All systems go for TFA

Key trade facilitation agreement enters in force with the potential to unleash trade growth in developing nations    The World Trade Organization said Wednesday it has secured enough country member ratifications to now bring the Trade Facilitation Agreement into force.
   Full implementation of the TFA, which was designed to streamline customs burdens, is expected to reduce WTO members’ trade costs by an average of 14.3 percent, with developing countries having the most to gain, according to a 2015 study by WTO economists.
   The TFA is also expected to reduce the time needed to import goods by more than a day and a half and to export goods by nearly two days, which represents a reduction of 47 percent and 91 percent respectively over the current average, according to the global trade body.
   “This morning, I received ratifications from Rwanda, Oman, Chad and Jordan, bringing the total number of ratifications to 112,” said WTO Director General Roberto Azevêdo in a press conference on Wednesday.
   “This means we have crossed the required legal threshold of two-thirds of the WTO membership. Therefore I am very happy to announce that the WTO Trade Facilitation Agreement has now entered into force.”
   Azevêdo called the TFA “the biggest reform of global trade in a generation.”
   The WTO said once the TFA is fully implemented, developing countries are forecast to increase the number of new products exported by up to 20 percent, with least developed countries (LDCs) likely to experience an increase of as much as 35 percent.
   “This would boost global trade by up to $1 trillion each year, with the biggest gains being felt in the poorest countries,” Azevêdo said. “The impact will be bigger than the elimination of all existing tariffs around the world.”
   The TFA includes 12 articles which contain numerous measures to “improve transparency and predictability of trading across borders and to create a less discriminatory business environment,” the WTO said.
   Specifically, the agreement’s provisions include improvements to the availability to information about cross-border procedures and practices, improved appeal rights for traders, reduced fees and formalities connected with the import/export of goods, quicker clearance procedures and improved conditions for freedom of transit for goods. TFA also contains measures for cooperation between customs administrations on trade facilitation and compliance matters.
   The TFA was concluded at the WTO’s 2013 Bali Ministerial Conference. The agreement was subsequently held up by India’s attempt to link the agreement to food security. A resolution was reached in November 2014, allowing the TFA to move forward. In January 2015, the United States became the third country to ratify the agreement.