GENEVA: The first multilateral deal agreed at the World Trade Organization came into force Wednesday, a step billed as a milestone for the body facing unprecedented threats from a hostile US administration.
The Trade Facilitation Agreement (TFA) has now been ratified by 112 of the WTO’s 164 members, crossing the two-thirds threshold needed for activation, the Geneva-based organisation confirmed.
Under the deal, nations agreed to simplify and standardise customs procedures at borders to make it easier for goods to flow around the world.
WTO chief Roberto Azevedo said that the TFA was estimated to trim global trade costs by more than 14 percent and could boost global growth by half a percentage point per year.
“The trade facilitation agreement is the biggest reform of global trade this century,” Azevedo told journalists after Chad, Jordan, Oman and Rwanda submitted the clinching ratifications.
Poorer countries are expected to reap the most benefits from the TFA through provisions that will improve access to richer markets for their products.
The head of the Paris-based International Chamber of Commerce, Sunil Bharti Mittal, called the TFA’s ratification “a watershed moment for global trade.”
He said small businesses the world over had been shut out of international commerce because they lacked the resources to navigate “complex customs requirements.”
“By cutting unnecessary red-tape at borders,” the TFA will open markets to more players, he added in a statement.
Since its founding in 1995, the WTO has suffered high-profile setbacks in trying to craft major deals, notably in the stalled Doha Round process, which is striving to re-write global trading rules.
When negotiations on the TFA were successfully concluded in 2013 it marked a major victory for the WTO.
Azevedo claimed Wednesday that the relatively swift ratification process proved the deal was “a win-win for everyone”.
But more trouble almost certainly lies ahead following Donald Trump’s US election win.
The leader of the world’s top economy called the WTO a “disaster” during the campaign and threatened to pull the US out.