February 23, 2017
The World Trade Organization's (WTO) Trade Facilitation Agreement (TFA) officially entered into force on February 22nd following the announcement that Rwanda, Oman, Chad and Jordan submitted their instruments of acceptance to WTO Director-General Roberto Azevêdo, bringing the total number of ratifications over the required threshold of 110 members.
The entry into force of this agreement, which seeks to expedite the movement, release and clearance of goods across borders, launches a new phase for trade facilitation reforms all over the world and creates a significant boost for commerce and the multilateral trading system as a whole.
In Canada the TFA will particularly help small and medium-sized enterprises (SMEs) increase their exports, because trade costs are often disproportionately high for them.
The implementation of the TFA will help Canadian SMEs export to fast-growing emerging markets in Latin America and the Caribbean, Africa and Asia.
If all the provisions of the TFA are implemented by all the WTO members, Canada could achieve a reduction in trade costs of up to 11.4 percent, potentially leading to an increase in the total value of trade of up to 1.7 percent. Using Canada's 2013 two-way trade as a reference, this would be a $16.1-billion gain.
The TFA is the first multilateral trade agreement concluded since the establishment of the WTO in 1995. It was concluded at the Ninth WTO Ministerial Conference in Bali in 2013.