Trade ministers meeting in Bali, Indonesia, on Friday achieved a breakthrough on a multilateral trade agreement covering trade facilitation that was widely hailed by business interests as a major advance in spurring global economic activity.
The WTO said the deal, if enough countries sign up, would provide an annual global benefit of between $400 billion to $1 trillion because it would shave 10 percent to 15 percent from the regulatory cost of importing and exporting, and could stimulate more trade and allow countries to collect more revenue at the border.
Ministers also agreed on an interim way for calculating how governments purchase food from farmers at supported prices to build up reserve stocks without distorting trade at market prices, extended an e-commerce agreement not to charge import duties on electronic transmissions, and simplified rules of origin for least developed countries.
Yemen also was accepted as a new member of the WTO.
The Bali Package of negotiating items is a trimmed-down version of what was achievable from the stalled Doha Round of comprehensive trade talks that have faltered for a decade over disagreements about agriculture and other issues.
But the biggest achievement was the agreement on universal trade facilitation rules designed to simplify cross-border transactions, increase transparency, and reduce delays and costs by speeding up customs procedures, eliminating red tape, cracking down on corruption, and employing information technology to minimize the exchange of paper freight documentation. It includes provisions on goods in transit, including through landlocked countries, and capacity-building for customs infrastructure, training, and other implementation costs for less-developed countries.
Key provisions include:
- Creating an expedited process for the release of air cargo
- Releasing expedited goods as rapidly as possible after arrival
- Separating the release of the goods from the final resolution of the financial aspects of the transaction
- Requiring each country to set a de minimis value, below which duties and tariffs are not required, which will expedite the release of low-value shipments
- Adopting a risk-management approach to the application of custom controls
- Pre-arrival processing of required information, by electronic means
- Providing advance rulings on tariffs and other customs measures that will be applied to a shipment
- Creating a single window for submission of shipment information to all relevant government agencies
- Establishing a trusted trader program for authorized operators with a history of highly compliant, secure supply chains, who will receive additional facilitation benefits
The WTO will formalize the articles of the agreement, and countries will be able to file documents indicating their acceptance. Once two-thirds of the members file their acceptance, the trade facilitation agreement will enter into force and will be subject to the WTO's binding dispute resolution mechanisms.
A trade facilitation agreement would join existing WTO trade agreements on financial services and telecommunications, and free trade in information technology products for a portion of WTO members that concluded a deal on their own.
"This deal is good news for the global trading system. The Bali package is significant, particularly given the promise of trade facilitation to improve access to the global marketplace for small businesses, create jobs, and spur more inclusive growth in the United States and around the world," the National Foreign Trade Council said in a statement. Its vice president for global trade issues, Jake Colvin, attended the Bali ministerial.
The Business Roundtable, Express Association of America (representing UPS, FedEx, DHL and TNT) and the U.S. Council for International Business also applauded the deal.