#WTO Trade Facilitation Agreement will bring major gains to developing countries

| February 23, 2017 | 0 Comments

170223WTOTradeFacilitAgreement2Ambassador François Xavier Ngarambe of Rwanda, Ambassador Malloum Bamanga Abbas of Chad, World Trade Organization Director General Azevêd, Ambassador Saja Majali of Jordan and Abdulla Nasser Musallam Al Rahbi of Oman presenting their countries’ TFA instruments of acceptance

The WTO has obtained the two-thirds acceptance of the agreement from its 164 members needed to bring the Trade Facilitation Agreement (TFA) into force. Rwanda, Oman, Chad and Jordan submitted their instruments of acceptance to WTO Director-General Roberto Azevêdo, bringing the total number of ratifications over the required threshold of 110.

The agreement will expedite the movement, release and clearance of goods across borders, launches a new phase for trade facilitation reforms all over the world and creates a significant boost for commerce and the multilateral trading system as a whole.

Full implementation of the TFA is forecast to slash members’ trade costs by an average of 14.3 per cent, with developing countries having the most to gain, according to a 2015 study carried out by WTO economists. The TFA is also likely to reduce the time needed to import goods by over a day and a half and to export goods by almost two days, representing a reduction of 47% and 91% respectively over the current average.

DG Azevêdo welcomed the TFA’s entry into force, noting that the Agreement represents a landmark for trade reform. He said: “This would boost global trade by up to $1 trillion each year, with the biggest gains being felt in the poorest countries. The impact will be bigger than the elimination of all existing tariffs around the world. It also means we can kick start technical assistance work to help poorer countries with implementation.”

EU plays leading role

EU customs authorities will play a leading role in the implementation of the agreement, acting both as an example to follow and as an engine for further progress in trade facilitation within the EU and at international level.

The agreement will also help improve transparency, increase possibilities for small and medium-sized companies to participate in global value chains, and reduce the scope for corruption. The deal was agreed during the WTO Ministerial Conference in Bali in 2013.

Trade Commissioner Cecilia Malmström said: “Better border procedures and faster, smoother trade flows will revitalise global trade to the benefit of citizens and businesses in all parts of the world. Small companies, that have a hard time navigating daily bureaucracy and complicated rules, will be major winners.”

International Co-operation and Development Commissioner Neven Mimica added: “Trade is a key driver for sustainable development. The new agreement will help tapping the huge potential of trade. I am ready to assist our partner countries to make the most of this agreement.”

The biggest scope for improvement – and thus the greatest potential to reap benefits – is in developing countries. The EU wants this agreement to play a significant role in increasing developing countries’ involvement in global value chains. For that reason, the EU has committed €400 million to assist them with the reforms needed to comply with the rules set by the agreement.

In addition to its development dimension, the agreement also forms part of the EU’s efforts to help small and medium-sized European companies use the untapped potential of global markets.

The EU has been one of the promoters of the deal and led the efforts towards its conclusion. Following the ratification of the deal by the Council and the European Parliament in 2015, the EU actively encouraged other WTO members to approve the deal without delay. While the critical mass has now been reached, allowing the agreement to become effective, the EU hopes the remaining WTO Members will ratify the agreement in the near future.

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Category: A Frontpage, Economy, EU, World

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