Business

WTO: 159 member countries agree on trade facilitation deal

The 159 member countries of the World Trade Organization's (WTO) have agreed on a trade facilitation deal which has the potential to add US$ 1 trillion and 21 million jobs to the global economy. The agreement, which is expected to take two years to enact, will aim at streamlining customs procedures and easing the flow of goods around the world.

Paperwork and delays at borders have long been nominated as among the “most costly and least predictable non-tariff barriers to trade” by companies, said Roberto Azevêdo, the WTO’s head. “For the first time in its history the WTO has delivered.”

Business leaders in the member countries have welcomed the agreement. US retail giant Walmart said the agreement would significantly reduce the costs of customs clearances, logistics, border measures and other inefficiencies and enhance our ability to deliver the right product at the right time and price. This is much needed as the retailers worldwide are under pressure to follow ethical practices, while keeping costs and prices under check.

The International Chamber of Commerce (ICC) said that the agreement reached on trade facilitation was expected to reduce cross-border transaction costs for companies by 10-15 percent. “This is good for business worldwide, especially for small- and medium-sized enterprises and developing countries,” said Victor K. Fung, former ICC Chairman and Chairman of the ICC World Trade Agenda, an initiative undertaken in partnership with the Qatar Chamber of Commerce and Industry.

To help developing economies in Africa and elsewhere meet requirements of the agreement as early as January 2014, donors including the EU, the World Bank and the OECD have promised to fund aid programs to train customs officials and develop infrastructure.

The agreement requires the removal of obstacles such as the mandatory requirement of customs brokers and sets up an international trade facilitation committee to keep pushing for the streamlining of bureaucracy. Under WTO rules the deal will take effect once it is ratified by two-thirds of the 159 member states.