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WTO highlights progress in combating trade-restrictive measures

Legislation | | MIC Customs Solutions |

New WTO data has shown that the rate of new trade-restrictive measures put in place reached the lowest monthly average since the financial crisis between mid-October 2016 and mid-May 2017.


Although the global consensus on free trade has suffered some major setbacks over the last few years, businesses continue to see overall progress made on the liberalization of trade boundaries, with numerous high-profile bodies and organizations remaining as committed as ever to promote tariff-free trade as an economic ideal.

Chief among them is the World Trade Organization (WTO), which recently published a report suggesting that global efforts to tackle the spread of trade-restrictive measures have achieved considerable success in the last few months, making it easier for companies to sell their goods across borders.

Although there remains room for improvement on this front, the WTO data will provide encouragement that ongoing economic uncertainty and a recent resurgence of protectionism is not causing long-term damage to the globalization agenda.

Successful efforts

According to the report, only 74 new trade-restrictive measures were initiated by WTO members during the period running from mid-October 2016 to mid-May 2017. Although an average of almost 11 new measures of this kind - including new or increased tariffs, customs regulations and quantitative restrictions - were introduced each month, this constitutes a significant decrease over the previous review period of October 2015 to October 2016, when an average of 15 measures per month was recorded.

This marks the lowest monthly average seen over the past decade, meaning this was the WTO's best performance on this measure since the financial crisis of 2008. The implementation of the WTO Trade Facilitation Agreement - which entered into force in February 2017 - was cited as a major contributor, as full implementation of this deal is expected to reduce members' trade costs by an average of 14.3 per cent.

Room for improvement

However, the report also showed that during the same period, WTO members applied only 80 new measures aimed at facilitating trade by eliminating or reducing tariffs and simplifying customs procedures, which represented the second-lowest monthly average since the trade monitoring exercise began in 2008.

Although it was noted that the $183 billion (€156 billion) trade coverage of import-facilitating measures was more than three times the coverage of the import-restrictive measures - and more than six times higher than for trade remedy initiations - the WTO was keen to stress that further efforts are needed to make sure the global trading environment becomes freer and more open.

This is important, as global trade growth was limited to only 1.6 per cent in 2016 - the lowest rate of improvement since the global recession. Although WTO forecasts suggest that trade growth will strengthen in 2017 to around 2.4 per cent, this is contingent on governments pursuing an appropriate mix of trade policies, as a failure to do so could drive this figure down as low as 1.8 per cent.

Pursuing further progress

Nevertheless, the overall picture painted of the period by the WTO was a positive one, with the 2015 expansion of its Information Technology Agreement also noted as a key contributor to the current trade facilitation trends.

In order to maintain this momentum, the organization is calling upon member states to maintain their commitment to transparency and predictability in trade policy decisions, including an ongoing commitment to the rollout of the Trade Facilitation Agreement and cooperation to achieve a successful outcome at the 11th WTO Ministerial Conference in December.

Members were also called upon to pledge renewed commitment to their belief in open and mutually beneficial trade as a key driver of economic growth and a major engine for prosperity, and to acknowledge that the removal of barriers to trade is necessary to address instability in the global markets in the long term.

WTO director-general Roberto Azevedo said: "The report shows an encouraging decrease in the rate of new trade-restrictive measures put in place - hitting the lowest monthly average since the financial crisis.

"The larger trade coverage of import-facilitating measures during the review period is also a very positive development and a clear sign that WTO members are working to improve the global trading environment. I urge WTO members to continue showing moderation and restraint in their use of trade restrictions, despite the persistent uncertainty facing the global economy."


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Multinational companies are facing greater compliance challenges when addressing the continuously evolving international legal requirements. Customs and trade compliance management has a significant impact on production location and purchasing decisions, delivery times, cost savings and competitive advantages. Thus, it is crucial to establish processes that are accurately, effectively, and efficiently managed utilizing proven global IT solutions.

The international requirements for companies regarding customs and trade compliance management are complex and subject to ongoing legal changes covering a multitude of topics, such as: Correct product classification, compliance with export control regulations, numerous sanction list screenings, calculation of origin based on ratified free trade agreements, supply chain security initiatives, and management of special customs regimes as part of the import and export clearance processes. In addition, country-specific legal requirements that include legislative and technical changes make it increasingly difficult to completely fulfill the requirements of international customs and trade compliance.

A partnership with MIC strengthens a company’s ability to deal with the daily operational challenges of international customs and trade compliance management. MIC has a trendsetting Global Trade Management (GTM) software solution that allows companies to standardize and automate their customs and trade compliance processes. MIC’s software solution is available on 6 continents and can be configured according to the company’s specific needs to significantly improve legal compliance, thus saving time, money, and eliminating future business disruptions.

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MIC Global Trade Management (GTM) software helps companies maintain international visibility and to take advantage of these program changes in legislation. We know the intricacies of national and regional customs and export control requirements. Our software takes account of the respective regulations and uses similarities in global customs and export control law. This is done in 55+ countries on 6 continents with regularly updated trade content for 150+ countries. In addition, our data analytics & visualization tool enables improved decision making by identifying optimization potentials and supply chain trends across global customs and trade compliance processes. As a result, global business processes can be designed and automated more efficiently. This not only increases compliance, but also saves time, money and increases global competitiveness.

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