Implementation of the WTO Trade Facilitation Agreement (TFA) has the potential to increase global merchandise exports by up to $1 trillion per annum, according to the WTO’s flagship World Trade Report released in Geneva yesterday.
The report also found that developing countries would benefit significantly from the TFA, capturing more than half of the available gains.
“The world is more connected than ever before. More and more developing countries are seeking to join global trade networks. Yet all too often outdated and uncoordinated customs processes slow down the movement of goods and raise costs to prohibitive levels,” said director-general Roberto Azevêdo at the launch of the report.
“By standardising, streamlining and speeding up customs processes around the world, the WTO's Trade Facilitation Agreement will help to solve this problem. It is global trade's equivalent of the shift from dial-up internet access to broadband — and it will have a similar impact.”
The significant impact of the TFA is spelt out in the following figures:
- Global merchandise exports estimated to increase by between $750 billion and $1 trillion per annum.
- Developing countries' exports estimated to increase by between $170 billion and $730 billion per annum.
- Developed economies' exports estimated to increase by between $310 billion and $580 billion per annum.
- Fuller, faster implementation of the TFA will increase the likelihood of impacts reaching the higher ends of these ranges.
- Overall boost to world export growth per annum estimated at up to 2.7 per cent.
- Overall boost to global GDP growth per annum estimated at 0.5 per cent.
The TFA is also expected to help developing countries diversify their exports. If the TFA is fully implemented, developing countries could increase the number of new products exported by as much as 20%, with LDCs likely to see a much bigger increase of up to 35%. Developing countries are expected to enter an additional 30% more foreign markets and LDCs 60% more, according to the report.
