Despite a number of challenges, the U.S. business community continues to regard the global rules-based trading system embodied by the WTO as indispensable. Eight successful multilateral negotiating rounds have helped increase world trade from $58 billion in 1948 to well above $20 trillion today. This 40-fold increase in real terms has brought a rising tide of commerce to nearly the entire world—perhaps especially the United States.
In recent years, the long impasse in the Doha Development Agenda negotiations led many to call into question the WTO’s role as a forum for market-opening trade negotiations. In this context, it is difficult to exaggerate the importance of recent successes achieved by the WTO.
The first of these wins is the Trade Facilitation Agreement (TFA). Its entry into force in early 2017 made it the first multilateral trade agreement reached since the WTO’s founding. The TFA is a cost-cutting, competition-enhancing, anti-corruption agreement of the first order. As WTO members implement it, it is streamlining the passage of goods across borders by cutting red tape and bureaucracy and establishing common approaches to the mundane but important task of clearing goods through customs.
Implementation of the TFA has the potential to increase global merchandise exports by up to $1 trillion annually, according to the WTO’s World Trade Report 2015. This was the first detailed study of the potential impacts of the TFA based on a full analysis of the final agreement text. It also found that developing countries will capture more than half of the TFA’s available gains.
Speaking for American companies trading and investing around the globe, the U.S. Chamber’s message has been that implementing the TFA is an excellent opportunity for developing countries. Implementation is a way for a country to signal to the global business community and donor agencies that it is open for business and ready to receive foreign direct investment.
Another recent success of the WTO is the expansion of product coverage of the 1996 Information Technology Agreement (ITA), which has delivered a cornucopia of innovative technology products to the world. The deal reached in December 2015 to eliminate tariffs on hundreds of new tech products invented since the ITA was first negotiated will multiply its benefits. (83 WTO members belong to the original ITA, and 54 are members of the supplemental, expanded pact.)
The new products added range from high-tech healthcare devices to advanced semiconductors to software media. Implementation of the expansion began on July 1, 2016, and it will be largely in place by 2019.
All told, approximately $1.3 trillion worth of tech goods will be traded duty-free under the ITA expansion, a sum greater than global trade in automobiles and three times greater than trade in clothing, according to the WTO. By one estimate, this expansion of the ITA could add an estimated $190 billion to global GDP annually.
In addition, the United States must ensure that WTO accession agreements are monitored, and new participants, such as Russia, meet their obligations in law and spirit.
In short, the WTO has beaten expectations to deliver commercially significant benefits in recent years. The U.S. business community is committed to working to ensure that the organization continues to deliver measures to boost growth worldwide.