A WTO Success The Trade Facilitation Agreement

In the time of Trump and Brexit one might easily conclude that globalization may have peaked and a return to a world of lower trade interdependence and protectionism is upon us. However, although I still believe Brexit will be a disaster for the UK it is not all doom and gloom. The good news is that recently the Trade Facilitation Agreement (TFA) has now reached the 2/3 of signatories required for its implementation. The aims of the TFA is simple it is to reduce the bureaucracy, time delays and corruption associated with exporting and importing goods.

Although we should treat WTO estimates of its impact with some degree of caution the TFA could increase global trade by 2.7% per year till 2030, increase global GDP by 0.5% and reduce trade costs by an average of 14.3%. It will be especially helpful to developing countries and to small and medium size companies that struggle with getting involved in international trade due to the bureaucracy and costs involved. I would say that it is easily the most significant boost to global trade of the last 20 years - since the Doha round which started in 2001 has yet to get anywhere near an agreement. I was recently involved with a programme about the WTO and TFA on PressTV. It may boost global trade by up to $1 trillion and help create up to 20 million jobs. In my view this kind of agreement more than justifies the annual cost of the WTO which is around 200 million Swiss Francs for 2016. We need international trade rules and means of settling trade disputes given the importance of global trade to the health of the global economy and this agreement will be a big step in boosting the global economy.