The WTO 9th Ministerial in Bali concluded on December 6th, 2013 with the first-ever global Agreement on Trade Facilitation. This Agreement introduces new trade rules to streamline customs and port procedures for the world’s traders. Other key decisions implemented prior commitments to improve market access for the world’s least developed countries and on Yemen’s entry as the WTO’s 160thmember.

Agreement on Trade Facilitation:

The new trade rules that the Agreement introduces are aimed at streamlining customs and port procedures. WTO Members have committed to implement new rules of trade that will bring streamlined and more transparent customs rules and procedures for traders.

Increased Transparency for Traders

  • Make publicly-available such information as:
  1. import/export procedures
  2. duty rates and taxes
  3. customs fees and charges
  4. penalties and appeal procedures
  • Establish inquiry points to address questions by governments and traders
  • Provide an opportunity to review and comment before rules enter into force
  • Provide advance rulings on issues raised by traders

Streamlined Procedures to Reduce Times & Costs

  • Post-clearance audits
  • E-payments of fees
  • Risk management to reduce physical inspection of entering cargo
  • Expedited release of air shipments
  • Improved procedures for perishable goods

These new trade rules will introduce practices that traders in advanced economies can already take for granted. They will require reforms and updates by many developing countries. The deal includes assistance to address the costs of these reforms. The WTO estimates that the world economy will benefit from implementation of this Agreement to the tune of US $ 400 billion and US $1 trillion by reducing costs of trade by between 10% and 15% while increasing trade flows and revenue collection. Small traders, in particular, are expected to benefit from the use of streamlined procedures and the increased transparency through reduced costs and waiting times for their goods at borders. The reforms are also expected to create a stable business environment, in turn attracting foreign investment into the countries.

Improved Market Access for LDCs

  • Decision on duty-free, quota-free access for products of least developed countries: The Bali agreement commits members, including developing country non-LDCs, to seek to implement this decision with respect to at least 97% of products.
  • Decision to simplify preferential rules of origin for least developed countries that will be essential to the process by which LDC products can be identified as originating in an LDC and so qualify for the DFQF entry into importing countries.
  • Decision to start process that will operationalize the “services waiver” that will grant least developed countries preferential access to other countries’ services markets.

Implementation of the above “Development Decisions” will improve the terms on which LDC products and services access world markets whether or not they join the WTO.

Yemen Joins the WTO

Nevertheless, in Bali Yemen was welcomed into the WTO as it’s 35th LDC member. This process took thirteen years from the submission of Yemen’s application to join the organization. Yemen expects to benefit from the more open market that is created by implementing WTO rules, thereby making it more attractive to foreign investors.

Other Decisions

In the area of E-Commerce members agreed not to charge import duties on electronic transmissions.

In the area of Intellectual Property members agreed not to bring cases to the WTO dispute settlement process that involve a loss on an expected benefit under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement if the agreement itself has not been violated.

Small agreements on Agriculture and Cotton were arrived at as a subset of larger issues have been hot topics issues since the Doha Round negotiations were launched in 2001.

Implementing New Trade Rules

The next major step will be for countries to take the necessary steps to implement the Agreement on Trade Facilitation, which requires ratification by about 106 of its 160 members for it to take effect for those members. Countries that do not ratify will not be bound by the Agreement. However, many developing countries, the ones most in need of these reforms, have already begun to introduce many of these reforms and will likely be encouraged by the opportunity to receive funding and technical assistance to continue these reforms.

More information on the Bali Ministerial is available here.