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Trade Facilitation Agreement comes into force


The WTO’s Trade Facilitation Agreement has come into force more than three years after its signature in Bali. After Rwanda, Oman, Chad and Jordan ratified the pact this week, the threshold of 110 member ratifications required for the text to come into force was reached on Wednesday (22 February 2017).

The WTO estimates that the pact, which sets rules on effective and corruption-free customs clearance, will reduce trade costs by 14.3 percent across the world. “The TFA is likely to reduce the time needed to import goods by over a day and a half and to export goods by almost two days, representing a reduction of 47 per cent and 91 per cent respectively over the current average”, the WTO estimates.

The EU’s trade commissioner Cecilia Malmström 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 TFA prescribes measures to improve transparency and predictability of trading across borders and to create a less discriminatory business environment. The pact’s provisions include improvements to the availability and publication of information about cross-border procedures and practices, improved appeal rights for traders, reduced fees and formalities connected with the import/export of goods, faster clearance procedures and enhanced conditions for freedom of transit for goods. The Agreement also fosters cooperation between customs and other authorities on trade facilitation and customs compliance issues.

To the WTO’s Director General Roberto Azevêd0, the coming into force the agreement “shows members’ commitment to the multilateral trading system and that they are following through on the promises made in Bali”. The WTO chief also thinks that the customs pact will “boost global trade by up to 1 trillion dollars each year, with the biggest gains being felt in the poorest countries”. To Azevêdo, “the impact will be bigger than the elimination of all existing tariffs around the world.”

Signatories of the TFA are the following: Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei Darussalam, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Afghanistan, Senegal, Uruguay, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica, Mongolia, Gabon, the Kyrgyz Republic, Canada, Ghana, Mozambique, Saint Vincent & the Grenadines, Nigeria, Nepal, Rwanda, Oman, Chad and Jordan.