WTO TRADE FACILITATION AGREEMENT GUIDE

The Agreement on Trade Facilitation was adopted at the World Trade Organization’s 9th Ministerial Conference in Bali, Indonesia, in December 2013. This Agreement is the first major agreement to have been reached by WTO Member States since the conclusion of the Uruguay Round 20 years ago.

Barely was the ink dry on the Uruguay Round of multilateral trade negotiations concluded in 1993 than some WTO Member States were already thinking about the next round. Amongst the issues that featured in this thinking was trade facilitation. The uncertainty over how long it will take to clear a border crossing creates unpredictability, and adds cost to business that are eventually passed on to consumers in countries where consumers are least able to afford them. Uncertainty in supply chains also acts as a disincentive to potential business investors, who rely on efficient supply chains to minimise inventory costs. Companies have to tie up capital in extra holding costs above the levels that should be necessary. This is especially true for businesses in developing countries, which face these delays and uncertainties on a daily basis.

Inefficient border procedures also add costs to the very authorities whose job it is to control the borders. Over-zealous inspection can actually delay revenue collection. When authorities are intent on maximizing collection from import duties and other border taxes by checking every consignment that passes across the border, they cause queues to form at border points; with faster traffic-flows, revenues could be collected more efficiently post-clearance from compliant traders.

Trade facilitation aims at simplifying not only the documentation required to clear goods, but also the procedures employed by border agencies. Focusing on the biggest risks allows border agencies to speed up the flow of goods across the border, and increases the collection of duties. Trade facilitation has been described as a classic ‘win-win’ subject for developing and developed countries, since there should be no losers. Yet some developing countries have been concerned about the potential costs of implementing trade facilitation commitments, and have sought commitments from developed countries and other donors to assist in the implementation process.

WTO members finally agreed to add trade facilitation to the Doha Development Agenda in 2004. The Agreement reached at Bali in late 2013 provides a framework of rights and obligations that should see reform of border procedures around the world, if legitimate requests from developing countries for technical assistance are met.

The agreement has the potential to be of particular benefit to traders in developing countries, who continually face lengthy and costly border delays. It will be important for business in developing countries to monitor its implementation in the countries with which they trade. This simple guide aims at helping business understand the obligations that developing countries have accepted – or will in due course accept, so that they can work in partnership with governments to arrive at outcomes that will benefit governments and traders alike.
Find the guide here.

Historic Trade Deal with Europe Moves Forward, Despite US Snooping

The US –EU transatlantic trade deal, will go to a second round of talks in mid- November, but could hit a stumbling block over Germany’s demand for data protection as a condition to signing the treaty.

The EU and US policymakers agreed to hold two more rounds of trade negotiations over the next two months, The Wall Street Journal reports. The first round will take place in Brussels on November 11-15 and cover investment and energy sector trade, as well as address regulatory issues. In December officials will congregate in Washington DC for another round of talks.

After learning about the NSA special surveillance program on more than 80 embassies and consulates worldwide, including German government offices and Chancellor Angela Merkel’s personal cell phone, Germany has pushed for tough data protection goals before the free trade pact is finalized.

US still hasn’t provided any guarantees it will curb spying on its allies.

First talks were held on July 8 in Washington DC.

Originally the second round of talks were scheduled for October 7-11 in Brussels, but were delayed due to the US government shutdown.

The Transatlantic Trade and Investment Partnership (TTIP), which has the potential to boost economic growth by $100 billion per year in reduced tariffs, was agreed on at  the G8 summit in  Northern Ireland in June.

Shortly after, NSA whistleblower Edward Snowden leaked information showing the extent of USespionage on allies abroad. In response, France and other EU members said there could be no trade negotiation unless the US could guarantee it would halt spying operation on EU allies.

The “once in a generation prize” could add as much as about $157 billion to the EU economy, over $125 billion to the US economy and as much as around US$ 133 billion to the rest of the world, UK Prime Minister David Cameron said at the G8 summit. Over 98 percent of EU tariffs would be eliminated under the accord.

President Obama said the ‘economic NATO’, which would be the world’s largest trade agreement, is a priority for his administration and will hopefully be signed by the end of 2013.

EU diplomats traveled to Washington to discuss the NSA spy fallout, but weren’t satisfied with the answers they received, which failed to justify the eavesdropping on EU leaders by the US.

The trade deal could be a vital economic turnaround for the 28 EU members, which are just starting to emerge from recession. In 2012, the EU’s economy was $17 trillion, according to Eurostat.

In the aftermath of extending bilateral trade ties, the deal is due to cover about 50 percent of global economic output, 30 percent of global trade and 20 percent of global foreign direct investment.

On November 1, Germany and Brazil submitted a new draft resolution to the UN General Assembly which calls for an end to excessive electronic surveillance, data collection, and other snooping techniques.

source: rt.com

image: Reuters / Tobias Schwarz

News from the USTR: US-Japan Trade Talks

Trade talks between the US and Japan continue today marking the strategic importance of concluding the TPP negotiations before the end of the year. US Trade Representative Michael Froman’s visit to Japan is an attempt for the two nations to jointly commit to the proposed TPP rulings without succumbing to the pressure from local lobbyists.

The Japanese government has vowed to protect tariffs on certain farm products while USTR Froman maintains the US’s goal of the elimination of tariffs.

Due to Japan’s tensions with China and Europe, exports to the US rose 18.4% this past year signifying the vital importance of strong cooperation between the US and Japan.

Danger of the Euro-Zone’s Declining Economy

As unemployment rises, another quarter of recession may occur in the European economy. On Friday, February 21 some European nations forecasted missing their government deficit targets despite many rounds of spending cuts. The region’s economy is expected to grow later this year, but the 17 country union has spent the last three years in the slumps.

 

The Obama administration worries how the European Union’s declining economy will affect the United States.  President Obama hopes that talks of free-trade with the European Union will promote American and European trade. A key question is whether such an agreement is mainly focused on trade or on developing a political counterbalance to China.