Roberto Azevedo, director-general of the World Trade Organization, announces the news of the World Facilitation Agreement finally in full force with the ratification of Rwanda, Oman, Chad, and Jordan. This makes more than two thirds of the WTO membership, which means the organization can now commit to a multilateral trading system. The purpose of the agreement is to streamline, simplify, and standardise customs procedures in an attempt to cut trading costs around the world. Full implementation of the Agreement could help cut costs globally at an average of 14.3 percent.
The countries that should gain the greatest benefits from the Agreement are developing and least-developed countries (LDCs). These countries will be able to diversify their trade much more, with developing countries increasing their exports by 20 percent and LDCs increasing exports by 35 percent. It will greatly help them to enter into more foreign markets.
The Agreement has high expectations, hoping to see an increase of 2.7 percent per year to the world’s trade growth and more than half a percent to the world’s GDP growth.
Azevedo believes the Agreement is changing things up completely in saying, “The Agreement also broke new ground in the way it was designed. It provides developing countries and LDCs with the flexibility to tailor the implementation of their commitments according to their specific needs and levels of development.”
He believes the Trade Facilitation Agreement is the biggest reform in global trade of this century. Hopefully the innovative advancements in this agreement can influence further progress in the future.