Countries Reach 'landmark Deal' To Cut Trade Costs

Members of the World Trade Organization (WTO) have agreed a landmark deal which could cut trade costs by £113bn a year.

Some 67 members agreed to cut red tape around licensing and qualifications.

The signatories, which include the UK, United States, EU and China, are a minority of the WTO's 164 members, but represent 90% of all services trade.

Banking, information technology, telecoms, architecture and engineering are among the service sectors which could benefit most from the deal.

Anne-Marie Trevelyan, the UK's International Trade Secretary, said the UK stands to gain as it is the world's second largest services exporter.

She said the deal showed "exactly the kind of cooperation we want to see at the WTO and demonstrates it can deliver trade rules fit for the 21st Century".

International policy forum the Organisation for Economic Co-operation and Development (OECD) has estimated that implementing looser regulations in G20 countries - the world's 20 top economies - could reduce trade costs by up to 6%.

The Department for International Trade said the new rules would make it easier for businesses, in particular small and medium-sized firms, to "navigate foreign markets and obtain authorisation to export overseas".

"British businesses consistently cite complex administrative procedures as barriers to accessing international markets," the government said.

"Once the new rules are in force, businesses can expect licensing applications to be processed in a timely manner, acceptance of electronic copies of qualifications by competent authorities, and an end to unreasonable and hidden fees."

The government said the biggest savings on trade were likely to be in finance and tech, helping "ensure London retains its position as Europe's leading financial centre".

Miles Celic, chief executive of financial sector body The City UK, said the agreement was "an essential step towards removing the types of trade barriers most often experienced by services exporters".

Meanwhile, George Riddell, EY director of trade strategy, said the deal was a "meaningful achievement that has real commercial value for services providers all around the world".

The European Services Forum (ESF), which represents the interests of the European service sectors, welcomed the agreement announced in Geneva, saying it had called for such regulation for more than 20 years.

The WTO, which administers a system of rules governing global trade, aims to bring the new rules into force in 2023.

Chris Morris, global trade correspondent

The most significant thing about this agreement may be that it has actually happened.

It's the first negotiated agreement on services at the WTO in a quarter of a century. So, it's of great symbolic importance.

Business groups have warmly welcomed moves to harmonise regulations and make it easier to sell services around the world. But we'll have to wait and see how much easier it actually becomes.

The OECD estimates that implementing looser regulations in G20 countries could cut $150bn (£117bn) every year from the cost of services trade. But the theory has to be put into practice.

"WTO agreements may not always make it into the headlines, they may not sound sexy," admitted the organisation's director general Ngozi Okonjo-Iweala.

But, she argued, this one shows they can make a real difference.

The WTO has struggled to make an impact in recent years when operating by consensus, which means that all member countries have to agree.

This agreement - involving 67 countries representing 90% of global services trade - provides a model for "coalitions of the willing" to make progress on other issues, such as e-commerce and environmental concerns, in the future.