GENEVA –An international agreement forecast to boost global trade by $1 trillion (£800bn) a year has come into force.
The Director General of the World Trade Organization (WTO), Roberto Azevedo, called it “the biggest reform of global trade in a generation”.
The Trade Facilitation Agreement (TFA) involves streamlining customs procedures.
Mr Azevedo said it would have a bigger impact than eliminating all existing taxes on imports, known as tariffs.
It involves countries signing up to a long list of reforms, including easier access for businesses to information, reduced fees and simpler and faster procedures.
WTO economists estimated it would cut the cost of trading by 14.3%, and that developing nations would gain the most.
TFA is one of the few successes of a much wider set of negotiations that were launched in late 2001 in the Qatari capital and known as the Doha Round.
It is not the only product of the Doha Round, but most of the negotiating agenda ran into the sand.
The TFA was finally agreed at a meeting in Bali 2013, but could not come into force until 110 countries had ratified it. That is what has now happened.
Mr Azevedo said the agreement would boost global trade by up to $1 trillion a year.
This development comes at a time when there is increasing uncertainty about the outlook for the agenda of increasing trade liberalisation that the WTO embodies.
The new US President Donald Trump wants to renegotiate the country’s trade agreement with Canada and Mexico.
He has even suggested that he might, in some circumstances want to pull the US out of the WTO, although he has not repeated that idea recently.
At the news conference announcing the TFA’s coming into force, Mr Azevedo said he had heard President Trump’s concerns, but did not think it would prevent the WTO from making progress.
“I have seen situations like this arise over and over again, where situations of uncertainty or predictability prevail, especially in transition,” he noted.
Trade experts sometimes talk about the “low hanging fruit” in negotiations, the issues that are easier to agree, usually because the countries involved have less trouble getting them accepted at home.
IATA welcomes the deal
Meanwhile the International Air Transport Association (IATA) has lauded  deal  calling it the right measure to cut red tape.
The new agreement according to Alexandre de Juniac, IATA’s Director General and CEO, will cut red tape at the border for faster, cheaper and easier trade.
“That’s great news for airlines, which deliver about a third of the goods traded across borders by value,   he said adding that the deal is a timely reminder of the dangers of the current protectionist rhetoric that the world is experiencing in various parts of the world.
Trade leads to growth; and growth results in prosperity. With the treaty now in force, we urge governments to move forward with early implementation so that the TFA’s substantial benefits can be realized,   de Juniac noted.
Source: The New Times

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