St. Vincent & the Grenadines ratifies WTO Trade Facilitation Agreement; Four more ratifications to go
On January 9, 2017, the Caribbean island nation of St. Vincent & the Grenadines became the 106th country to ratify the World Trade Organisation’s Trade Facilitation Agreement (TFA). Only four more ratifications are needed in order to bring the Agreement into force (two-thirds of the WTO membership, i.e. 110 members).
The first multilateral trade agreement to be agreed since the establishment of the WTO in 1994, the Trade Facilitation Agreement was concluded at the Bali Ministerial in 2013. It aims, in a nutshell, to speed up the process of the movement of goods across national borders.
As the World Bank’s Annual Doing Business Reports show, countries’ customs procedures can vary from a few to a multiplicity of steps, which can significantly increase the amount of time goods take to clear borders, which increases costs to both suppliers and consumers. As supply chains become increasingly globalised, so is the need for more expeditious trade flows and standardisation of customs procedures. The Trade Facilitation Agreement’s provisions provide standards which were inspired by international best practices.
Developing countries and Least Developed Countries (LDCs) have the option to determine their pace of implementation by designating each of the provisions according to one of three categories: A,B,C, with A being the commitments each country can undertake as soon as the Agreement comes into force. The Agreement also includes provisions on customs cooperation. A Trade Facilitation Facility was also created at the request of developing countries to assist them and Least Developed Countries in implementing the Agreement.
WTO economists in the World Trade Report 2015 estimated that the Agreement would lower members’ trade costs by an estimated 14.3% on average. So far besides St. Vincent & the Grenadines, the following CARICOM countries have ratified the TFA: Trinidad & Tobago, Belize, Guyana, Grenada, Jamaica, St. Kitts & Nevis, St. Lucia and Dominica.
Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.