the pre-determined threshold of two-thirds (110) WTO members required for its entry into force.
Bureaucratic delays and “red tape” pose a burden for moving goods across borders, and the TFA aims to simplify and modernize export and import processes. The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other authorities on trade facilitation and customs compliance issues.
Speaking about the recent ratification of the agreement, Mr. Roberto Azevêdo, Director-General of the WTO, said: “In 2013, we did something that the WTO had never done before — we delivered a new multilateral trade deal — the Trade Facilitation Agreement. It was a major breakthrough and it took a lot of hard work, flexibility, creativity and political will. I am very happy to announce that the WTO Trade Facilitation Agreement has now entered into force, having crossed the required legal threshold of two-thirds of the WTO membership. By ratifying the agreement, WTO members have shown their commitment to the multilateral trading system. They have followed through on the promises made when this deal was struck in Bali just over three years ago, and by bringing the deal into force we can now begin the work of turning its benefits into reality.”
Mr. Robert Keen, Director General of BIFA said: “This agreement aims to simplify and clarify international import and export procedures, customs formalities and transit requirements. It should make trade-related administration easier and less costly, thus helping to provide an important and much needed boost to global economic growth. If better border procedures and faster, smoother trade flows result from the agreement and help to revitalize global trade, BIFA members, which facilitate much of the UK’s visible trade, will benefit.”
Mr. Azevêdo continued: “Estimates show that the full implementation of the Agreement could reduce trade costs globally by an average of 14.3 percent. Developing and least-developed countries in particular stand to gain from the full implementation of the Agreement as they tend to have a higher level of trade costs. It will help these countries to diversify their trade. Developing countries could increase the number of products they export by 20 percent, while LDCs could see an increase of up to 35 percent. By 2030 the Agreement could add 2.7 percentage points per year to world trade growth and more than half a percentage point per year to world GDP growth. This impact would be greater than the elimination of all existing tariffs around the world. Now, working together, we have the responsibility to implement the Agreement and make those benefits a reality. I look forward to working with the membership on this, and I hope that today’s news will inspire us to further successes in the near future.