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Mexico ratifies Trade Facilitation Agreement
Mexico has ratified the WTO’s Trade Facilitation Agreement (TFA) in the latest signal of support for the landmark global deal. Mexico’s WTO Ambassador Fernando De Mateo presented his country’s instrument of ratification to WTO Director-General Roberto Azevêdo on 26 July.
With the acceptance by Mexico, the number of TFA ratifications now stands at 87, representing more than three-quarters of the ratifications needed to bring the Agreement into force. The TFA will enter into force once two-thirds of Members have domestically ratified a Protocol of Amendment and notified the WTO of their acceptance of this Protocol.
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.