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Good news is coming for small and medium-size businesses that want to reach billions of customers around the world. The World Trade Organization (WTO) is set to ratify a groundbreaking, but little talked about, new agreement known as the Trade Facilitation Agreement (TFA). This agreement will cut red tape and simplify the movement of goods across borders for the 164 countries that are WTO members.
The TFA will be a victory for American businesses of all sizes, particularly for small and medium-size businesses that are the backbone of our economy. These job creators employ more than 50% of private sector employees and represent one-third of U.S. merchandise export revenue. Yet their trade potential—and, in turn, their growth potential—has been limited for too long by a complex maze of bureaucratic and international border procedures.
Jason Wilson, owner of the small business Back Forty Beer Company in Gadsden, Alabama, has encountered such obstacles. He started exporting his beer to Asia but was taken aback by the hurdles he had to clear just to do business in many countries.
“It may sound easy,” he told us. “You have a solid product and a great new market to sell it in, but the challenges are immense. Every country has different paperwork, regulations, and procedures that are often redundant. Learning how to move your product through the global supply chain and get it on store shelves is a tremendous challenge.”
The TFA will be a welcome relief for Mr. Wilson and millions of business owners like him. It will help them lower costs, boost sales, and grow their businesses by breaking down unnecessary barriers and simplifying trade requirements. The TFA can be a significant driver of growth in America as well as around the world. The WTO estimates that it could reduce trade costs by an average of 14.3%, bolster world trade by $1 trillion, and help create more than 20 million jobs worldwide.
While the TFA will be a huge victory in the effort to remove trade barriers for U.S. companies, the hard work of implementation lies ahead. The agreement can only improve trade efficiency globally if each country commits to fully executing its measures. For as long as it takes, the U.S. Chamber of Commerce will continue to push for successful TFA implementation so that American businesses can sell to more customers and drive stronger growth for our economy.