This week saw the 50th government ratify the World Trade Organization’s (WTO) landmark Trade Facilitation Agreement (TFA), with the former Yugoslav Republic of Macedonia passing legislation to sign up to the deal.
The TFA is a vital agreement to boost growth by cutting red tape at borders. Many companies – particularly SMEs – are currently held back from exporting due to burdensome, and sometimes unpredictable, customs requirements. A recent study by the OECD estimated that border inefficiencies currently add around 15% on average to the cost of trading internationally – placing a far higher burden on companies than many existing tariff barriers.
The 50th ratification of the agreement is an important milestone on the road to realizing the potential of the TFA to drive growth, opportunity and job creation. 108 countries – accounting for two thirds of the WTO’s 161 strong membership – must ratify the deal for it to enter into force. ICC is calling governments to expedite ratification of the agreement ahead of the WTO’s 10th Ministerial Conference, known as MC10, in Nairobi this December.
Momentum is now clearly building on the TFA ahead of MC10. This is a vitally important deal to enable companies of all shapes and sizes to tap global markets. Implementing the agreement must be a core component of national efforts to boost competiveness and to enable job creation by the domestic private sector.
Commenting on the 50th ratification of the agreement, ICC Secretary General John Danilovich said: “Momentum is now clearly building on the TFA ahead of MC10. This is a vitally important deal to enable companies of all shapes and sizes to tap global markets. Implementing the agreement must be a core component of national efforts to boost competiveness and to enable job creation by the domestic private sector.”
Trade facilitation and the SDGs
The United Nations’ newly agreed Sustainable Development Goals (SDGs) place a key emphasis on trade as a driver of development. ICC has called on governments to implement the TFA as a “quick win” to deliver on the promise of the 2030 development agenda.
Mr Danilovich added: “By making trade simpler and less costly, the TFA has a central role to play in delivering on the Sustainable Development Goals by enabling trade for the world’s poorest. The global business community stands ready to work with governments to help maximize the benefits of this landmark agreement.”
Find out more about the WTO Trade Facilitation Agreement