July 29, 2016
Mexico, Peru and Saudi Arabia ratified the World Trade Organization's (WTO) Trade Facilitation Agreement (TFA) this week. The submission of the three countries' instruments of acceptance means that more than 80 per cent of the ratifications needed to bring the TFA into force have now been received.
Negotiations on the Agreement on Trade Facilitation (TFA) were concluded at the WTO's 9th Ministerial Conference in Bali, Indonesia, in December 2013.
The purpose of the Agreement is to modernize and simplify customs and border procedures, and lower trade costs. It is expected that most economic gains will flow to developing countries.
The WTO estimates that the TFA could boost global merchandise exports by up to $1 trillion, with up to $730 billion accruing to developing countries and reduce trade costs by an average of over 14 percent, with average reduction of nearly 17 percent for least developed countries. Even in the event that some WTO Members do not move to fully implement the TFA, the real-world impact will be significant. Mechanisms are in place to assist developing countries implement the TFA.
The TFA will enter into force once two-thirds of the WTO's 162 members have formally accepted the Agreement. With the acceptance by Mexico, Peru and Saudi Arabia, the number of TFA ratifications now stands at 89.