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WTO's Trade Facilitation Agreement Enters Into Force

by Ulrika Lomas, Tax-News.com, Brussels

23 February 2017


The European Union (EU) has welcomed the entry into force of the WTO Trade Facilitation Agreement (TFA), which aims to modernize and simplify customs and border procedures.

To enter into force, the TFA must be ratified by two-thirds of WTO members. Ratifications by Chad, Jordan, Oman, and Rwanda mean that the deal has now reached the threshold of 110 WTO member ratifications and can immediately enter into force.

EU Trade Commissioner Cecilia Malmström said: "Better border procedures and faster, smoother trade flows will revitalize global trade to the benefit of citizens and businesses in all parts of the world. Small companies, that have a hard time navigating daily bureaucracy and complicated rules, will be major winners."

Neven Mimica, the Commissioner for International Cooperation and Development, added: "Trade is a key driver for sustainable development. The new agreement will help tapping the huge potential of trade. I am ready to assist our partner countries to make the most of this agreement."

According to the WTO, the TFA has the potential to increase global merchandise exports by up to USD1 trillion.

The agreement aims to simplify and clarify international import and export procedures, customs formalities, and transit requirements. The EU said that the TFA will also help improve transparency, increase the possibilities for small- and medium-sized companies to participate in global value chains, and reduce the scope for corruption. The EU has committed EUR400m (USD421.9m) to assist developing countries with the reforms needed to comply with the rules established by the agreement.

The EU now hopes that the remaining WTO members will ratify the agreement in the near future.

A 2015 WTO study found that full implementation of the TFA could reduce members' trade costs by an average of 14.3 percent. It anticipates the TFA reducing the time to import goods by more than a day and a half, and the time to export by almost two days.

TAGS: Chad | business | export duty | World Trade Organisation (WTO) | trade treaty | agreements | Jordan | Rwanda | import duty | trade | European Union (EU) | Oman | Europe

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