Bali Ministerial 2013

Having reaffirmed its strong support for the multilateral trading system entrusted to the WTO, ICC underscored the urgency of producing a meaningful result at the 9th World Trade Organization (WTO) Ministerial Conference as essential to sustaining the centrality of the multilateral trading system and strengthening the WTO.

Bali Ministerial 2013

As a leading voice of international business on issues that are of the utmost importance to liberalizing trade, increasing global investment and generating a sustainable global economic recovery, ICC made every effort to convince governments to reach an agreement on trade facilitation at the 9th WTO Ministerial Conference, 3-6 December in Bali.

On behalf of its global network reaching 6.5 million companies worldwide, ICC had been steadfast in its campaign to push for the conclusion of a trade facilitation agreement that according to a recent ICC commissioned report could create more than US$1 trillion in world export gains.

The WTO trade facilitation agreement that was successfully made in Bali on 7 December is the most effective way to simplify policies and administrative procedures that determine how goods cross borders or are handled by customs. In short, it cuts red tape that diverts precious resources, slows down supply chains and increases the cost of goods by an estimated 5% to 15%.

The deal will encourage cross-border trade and investment, economic growth and job creation worldwide, for all countries at all levels of economic development, and will be of particular benefit to developing countries and small- and medium-sized enterprises in these countries. Bilateral and regional trade agreements normally include trade facilitation provisions. However, they do not provide consistency across the whole world. Only a multilateral deal can do this.

ICC led an international business delegation to the World Trade Organization's 9th Ministerial Conference in Bali. Through ICC's World Trade Agenda initiative, the ICC global network rallied to help secure agreements including the deal on trade facilitation which, according to an ICC-commissioned study, could inject up to $US 1 trillion into the global economy and create 21 million new jobs.

Payoff from the World Trade Agenda 2013

For the first time in the World Trade Organization's (WTO) nineteen-year history, all 159 members managed to reach an agreement on 6 December 2013 at the 9th WTO Ministerial in Bali, Indonesia. To read ICC's full report on the potential payoffs from the Bali deal, and the ICC World Trade Agenda, please click on the document below.

What does the Bali deal mean for business?

The Agreement on Trade Facilitation, which was adopted at the WTO's 9th Ministerial Conference in Bali, Indonesia, in December 2013 is the first major agreement to have been reached since the creation of the WTO almost 20 years ago.

The Agreement aims at simplifying not only the documentation required to clear goods, but also the procedures employed by border agencies. Focusing on the biggest risks allows border agencies to speed up the flow of goods across the border, and increases the collection of duties. It has been described as a classic 'win-win' subject for developing and developed countries, since there should be no losers.

Benefits of this deal are far-reaching for business. The deal could potentially halve the average cost of shipping merchandise across borders from 10% of the goods value to just 5% and boost trade by enough to create 21 million jobs, of which 18 million will be in developing countries. Experts also estimate a boost of $1 trillion dollars annually for the global economy.

What are the potential long-term benefits from the World Trade Agenda?

Payoff from the World Trade Agenda statistics

What are the practical implications of the agreement on trade facilitation?

Trade facilitation is important to business because it can have a major impact on bringing down trade transaction costs. Goods delayed at the border for days (or even weeks) slow trade flows and add costs to business that are often passed on to consumers.

The agreement has the potential to be of particular benefit to traders in developing countries, who continually face lengthy and costly border delays. Depending on the country's implementation of the trade facilitation agreement, the removal of these barriers to trade could reduce total trade costs by 10% in advanced economies and by 13-15% in developing economies.

The trade facilitation agreement will, therefore, have a real impact on the global economy in terms of jobs and opportunity. Cutting red tape at borders and in customs will speed up supply chains and make it easier for smaller companies and developing countries to integrate into international trade. The deal will also boost the ability of developing economies to provide food security to their poorest citizens.

The International Trade Centre (ITC) has produced a Business Guide on what this agreement will mean in terms of practical implications and how business can work in partnership with governments to best implement the obligations and specific commitments undertaken in the Agreement on Trade Facilitation. A copy of the guide can be accessed here.