Protectionism won out over globalism in several respects in 2016, from the surprising outcome of the U.K.’s Brexit referendum to the shocking election of U.S. President TRADE TRENDS with KEITH HAURIE Donald Trump. Hamstrung by weak demand, global trade is no longer growing. The Trans- Pacific Partnership fell apart entirely, and it is possible that the North American Free Trade Agreement (NAFTA) will be substantially altered. The WTO database indicates that non- technical barriers to trade—through import quotas, subsidies, customs delays, testing requirements, or other means—doubled between 2006 and 2016. Although the world has not yet fallen A step away from the protectionism cliff into isolationism, protectionist measures and the associated rhetoric make it a he World Trade Organization’s latest achievement, the worse place for businesses and consumers alike. multilateral Trade Facilitation Agreement, which was The good news is that the ratification of the TFA is a step away from this cliff. put into effect Feb. 22, is noteworthy in two respects. Two-thirds of the WTO’s 164 members T needed to adopt the agreement before it First, any deal that further liberalizes trade markets that lack a modern infrastructure. could come into force, a threshold that is a positive development for both business The TFA addresses this by mandating that was reached on Feb. 22, when Rwanda, and countries, and the TFA is no exception. wealthy member-countries leverage their Oman, Chad, and Jordan submitted to their Moreover, the agreement shows interest technical expertise and financial resources acceptance to the WTO director-general. in continuing the growth of global trade over the long term to help poorer countries A majority of the world’s economies seem against the backdrop of protectionism that shore up their infrastructure. to be on the same page with respect to the has swept the globe over the past year, Although the lack of a true enforcement rules and regulations that ought to guide most notably in the United Kingdom and mechanism is not ideal, the agreement is trade. That’s progress. the United States. a step in the right direction and is widely While there is a real risk that countries The WTO is positioning the agreement expected to improve the position of poorer may implement it imperfectly, the TFA as a logistical upgrade as well as a stimulus economies, potentially creating new emerg- has positive long-term implications and for trade. It says the TFA will reduce clear- ing markets for the wealthier member- should be seen as an aspirational effort in ance times by 47 percent for imports and 91 countries to leverage in a number of ways. the battle to quell creeping protectionism. percent for exports, and cut costs associated The more interesting conversation, Haurie is vice president of business de- with trade by 14.3 percent. Ultimately, however, is not what the agreement does velopment for ONESOURCE Global Trade the WTO anticipates the agreement will (or does not do) in the immediate term, but at Thomson Reuters. He can be contacted increase imports and exports by $1 trillion rather what it signals. at [email protected]. n per year once fully implemented. According to the WTO, among the main Provisions of the trade facilitation agreement benefits of TFA are increased bilateral trade through reduced barriers, such as high trade • The release of goods before final • Assessment of customs fees costs and long delays in processing trade, determinations on duties, fees, and based on the approximate cost of greater export diversification, enhanced taxes owed are made. the services rendered. foreign investment, and improved national ● • Harmonized processes and competitiveness. • Expedited customs release for certain air cargo and perishable goods. standards for customs clearance. The agreement features a host of new ● ● rules and regulations regarding trade, from • Online publication of import and • Greater border agency and customs expedited customs releases for air cargo export procedures. cooperation. and perishable goods to new harmonized ● ● processes and a new appeals process for • Automated customs processing • Opportunities for importers and customs decisions. It also establishes a including the use of electronic exporters to comment on proposed permanent trade facilitation committee and documents. trade facilitation rules. “will require members to create national ● ● committees to facilitate domestic coordina- • Acceptance of e-payments for duties, • Rights of WTO members to appeal customs administrative decisions. tion and implementation of [its] provisions,” fees, and taxes. ● ● the National Law Review reported. • Creation of a single window for • Provision of technical assistance The agreement is a boon for poorer customs clearance. to lesser developed countries in their member-countries. Generally, it can be rollout of the TFA. difficult for multinationals to maximize the opportunities that exist in emerging Source: National Law Review. 10 AMERICAN SHIPPER: MAY 2017