Outside In | A good week for world trade, especially in Asia, as the TFA accord comes into force
There are estimates the deal can cut trade costs globally by over 14pc, and will boost global trade by 2.7pc a year by 2030. It will in particular aid developing economies, lifting their exports by over 30pc.
In Bangkok this week for the year’s first meeting of regional business leaders in the APEC Business Advisory Council one modest sliver of good news brought smiles to a week better marked by anxiety and uncertainty over mainly bad developments that have marked the past six months.
Even the good news, in better times, would have warranted little attention: the World Trade Organisation announced that the Trade Facilitation Agreement (TFA) intended to simplify border procedures so as to boost trade, and reduce costs linked with moving goods around the world, has at last come into force.
The TFA is the only global deal negotiated and agreed in the WTO since it was founded 23 years ago. Pretty much everyone supporting global free trade was celebrating. Hoang Van Dung, the Vietnamese chairman of ABAC, spoke for all when he said: “The TFA will help small as well as large firms, and those from developing countries, to participate more successfully in global markets by reducing red tape, costs and technical barriers to trade.”
But realists in Bangkok and elsewhere acknowledged that the celebration was rather hollow.
The TFA was a crumb on the table of the now-defunct Doha round of global trade negotiations. It was proposed by WTO director General Roberto Azevedo – and endorsed by the world’s trade ministers – in Bali in late 2013 as a single salvageable initiative after more than a decade of fractious and ultimately fruitless efforts to bring global trade rules into the 21st century.
