By receiving
four more ratifications for the Trade
Facilitation Agreement (TFA), the World
Trade Organisation has obtained the two-thirds acceptance of the agreement
from its 164 members needed to bring the TFA into force.
Indeed, the
action brings a major milestone for the global trading system as the first
multilateral deal was concluded in the 21 year history of the World Trade
Organization entered into force. The Federal Government had ratified the Trade
Facilitation Agreement making it the 107th World Trade Organisation member to
do so.
Some days ago, 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 entry into force of this agreement, which seeks to 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 per cent and 91
per cent respectively over the current average.
Implementing
the TFA is also expected to help new firms export for the first time. Moreover,
once the TFA is fully implemented, developing countries are predicted to
increase the number of new products exported by as much as 20 per cent, with
least developed countries (LDCs) likely to see an increase of up to 35 per
cent, according to the WTO study.
WTO boss,
Azevêdo welcomed the TFA’s entry into force, noting that the Agreement
represents a landmark for trade reform. He said: “This
is fantastic news for at least two reasons. First, it shows members’ commitment
to the multilateral trading system and that they are following through on the
promises made in Bali. Second, it means we can now start implementing the
Agreement, helping to cut trade costs around the world. It also means we can
kick start technical assistance work to help poorer countries with
implementation.
“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. But this is not the end
of the road. The real work is just beginning. This is the biggest reform of
global trade in a generation. It can make a big difference for growth and
development around the world. Now, working together, we have the responsibility
to implement the Agreement to make those benefits a reality.”
The
Agreement is unique in that it allows developing and least-developed countries
to set their own timetables for implementing the TFA depending on their
capacities to do so. A Trade
Facilitation Agreement Facility (TFAF) was created at the request of
developing and least-developed countries to help ensure they receive the
assistance needed to reap the full benefits of the TFA and to support the
ultimate goal of full implementation of the new agreement by all members.
(Guardian)
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