THE WTO TRADE FACILITATION AGENDA: 2015'S BIGGEST DEVELOPMENT OPPORTUNITY
By Daniel F. Runde, Jeremiah Magpile (Center for Strategic & International Studies)
In November, India and the United States ended a standoff at the World Trade Organization (WTO) over New Delhi’s food security program. For its part, the United States promised to extend a “peace clause” that rules out any challenges to India’s program until members negotiate an update to the rules. As a result, the WTO averted a crisis and can now implement a 2013 Bali Trade Facilitation Agreement that would streamline the transportation, release, and clearance of international goods.
If implemented effectively, the agreement would unlock roughly $1 trillion for both developing and developed countries and create as many as 21 million jobs worldwide. According to the Organization for Economic Cooperation and Development (OECD), implementation could cut as much as 15 percent off the price of goods stemming from red tape and corruption. To add, every 1 percent saved in trade-related transaction costs creates a worldwide benefit of $43 billion, 65 percent of which would accrue to developing countries.