The first multilateral deal agreed at the World Trade Organization came into force on Wednesday, a step billed as a milestone for the body facing unprecedented threats from a hostile US administration.
The Trade Facilitation Agreement (TFA) has now been ratified by 112 of the WTO’s 164 members, crossing the two-thirds threshold needed for activation, the Geneva-based organization confirmed.
Under the deal, nations agreed to simplify and standardize customs procedures at borders to make it easier for goods to flow around the world.
WTO chief Roberto Azevedo said that TFA was estimated to trim global trade costs by more than 14 percent and could boost global growth by half a percentage point per year.
“The trade facilitation agreement in the biggest reform of global trade this century,” Azevedo told journalists after Chad, Jordan, Oman and Rwanda submitted the clinching ratifications.
Poorer countries are expected to reap the most benefits from the TFA through provisions that will improve access to richer markets for their products.
The WTO has suffered high-profile setbacks in trying to craft major deals, notably in the stalled Doha Round process, which is striving to re-write global trading rules.
When negotiations on the TFA were successfully concluded in 2013 it marked a major victory for the WTO.
Azevedo claimed on Wednesday that the relatively swift ratification process proved the deal was “a win-win for everyone.”
But more trouble almost certainly lies ahead following Donald Trump’s US election win.
The leader of the world’s top economy called the WTO a “disaster” during the campaign and threatened to pull the US out.
The protectionist agenda he hyped during the campaign has persisted since his inauguration, including through the nomination of Robert Lighthizer as US trade representative.
Lighthizer has said Washington could ignore WTO rules in order to redress what he considers trade imbalances, notably ones he claims favor China.
Azevedo, a Brazilian diplomat, has in public remarks sought to downplay the possible threat of rising US protectionism.
“I am quite confident that the WTO offers tools to address many of the concerns expressed recently,” he said on Wednesday in response to a question about Trump.
He added that he was “yet to have any kind of conversation with the new administration.”