Deal to streamline world trade takes effect
The first multilateral trade agreement reached under the World Trade Organization since it was created over a generation ago has taken force, aiming to streamline cross-border trade to the benefit of the developing world in particular.
WTO Director-General Roberto Azevedo said Wednesday that the required two-thirds of member states have ratified the accord. He said estimates show that full implementation of the deal would reduce trade costs globally by an average of more than 14 per cent.
"This is fantastic news," he told reporters at WTO headquarters in Geneva. "By ratifying the agreement, WTO members have shown their commitment to multilateral lateral trading system."
That multilateral trading system has been under a cloud recently amid concerns about possible United States protectionism under President Donald Trump.
Azevedo said he had not spoken with any US administration officials on trade, but noted that the US was among the first countries to ratify the agreement.
"This deal is about lowering trade costs, and as far as I know, all countries, all WTO members — are in favour of that, regardless of what their domestic situation is at any point in time," he said.
He noted that the United States was involved in pushing for the conclusion of the agreement "and I don't see any reason why that should change at this point in time."
"I do not think we are facing anything that is unmanageable," he said of the US concerns about possible unfair trade. "I honestly don't know what kind of trade policy will come."
The Trade Facilitation Agreement, concluded in 2013, aims to cut red tape and speed up the flow of goods across borders, such as by prioritising perishable goods and releasing products before customs duties are levied. It will also help WTO member states accept e-payments, limit export and import fees, and harmonise trade standards.
WTO says the agreement could add 2.7 percentage points per year to world trade growth by 2030.
In a statement, the International Chamber of Commerce hailed a "watershed moment" for world trade and said the agreement could "provide a boost to global trade flows of over US$1 trillion."