The World Trade Organization (WTO) is seeking the full and swift implementation of its Trade Facilitation Agreement (TFA) which has the potential to increase global merchandise exports by up to $1 trillion per annum, according to a report released Monday.
Speaking in Geneva, Switzerland, WTO Director-General Roberto Azevedo said the study “provides new evidence of the significant boost that the agreement will provide by expanding world trade, reducing costs and helping developing and least-developed countries to integrate into an increasingly globalized production system.”
In addition, it highlights “previously unseen benefits,” such as increased investment and economic diversification.
Azevedo added, “This underlines the importance of implementing the agreement in full—and doing so as quickly as possible. In fact, the report shows that the benefits of the agreement will be substantially larger depending on the scope and pace of implementation. The more extensive and faster the implementation of the TFA, the greater the gains.”
WTO describes TFA— agreed by the organization’s members at a ministerial conference in Bali in December 2013—as the global trade equivalent of the shift from dial-up internet access to broadband by standardizing, streamlining and speeding up customs processes around the world.
The “2015 World Trade Report,” the first major study since the agreement was reached to examine its economic implications, found that full implementation of the TFA could reduce trade costs of WTO members by an average of 14.5 percent.
Key findings of the WTO study:
• Global merchandise exports are estimated to increase by between $750 billion and $1 trillion per annum.
• Developing countries’ exports are estimated to increase by between $170 billion and $730 billion per annum.
• Developed economies’ exports are estimated to increase by between $310 billion and $580 billion per annum.
• Overall boost to world export growth per annum is estimated at up to 2.7 percent.
• Overall boost to global GDP growth per annum is estimated at 0.5 percent.