A ground breaking global agreement to make it easier to
trade across borders will enter into force following ratification
by two-thirds of the World Trade Organisation (WTO)
membership.
The first multilateral agreement successfully negotiated through
the WTO, and
now ratified by more than 110 countries, will come into force
immediately and will see WTO members benefit from
greater trade by cutting burdensome red tape associated with
goods exporting.
Once fully implemented, the global economy could see a benefit of
£70 billion.
International Trade Secretary, Dr. , said:
We have fully supported this historic agreement which will
remove some of the barriers to cross-border trade and could
benefit the UK economy by up to £1 billion. We will now work
with other WTO members to ensure
economies, both developed and developing, fully realise the
benefits it will bring to their citizens.
The UK has long supported initiatives that will make trade
across borders easier, but despite the work that has already
been done on border controls until now goods have continued to
be delayed at borders slowing trade flows and adding costs to
business which in turn might be passed on to consumers. We
welcome this WTO success story.
Over three-quarters of the WTO’s members are either
developing or transitioning into market economies. The Trade
Facilitation Agreement (TFA) will have the greatest
impact for the economies of the world’s poorest nations - to
sub-Saharan economies this could be upwards of $10billion per
year.
As a result of the TFA, those countries that
have ratified will be required to:
- publish fees and charges online
- introduce a ‘fast track’ for perishable goods – reducing the
amount of food that rots while waiting to cross borders
- allow pre-arrival processing of documentation
- allow the use of copies of documents, rather than originals
- allow for the right to appeal customs decisions
By helping to improve transparency, predictability and
consistency, the TFAshould lead to reduced
trade costs and create the environment for small and medium sized
enterprises to play a greater role in the international supply
chain.
Studies suggest the agreement – which largely concerns the cost
of clearing goods for import and export – will greatly reduce
costs, time and the number of documents required for goods to
cross borders. They also suggest the TFA could add over £70
billion to the global economy, of which the UK is expected to
benefit by up to £1 billion and could reduce worldwide trade
costs by between 12.5% and 17.5%.
Negotiations on the Trade Facilitation Agreement were concluded
at the WTO’s
Bali Ministerial Conference in December 2013 and since then work
has been under way to reach the two-thirds of WTO Members ratifications
required for the TFA to come into
force.
It has long been shown that trade lifts countries out of poverty
and the UK will continue to work with developing countries to
help them ratify and implement the agreement to ensure they
benefit from reduced trade costs and waiting times.
