The WTO on 29 November announced that Dominica (99th) and Mongolia (100th) had ratified the TFA, which means that just 10 more ratifications from members are needed to bring the TFA into force. The final countdown begins for realising a global deal that could boost global merchandise exports by up to $1 trillion per annum by slashing trade costs and cutting red tape at the border.
One immediate impact once it enters into force is that all developed country members of the WTO will start applying all of the substantive provisions of the agreement from the date it takes effect. Developing countries and least developed countries (LDCs) will also begin applying those substantive provisions of the TFA they have indicated they are in a position to apply from the date of entry into force; these commitments are set out in the Category A notifications which 90 members have submitted to date.
According to a 2015 study carried out by WTO economists, full implementation of the TFA will reduce members’ trade costs by an average of 14.3%, with developing countries having the most to gain. The TFA also has the ability to reduce the time to import goods by over a day and a half while also reducing time to export by almost two days, representing a reduction of 47% and 91% respectively over the current average.
Concluded at the WTO’s 2013 Bali Ministerial Conference, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area.
Besides benefiting existing traders, implementing the TFA is expected to help new firms export for the first time. Moreover, 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%, according to the WTO study.
In addition to Dominica and Mongolia, the following WTO members have accepted the TFA: Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Bahrain, Bangladesh, the Philippines, Iceland, Chile and Swaziland.
South Africa and Namibia are the only Southern African Customs Union (Sacu) members that have not yet ratified the TFA and it is unlikely that South Africa will ratify anytime soon.