New deal could cut trade red tape

The global airfreight industry has welcomed a new international deal saying that it could, if fully implemented, cut costs and delays in international trade. However, some question whether it will be fully realised, given the rise in protectionist sentiment in many countries.
The International Air Transport Association (IATA) applauded the World Trade Organisation (WTO)’s Trade Facilitation Agreement (TFA), which came into force on 22 February. It was ratified by Rwanda, Oman, Chad and Jordan, which meant that the requisite two-thirds of its members have now ratified it.
IATA director general and chief executive, Alexandre de Juniac, described the move to cut red tape at borders as “great news for airlines, which deliver about a third of the goods traded across borders by value” and predicted that it would make for faster, cheaper and easier trade.
But he added that it was also “a particularly timely reminder of the dangers of the current protectionist rhetoric that we are seeing in various parts of the world,” a possible reference to the ‘America first’ rhetoric of new US President Donald Trump and the recent referendum vote by the UK to leave the European Union.
Described by WTO director-general Roberto Azevêdo as the biggest reform of global trade in a generation, TFA aims to speed up movement, release and clearance of goods across borders and, according to WTO could when fully implemented reduce costs of international transactions by an average of 14.3%. The savings would be even higher in developing countries, it adds.
The measures outlined in the agreement would also cut the time needed to import goods by over a day and a half and to export goods by almost two days, a saving of 47% and 91% respectively over current times. They include measures to improve transparency and predictability of cross-border trading, improving the availability of information about procedures, reduced fees and formalities for the import/export of goods, faster clearance and enhanced conditions for transit goods.
TFA is also expected to help firms start exporting for the first time and diversify the range of products exported by developing countries. Developing and least-developed countries will be allowed to implement TFA measures at their own pace.
UPS also welcomed the TFA. Chairman and chief executive, David Abney,  said it would usher in a new customs framework, “making businesses more competitive and facilitating their growth through exports. By creating smarter rules that simplify how goods cross borders, this agreement will streamline the flow of commerce to meet the demands of the 21st Century economy.”
Abney welcomed harmonised rules that will apply to more than 90% of the world’s consumers. “TFA sets new standards, including digital processing of shipment data and more effective security clearance processes that will facilitate more exports across borders,” he argued.
While also welcoming TFA, the director general of the UK’s British International Freight Association, Robert Keen, warned: “Of late, some nations have made it clear that they intend to scale down multi country free trade deals and switch to bilateral relationships, marking a return to the bad old days of protectionism.”

Share this story

Related Topics

Latest customs news

Kerry and Menzies partner on customs clearance at Macau

Kerry Logistics is partnering with Menzies Aviation and Menzies Macau Airport Services to enhance customs clearance for e-commerce at Macau…

Read More

Share this story

Forwarders and shippers call for more data ahead of new import regime

International forwarders’ federation FIATA and the Global Shippers Forum (GSF) have called for better data quality and information exchange ahead…

Read More

Share this story

Lufthansa customs arm tops 50m clearances

Lufthansa Cargo’s CB Customs Broker subsidiary has carried out 50m clearances in its three-year existence. The broker carries out import…

Read More

Share this story

Air Cargo News

Air Cargo News
Established in 1983, Air Cargo News is the leading source of news, information, interviews, analyses and reports to the global airfreight industry. Our leading portfolio includes print, digital and events that give businesses in the airfreight industry the ability to connect with decision-makers in this sector.