WTO Should Implement Trade Facilitation Agreement

Friday, Aug 08, 2014, 12:00pm

by Semiconductor Industry Association

Last week, members of the World Trade Organization (WTO) missed an important deadline to implement the Trade Facilitation Agreement (TFA) due to objections from India, South Africa and a few other developing countries.

This is a disappointing setback for global trade and the global economy. The TFA has the potential to lower trade costs by expediting import, export and in-country transit; remove bureaucratic red tape and corruption; make border processes more efficient and transparent; and focus on technological advances to achieve such objectives. In assessing the agreement, the WTO has noted that “the benefits to the world economy are calculated to be between $400 billion and $1 trillion by reducing costs of trade by between 10% and 15%, increasing trade flows and revenue collection, creating a stable business environment and attracting foreign investment.”

Because semiconductors are traded globally, approval of the TFA would benefit SIA members and the rest of the global industry. For this reason, the 2014 World Semiconductor Council (WSC) Joint Statement – jointly released by the semiconductor industry associations in China, Chinese Taipei, EU, Japan, Korea, and the U.S. – called for the swift ratification and implementation of the TFA, noting the benefits the agreement would bring to governments, industry, and consumers in both developing and developed countries alike. The TFA embodies many of the elements outlined in the WSC Trade Facilitation Principles, released by the WSC last year.

SIA sincerely hopes that negotiators will be able to quickly implement this important agreement, so all industries and economies can reap the benefits of reducing barriers to trade, lowering costs, improving business conditions, enhancing IT, and promoting global alignment.