WTO pact cannot come soon enough

World Trade Organization accord ratified by China needs approval of 92 others to come into force

China notified the World Trade Organization in September that it had ratified the Trade Facilitation Agreement, making it the 16th country to do so. The agreement needs to be ratified by two-thirds of the WTO's 161 members to take effect.

It is the first multilateral trade agreement since the WTO was established 21 years ago, and negotiations have had many setbacks. Negotiations began 11 years ago, but it was not until a little more than five years later that the first draft of the agreement was formulated. In December 2013, the WTO ministerial meeting signed the Bali Trade Agreement, which covered issues such as trade facilitation, agriculture and development.

However, in July last year implementation of the Bali agreement struck a roadblock because India declared it would not fulfill the commitments on schedule. At the end of the year, the WTO general council adopted the TFA into the WTO rules system. Moreover, it offered to comprise and push back the implementation deadline for India, keeping the TFA alive.

As a big developing country, China has made great contributions to the Doha Development Round. On June 30 last year, China made public its implementation plan for the TFA and said that as long as the treaty was ratified it would implement many measures, such as strengthening collaboration on customs services and adopting a measure called the single-window rule.

Joining the TFA is important for China because it changes the way ports are run, reduces trade costs, improves business competitiveness and promotes cross-border e-commerce.

Since China joined the WTO in 2001, overall tariff levels have fallen from 15.3 percent to 9.8 percent. Promoting trade and reducing tariffs are the main measures China has adopted as it tries to liberalize the trade in goods.

Joining the TFA will help China give a fresh injection to economic reform and accelerate the modernization of the country's ports, improve management and supervision, and establish a highly efficient system of trading goods.

China's program of trade facilitation includes measures such as simplified procedures, more transparency, unified standards, streamlined regulations and reduced restrictions that will reduce the costs of international trade. All these will also improve the free flow of goods and services.

Since the global financial crisis, China's trade facilitation has made great strides. Two years ago the country adopted measures to accelerate customs clearance, including paperless processing. In July 2013 it was decided to implement a program of "one clearance, one checkout, one pass", and it is gradually being introduced in ports throughout China.

In April this year, after the finishing touches had been put to so-called pilot areas, and they had been successfully tested, it was decided to widely promote the measures used to improve trade facilities and financial services and to accelerate tax refund procedures, and modify other measures relating to such refunds.

Reform measures and policy adjustments will play an important role in stabilizing the growth in China's external trade and its economy, at the same time promoting job growth and laying the foundations for China to implement the TFA.

Free trade zones have become an important test bed for trade facilitation. The Shanghai free trade zone became the first to simplify import and export customs clearance procedures, to allow enterprises to first enter the zone and then gain customs clearance. The Shanghai zone has also adopted many innovative measures that will serve as a model for the rest of the country.

Free trade agreements, too, whether bilateral or regional, have become an important tool in promoting trade facilitation. In 2009, China and ASEAN customs authorities decided to work more closely together in areas such as law enforcement and exchanging information.

Free trade agreements that China has recently signed with South Korea and Australia have included specific measures on trade facilitation that would guarantee that before goods are landed, documentation can be submitted electronically. This would result in quicker customs clearance. The agreements also call for greater efforts to promote paperless trade, for customs authorities to work more closely together and for regulatory transparency.

Joining the TFA is important as China pushes for freer trade. The sooner the agreement is ratified and comes into force, the sooner global trade and the world economy as a whole will receive an important fillip that can help both flourish.

The author is a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences. The views do not necessarily reflect those of China Daily.