IATA: New Trade Facilitation Agreement a shot in the arm for global trade

A trade agreement promoting faster, cheaper and easier trade that entered into force this week is “great news for airlines, which deliver about a third of the goods traded across borders by value,” said Alexandre de Juniac, IATA’s director general and CEO. The Trade Facilitation Agreement (TFA), which passed Wednesday, follows the ratification of the treaty by two-thirds of the members of the World Trade Organization.

The agreement promotes trade by establishing harmonized rules for expediting the movement, release and clearance of goods crossing borders, including goods in transit. Of particular interest to the air transport industry is the agreement’s commitment to accepting e-payments and electronic documentation. This aligns with the industry’s goal to modernize air cargo and IATA’s e-freight program.

The news is a particularly timely reminder of the dangers of protectionist rhetoric, which is growing louder various parts of the world. In the words of FedEx founder Fred Smith, “The United States being cut off from trade would be like trying to breath without oxygen.”

With the treaty now in force, IATA’s Juniac urged governments to “move forward with early implementation,” so that the TFA’s benefits can be felt as soon as possible across the industry.

“Aviation is the business of freedom,” he added “Air cargo is a vital link in the manufacturing supply chain and between producers and consumers. We look forward to working with governments and airlines to maximize the benefits of the TFA and make air cargo an even more potent catalyst for jobs, growth, and prosperity.”

Robert Keen, director general of the British International Freight Association (BIFA) noted that the agreement “aims to simplify and clarify international import and export procedures, customs formalities and transit requirements.” He said the new rules would lower trading costs, providing a boost to global economic growth. “If better border procedures and faster, smoother trade flows result from the agreement and help to revitalize global trade, BIFA members, which facilitate much of the UK’s visible trade, will benefit.”

Keen echoed other warnings that, with some nations attacking multi-country free-trade deals in favor of bilateral relationships, the global economy risked a return to “the bad old days” of protectionism.