WORLDWIDE – The ratification by 110 member states of the WTO Trade Facilitation Agreement (WTO TFA) has been met with praise by trade bodies representing the international freight and logistics industry. The TFA is designed to facilitate trade globally by implementing measures such as simplifying paperwork, modernising procedures and harmonising customs requirements and is expected to substantially slash the costs and time needed to export and import goods.
According to the WTO the full implementation of the TFA is estimated to reduce global trade costs by an average of 14.3%, with African countries and least-developed countries forecast to enjoy the biggest average reduction in trade costs. Full implementation has also been found to potentially reduce the average time needed to import by 47%. Cuts in export time will be even more dramatic: estimates predict a 91% reduction of the current average.
In welcoming the agreement, international trade body FIATA said in a statement that ‘such a milestone agreement as the WTO TFA will no doubt turn the tide and remind governments that trade, and logistics at its service, are key stimuli to economic growth’. FIATA’s Customs Affairs Institute (CAI) Chairman, Steve Morris added that:
“The WTO TFA is hailed by the freight forwarding industry as a great achievement for the WTO and the international trading community. As the coin turns to implementation, FIATA and its members in 160 countries stand ready to play its part and collaborate with all governments as appropriate.”
Trade bodies in the UK were similarly enthusiastic. Robert Keen, Director General of the British International Freight Association (BIFA) 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.
“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.
By easing the time and costs burdens, the TFA is expected to increase exports from existing traders while also enabling new firms to export for the first time. Furthermore, the TFA is forecast to add up to 2.7% a year to world export growth and more than 0.5% a year to world GDP growth over the 2015-30 horizon. Developing countries are expected to enjoy larger gains than the global average with full implementation of the TFA estimated to boost their exports by 3.5% annually and augment their economic growth by 0.9% each year.
Overall, two thirds of all benefits are predicted to go to the developing and least-developed world.
