Worldwide trade costs could be cut by up 17.4 per cent if countries implement the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA), according to the OECD.
The OECD said the trade facilitation measures of simplifying trade documents and streamlining border processes had the biggest impact on costs. The organisation added its “trade facilitation indicators” (TFI), which assess the potential impact of the TFA across 152 countries, showed potential cost reduction varied depending on a country’s level of development, from 11.8 per cent for OECD countries to 17.4 per cent for “lower-middle income” nations.
The TFA will enter into force once two-thirds of WTO members have completed the domestic ratification processes. So far seven nations, Hong Kong, Singapore, the US, Mauritius, Malaysia, Japan and Australia have ratified the deal.
“The case for fully implementing the Trade Facilitation Agreement is compelling – for producers of goods and services, full implementation will lift export performance and lower the costs of imports,” said the OECD.
Following a summit in Germany, G7 leaders have committed to “making every effort” to complete these processes by December 2015.