The World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) was recently ratified by Guatemala on March 8, while the latest countries to ratify it was Chad, Jordan, Oman and Rwanda which led to the TFA’s entry into force on Feb. 22. The Philippine government has joined the other 111 member-state of the TFA back in October 2016. The TFA is a landmark global trade agreement which could provide a boost to global trade flows of over $1trillion.
The International Chamber of Commerce, Philippines (ICCP) has welcomed the entry into force of WTO’s TFA. ICCP founding chair Francis Chua said that the organization lauded the Philippine government’s efforts to support this global trade agreement.
“[With] our strong support for this TFA, plus the presence of [Foreign Affairs] Undersecretary Manuel A.J. Teehankee as one of the active proponents of the Philippine government in pushing for this deal, there was no iota of doubt the Philippines would be a proactive supporter of this TFA,” The Philippine Daily Inquirer reported Chua, as saying.
Here are three possible impacts of the TFA ratification to the Philippines:
1. Chua said that the TFA would be beneficial in creating jobs.
ICC has estimated that the deal could support the creation of some 20 million jobs worldwide. The WTO said that majority of these jobs will be created in developing countries.
“ICCP welcomes and conveys its gratitude for the support of Trade Secretary Ramon Lopez, the champion of SMEs, in ensuring that the agreement is carried through,” Chan said. He added that the Department of Trade and Industry (DTI) plays an important role in implementing the provisions of the TFA.
2. The TFA is also crucial for micro, small and medium enterprises (MSMEs).
Chan said that MSMEs are the backbone of the Philippine economy as it comprises 99.6 percent of the registered establishments in the country. ICC chair Sunil Bharti Mittal added that the TFA can boost many small businesses as complex custom requirements would be reduced. “By cutting unnecessary red tape at borders, the TFA will have a transformational effect on the ability of entrepreneurs in developing countries to access global markets,” Mittal said.
3. The TFA can also invite more investors, making the country’s domestic investment activities attract direct foreign investments (FDI).
The WTO stated that the TFA will allow the diversification of export goods, allowing the developing countries to grow its export industry by 14-22 percent. It will also encourage domestic investments and even add more FDI inflows as foreign investors will find it more attractive to invest in countries implementing the TFA.
What do you think of the possible impacts of the TFA Ratification to the Philippines? Let us know in the comments section below.