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Saint Vincent & the Grenadines ratifies the Trade Facilitation Agreement
Saint Vincent & the Grenadines has ratified the Trade Facilitation Agreement (TFA), making it the 106th WTO member to do so. Only four more ratifications from members are needed to bring the TFA into force.
Saint Vincent & the Grenadines’ instrument of acceptance was submitted to the WTO on 9 January. The TFA will enter into force once two-thirds of the WTO membership has formally accepted the Agreement.
One immediate impact from entry into force of the TFA is that all developed country Members of the WTO will start applying all of the substantive provisions of the Agreement from the date it takes effect. Developing countries and least developed countries (LDCs) will also begin applying those substantive provisions of the TFA they have indicated they are in a position to do so from the date of entry into force; these commitments are set out in the Category A notifications which 90 members have submitted to date.
The TFA has a huge potential to reduce trade costs thereby boosting trade between countries and raising world income. OECD studies find that the implementation of the TFA could reduce worldwide trade costs between 12.5% and 17.5%. Developing country exports are expected to grow between 14% and 22% while becoming more diversified. Companies are more likely to become more profitable which should encourage domestic investment. In addition, foreign direct investment is likely to be attracted to countries that fully implement the TFA. Finally, increased trade means better employment prospects for workers and greater revenue collection by the government.