Trade – Image © jeayesy – Fotolia
(GENEVA) – The Trade Facilitation Agreement (TFA) the most significant multilateral trade deal concluded since the establishment of the World Trade Organisation (WTO) in 1995 – entered into force Wednesday.
Ratifications by Chad, Jordan, Oman and Rwanda mean the deal has reached the pre-determined threshold of 110 WTO members required for its immediate entry into force.
The aim of the agreement is to simplify and clarify international import and export procedures, customs formalities and transit requirements.
It will make trade-related administration easier and less costly, thus helping to provide an important and much needed boost to global economic growth. EU customs authorities will play a leading role in the implementation of the agreement, acting both as an example to follow and as an engine for further progress in trade facilitation within the EU and at international level.
The agreement will also help improve transparency, increase possibilities for small and medium-sized companies to participate in global value chains, and reduce the scope for corruption. The deal was agreed during the WTO Ministerial Conference in Bali in 2013.
The EU welcomed the agreement. Trade Commissioner Cecilia Malmstroem said: “Better border procedures and faster, smoother trade flows will revitalise global trade to the benefit of citizens and businesses in all parts of the world. Small companies, that have a hard time navigating daily bureaucracy and complicated rules, will be major winners.”
The biggest scope for improvement – and thus the greatest potential to reap benefits – is in developing countries. The EU wants this agreement to play a significant role in increasing developing countries’ involvement in global value chains. For that reason, the EU has committed 400 million to assist them with the reforms needed to comply with the rules set by the agreement.
In addition to its development dimension, the agreement also forms part of the EU’s efforts to help small and medium-sized European companies use the untapped potential of global markets.
Negotiations on trade facilitation started as part of the Doha Development Agenda. Recognising the substantial potential benefits of this agreement for all and, in particular, for developing countries, WTO Members agreed at the end of 2013 to prioritise a stand-alone deal. The resulting agreement involves all members of the WTO.
