The World Trade Organisation provides rules for trade between nations (and blocs) where no bilateral trade agreement has been established. Bilateral (and multilateral) trade deals are designed to facilitate trade between the partners, eliminating (to some extent) red tape and barriers to trade.
The WTO is enjoying the fact that an international accord which it has fostered enters into force today and could boost global trade by up to $1 trillion according to estimates. WTO chief, Roberto Azevedo hailed the accord as “the biggest reform of global trade in a generation”. Known as the Trade Facilitation Agreement (FTA), it aims to streamline customs procedures between trading partners. In Azevedo’s opinion, FTA will have a bigger impact than eliminating tariffs on goods.
Participating nations must agree to reforms including improved access for businesses to information, more straightforward and faster procedures and cuts to transnational fees. These moves should reduce the cost of trading by 14.3% according to WTO staff.
As an indication of the complexity of international trade, FTA stands as one of the few tangible successes of the “Doha Round” of trade negotiations that started back in 2001 (Theresa May, take note). Whilst the agreement was achieved in a meeting in Bali in 2013, it required ratification by 110 states before it could come into force.
The future of trade liberalisation has been put in doubt by events such as Brexit and the election of an avowedly protectionist American President in the shape of Donald Trump. Trump has killed of any prospect of TTIP becoming a reality whilst he is in the White House; he has pulled out of a Pacific Trade deal and is suggesting that NAFTA may need to be renegotiated. It is too early in his Presidency to say with any certainty how deep America’s new protectionist roots grow and how resilient the plant will be to international criticism in a multi-national, global economy that was, until very recently, driven by the US.