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Countries reach ‘landmark deal’ to cut trade costs 

06 Dec 2021

Members of the World Trade Organisation (WTO) have agreed to a landmark deal which could cut trade costs by £ 113 billion a year. Some 67 members agreed to cut red tape around licensing and qualifications. The signatories, which include the UK, the US, the EU, and China, are a minority of the WTO’s 164 members, but represent 90% of all services trade. Banking, information technology, telecoms, architecture, and engineering are among the service sectors which could benefit most from the deal. UK International Trade Secretary Anne-Marie Trevelyan said the UK stands to gain as it is the world’s second largest services exporter. She said the deal showed “exactly the kind of co-operation we want to see at the WTO and demonstrates it can deliver trade rules fit for the 21st Century”. International policy forum the Organisation for Economic Co-operation and Development (OECD) has estimated that implementing looser regulations in G20 countries – the world’s 20 top economies – could reduce trade costs by up to 6%. The Department for International Trade said the new rules would make it easier for businesses, in particular small and medium-sized firms, to “navigate foreign markets and obtain authorisation to export overseas”. “British businesses consistently cite complex administrative procedures as barriers to accessing international markets,” the Government said. “Once the new rules are in force, businesses can expect licensing applications to be processed in a timely manner, acceptance of electronic copies of qualifications by competent authorities, and an end to unreasonable and hidden fees.” The most significant thing about this agreement may be that it has actually happened. It’s the first negotiated agreement on services at the WTO in a quarter of a century. Therefore, it’s of great symbolic importance. Business groups have warmly welcomed moves to harmonise regulations and make it easier to sell services around the world. But we’ll have to wait and see how much easier it actually becomes. The OECD estimates that implementing looser regulations in G20 countries could cut $ 150 billion (£ 117 billion) every year from the cost of services trade. But the theory has to be put into practice. “WTO agreements may not always make it into the headlines; they may not sound sexy,” admitted the organisation’s Director General Ngozi Okonjo-Iweala. But, she argued, this one shows they can make a real difference. The WTO has struggled to make an impact in recent years when operating by consensus, which means that all member countries have to agree. This agreement – involving 67 countries representing 90% of global services trade – provides a model for “coalitions of the willing” to make progress on other issues, such as e-commerce and environmental concerns, in the future. (BBC)


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