WTO Trade Facilitation Agreement Enters into Force

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February 22, 2017
By: David G. Forgue

Contributing Author:  Jacob M. Lehmann

On February 22, 2017, the Trade Facilitation Agreement (TFA) concluded by WTO membership at the 2013 Bali Ministerial Conference entered into force after Rwanda, Chad, Oman, and Jordan ratified the agreement. This agreement, which partially amends the 1994 Marrakesh Declaration, promises to reduce international transit costs for goods by further harmonizing international customs operations and facilitating greater transparency of dispute settlement and compliance regulations.

Many member countries, including China and Mexico, have committed to immediately implement TFA provisions immediately after their effective date; the United States, Canada, the European Union, and Japan have not made such a commitment. However, the TFA provides flexible implementation schedules for least-developed countries (LDC), as well as for various forms of assistance to their customs officials as they update their infrastructures.

According to a WTO economic study, the agreement could reduce international trade costs significantly. On average, WTO members stand to save, on average, approximately 14 percent, with developing countries poised to benefit more than developed nations. Moreover, shipment times are likely to reduce by roughly a day and a half for exports, approximately two days for imported goods.