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Faster trade deal comes into force
[ February 22, 2017 // Chris ]The World Trade Organisation’s Trade Facilitation Agreement (TFA) came into force on 22 February after it was ratified by two-thirds of its members. Rwanda, Oman, Chad and Jordan submitted their acceptance, bringing the total number of ratifications over the required two thirds threshold of 110.
The agreement aims to speed up movement, release and clearance of goods across borders, and, when fully implemented, could reduce costs of international transactions by an average of 14.3%, but with even bigger savings for developing countries, says WTO. The TFA also aims to cut the time needed to import goods by over a day and a half and to export goods by almost two days, respectively a reduction of 47% and 91% over current average times.
TFA is also expected to help new firms export for the first time and increase the range of products exported by developing countries.
WTO director-general Roberto Azevêdo described TFA as the biggest reform of global trade in a generation.
Developing and least-developed countries will be allowed to set their own timetables for implementing it while developed countries have committed to immediately implement the Agreement, which sets out a broad series of trade facilitation reforms. Spread out over 12 articles, the TFA prescribes measures to improve transparency and predictability of trading across borders and to create a less discriminatory business environment. These include improving the availability of information about cross-border procedures and practices, improved appeal rights for traders, reduced fees and formalities for the import/export of goods, faster clearance procedures and enhanced conditions for transit goods. It also contains measures for effective cooperation between customs and other authorities on trade facilitation and customs compliance issues.
The news was welcomed by BIFA director general Robert Keen, although he warned that it could be a high-water mark in the history of trade liberalisation. He 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 revitalise global trade, BIFA members, which facilitate much of the UK’s visible trade, will benefit.”
However, he also warned: “Of course, of late, some nations have made it clear that they intend to scale down multi country free trade deals and switch to bilateral relationships, marking a return to the bad old days of protectionism.
“BIFA believes that the world has benefited immeasurably from liberalised trade. Not only has consumer choice been enriched in many countries, but also out-sourcing of production has brought valuable employment to developing economies throughout the world. BIFA members have worked to bring these products to the UK and taken UK production to customers abroad.”
The International Air Transport Association (IATA) also welcomed TFA, saying it would cut red tape at the border and make for faster, cheaper and easier trade. It was also “a particularly timely reminder of the dangers of the current protectionist rhetoric that we are seeing in various parts of the world.”