Weekly Trade Spotlight: The Benefits of the WTO Trade Facilitation Agreement to Small Business
“This new deal, and particularly the new trade facilitation agreement, will eliminate red tape and bureaucratic delay for goods shipped around the globe. Small businesses will be among the biggest winners, since they encounter the greatest difficulties in navigating the current system. By some estimates, the global economic value of the new WTO deal could be worth hundreds of billions of dollars.” – President Barack Obama
On December 6th, the World Trade Organization marked the first successful conclusion of multilateral trade negotiations in its nearly two-decade history. The resulting Trade Facilitation Agreement will have great benefits to many different sectors, one important area being small business exports. As small businesses play an increasingly vital role in the U.S. and global economy, the Trade Facilitation Agreement will help make it easier for U.S. small businesses to navigate customs procedures and sell their exports to customers around the world.
Under the new Trade Facilitation Agreement, small businesses will have new opportunities to benefit from international trade. The new agreement will provide increased transparency and access to customs documents, regulations and procedures, and will publicize other information required for small businesses to engage in trade. By providing this information in a comprehensive online publication, small business exporters will have a “how to” guide for trading with the WTO’s 160 member countries, right at their fingertips.
Among the many new obligations that WTO Members will undertake to reform customs practices and increase efficiency of goods crossing borders, another benefit small businesses will receive is access to expedited shipping channels. This is particularly important to small businesses that are developing their logistics capacities. By providing access to shipping channels and express carriers, small businesses around the world will have better access to global supply chains and can export their goods in a more cost-efficient and timely manner. Also, the reduction of documentary requirements, processing of documents before goods arrive, use of electronic payments, and quick release of perishable goods are measures in the agreement which can further reduce costs for small business exporters.
The success of small businesses plays an important role in the growth of the global economy. According to the World Bank and World Economic Reform, bringing countries even halfway to ‘best practices’ in trade facilitation would add 4.7% to world GDP, with much of the growth supported by small businesses. Expedited customs procedures and improving technological and shipping capabilities of small businesses, are key ways to “eliminate the red tape” and help small business engage in international trade and access its many job-creating benefits.