GENEVA, SWITZERLAND — The World Trade Organization (WTO) is urging the full and swift implementation of the WTO Trade Facilitation Agreement (TFA). WTO said it has the potential to increase global merchandise exports by up to $1 trillion per year, according to the WTO’s flagship World Trade Report released on Oct. 26 in Geneva, Switzerland.
The first detailed study of the potential impacts of the TFA are based on a full analysis of the final agreement text. Significantly, the report also found that developing countries will benefit significantly from the TFA, capturing more than half of the available gains. Developed economies' exports are estimated to increase by between $310 billion and $580 billion per year and developing countries' exports are estimated to increase by between $170 billion and $730 billion per year.
“The world is more connected than ever before,” said Roberto Azevêdo WTO director-general. “More and more developing countries are seeking to join global trade networks. Yet, all too often, outdated and uncoordinated customs processes slow down the movement of goods and raise costs to prohibitive levels. By standardizing, streamlining and speeding-up customs processes around the world, the WTO's Trade Facilitation Agreement will help to solve this problem. It is global trade's equivalent of the shift from dial-up internet access to broadband — and it will have a similar impact.”
The TFA was agreed by WTO members at a ministerial conference in Bali, Indonesia in December 2013. It was the first multilateral agreement successfully negotiated at the WTO. The 2015 World Trade Report is the first major study since the agreement was reached in Bali to examine its economic implications in full. Previous studies which were published by other institutions in advance of the Bali conference produced various predictions about the potential effects of trade facilitation in general and the TFA in particular. The aim of this report is to provide a fresh, rigorous analysis based on a clause-by-clause study of the final agreement text.
“This report takes a rigorous, detailed look at the impact of the Trade Facilitation Agreement,” said Azevêdo. “It provides new evidence of the significant boost that the agreement will provide by expanding world trade, reducing costs and helping developing and least-developed countries to integrate into an increasingly globalized production system. The report also highlights previously unseen benefits for developing and least-developed countries, such as increased investment and economic diversification.
The report's findings support those of previous studies on the scale of the potential headline benefits while also giving significant further detail and outlining a range of other benefits of the agreement, particularly for developing and least-developed countries. For example, the TFA could help developing countries diversify their exports, increase their involvement in global value chains, expand the participation of small and medium enterprises in international trade, help to attract more foreign direct investment, increase government revenues and reduce corruption.