Emerging markets boost as Trade Facilitation Agreement ratified
The international trade deal is described as the most significant since the formation of the World Trade Organisation in 1995.
The international trade deal is described as the most significant since the formation of the World Trade Organisation in 1995.
The Trade Facilitation Agreement (TFA), described as the most significant multilateral trade deal to be concluded since the World Trade Organisation (WTO) was set up 22 years ago, has come into effect and is being hailed as a major boost to international trade.
In receiving four more ratifications for the agreement – from Rwanda, Oman, Chad and Jordan – the Trade Facilitation Agreement (TFA), the WTO has obtained the two-thirds acceptance of the agreement from its 164 members needed to bring the TFA into force.
“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,” said the WTO.
“Full implementation of the TFA is forecast to slash members’ trade costs by an average of 14.3%, 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.
“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%, with least developed countries (LDCs) likely to see an increase of up to 35%, according to the WTO study.
A total of 110 WTO members have now accepted the TFA: Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei Darussalam, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Afghanistan, Senegal, Uruguay, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica, Mongolia, Gabon, the Kyrgyz Republic, Canada, Ghana, Mozambique, Saint Vincent & the Grenadines, Nigeria, Nepal, Rwanda, Oman, Chad and Jordan.
Natalie Blyth, global head of trade and receivables finance at HSBC commented: “The ratification of the TFA is great news for every business that’s seeking opportunities for simpler, safer and cheaper international trade.
“By cutting red tape and making global supply chains more secure, the TFA will undoubtedly increase flows of cross-border business; enabling more small and mid-sized businesses to reap the benefits of trade, helping to boost economic prosperity and potentially adding US$1 trillion to global merchandise exports.
“It is also an important step towards the convergence of international standards and helps sustain the momentum of efforts to create new, mutually beneficial multilateral trade agreements.”