Although the Trade Facilitation Agreement (TFA) was initially agreed in December 2013, progress has been slow in implementing the deal which ICC estimates could boost global GDP by some US$1 trillion. To date, only three countries – Hong Kong, Singapore and the United States – have formally ratified the TFA.
A need for speed
Speaking at the Customs and Trade Facilitation Symposium ‘Finding Solutions to Cross-Border Challenges’ in Miami, ICC Chairman Terry McGraw, said: “Now we have the agreement in place, we have got to get countries to ratify it. We’re talking about 21 million jobs [that could be created]!”
When you consider that this deal could create as many as 18 million jobs in developing countries alone… there’s as much a moral imperative as a business rationale to get the agreement implemented in quick order.
Mr McGraw called for added urgency in implementing the agreement, citing examples of countries that could give a significant boost to local companies in global markets by implementing simple customs reforms. Recent research has shown that Bolivia could boost its trade flows by some $2 billion adopting around the clock customs processing. It is estimated that electronic customs systems in Cameroon could boost local GDP by as much as $700 million.
John Danilovich, ICC Secretary General, added: “When you consider that this deal could create as many as 18 million jobs in developing countries alone… there’s as much a moral imperative as a business rationale to get the agreement implemented in quick order.”
New opportunities for SME exports
Trade facilitation reforms are assuming greater strategic importance as the internet opens up opportunities for small and microbusiness to trade internationally for the first time. One study showed that 95% of companies on eBay export, compared to 15% in most “offline” economies.
Mr Danilovich noted that these changing dynamics make a clear case for countries to be ambitious when implementing customs reforms – highlighting a new ICC policy statement on de minimis values which calls for shipments of less than $1,000 in value to be excluded from duties and taxes at the border. “This is one part of the TFA where implementation needs to be ambitious to be commercially meaningful,” Mr Danilovich added.
The Symposium – co-hosted by ICC and the United States Council for International Business – continues through to 24 February. Participants include representatives of leading businesses, chambers of commerce and leading international organizations in the field of international trade and customs policy.
Read closing remarks by ICC Secretary General John Danilovich.