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WTO Members welcome entry into force of the Trade Facilitation Agreement
WTO Members hailed the entry into force of the Trade Facilitation Agreement (TFA) as a historic achievement at a meeting of the General Council on 27 February. In welcoming this milestone, members pledged to advance work on implementing the TFA so that the full benefits of the Agreement can be reaped.
The TFA, the first multilateral deal concluded in the 21 year history of the WTO, entered into force on 22 February after the organization obtained the needed acceptance from two-thirds of its 164 members for the agreement to take effect.
In his address to WTO Members, Director-General Roberto Azevêdo said:
“By ratifying the agreement, Members have shown their commitment to the multilateral trading system. You have followed through on the promises made when this deal was struck in Bali. And by bringing the deal into force we can now begin the work of turning its benefits into reality.”
DG Azevêdo also thanked the members for their considerable efforts to reach this historic juncture. “This achievement belongs to all of you,” he said.
The Director-General, in his capacity as depositary of the WTO Agreements and their amendments, signed the official depositary notification of the TFA's entry into force. He handed over the notification to General Council Chair Ambassador Harald Neple (Norway) at the meeting.
“The Agreement on Trade Facilitation is a defining multilateral achievement of our time,” Ambassador Neple said. “It is practical, modern and global and it symbolizes the essence of the WTO: members from all corners of the globe coming together, overcoming differences and responding to pressing trade issues for the benefit of all,” he said.
The chair called on members who have not yet ratified the TFA to do so soon and to deposit their instruments of acceptance. All members, the chair added, must work together to fully implement the Agreement.
All delegations taking the floor at the meeting—representing developed, developing and least-developed countries (LDCs)—welcomed the TFA's entry into force.
Cambodia, speaking on behalf of the least-developed countries (LDC) group, said the milestone marked a very important start to members' work to achieve results in trade facilitation. Cambodia, along with several other delegations, emphasized the need of developing countries and LDCs for implementation assistance.
Several delegations meanwhile echoed the chair's call for the remaining members to ratify the TFA while also offering their support for capacity building for the Agreement's implementation.
Many also remarked that the TFA's entry into force demonstrated Members' collaboration across various levels of development and could serve as a model for more WTO agreements in the future.
The Agreement is unique in that it allows developing and least-developed countries to set their own timetables for implementing the TFA depending on their capacities to do so – and it provides for support to help them develop their capacity. The Trade Facilitation Agreement Facility (TFAF) was created at the request of developing and least-developed countries to help ensure they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members. The TFA further provides for the establishment of a Committee on Trade Facilitation to periodically review the Agreement’s operation and implementation.
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.