A trade accord that will boost global exports by $1 trillion should come into force within two weeks, the head of the World Trade Organization said, just as the rhetoric of U.S. President Donald Trump clouds the outlook for global trade.
The Trade Facilitation Agreement (TFA) will have a major impact on poorer countries, because it standardises and simplifies customs procedures, slashing the time, cost and complexity of taking goods over borders.
“In the WTO's history, it is the biggest agreement we ever reached,” WTO Director-General Roberto Azevedo told Reuters in an interview.
Jordan, Chad and Kuwait are all poised to ratify, which would tip the agreement over the required mark of 110 WTO members to take effect, Mr. Azevedo said.
“There are estimates that once fully implemented, this could have an impact of around 2.7 percentage points on trade expansion throughout the world every year until say 2030, and half a percentage point of GDP growth around the world.”
Where a product may previously have taken 6-7 weeks to arrive, the waiting time should be cut to a few days.
“Things are going to cross the border much more easily, much more transparently and at lower costs,” Mr. Azevedo said.
“If it’s truly implemented and done well, there will be almost no contact between the client and the (customs) authority,” Mr. Azevedo said. “When that happens the room for corruption basically disappears. And we know that at the border, corruption is a problem for many countries.”
The United States, European Union, China and Japan were among the early adopters, although big and rich countries have less to gain since their customs procedures are already at high levels.
Asked if the deal was the high point of global trade liberalisation, the veteran Brazilian trade negotiator said there was still a “rich agenda” of potential trade reforms, including for investment, services and small business.
Mr. Azevedo said it was too early to tell whether the new U.S. administration would be on board with those reforms, adding that much of what was being said about Mr. Trump’s plans for trade was speculation inferred from his previous comments. —Reuters