Ministers from across the world have agreed a landmark deal designed to boost global trade and facilitate faster and easier trading between countries.
The World Trade Organization (WTO) agreement, secured at a meeting in Bali, Indonesia, is intended to reduce cross-border trade red tape, help developing countries to grow and reduce export and farm subsidies.
The so-called Bali Package, described as the first major agreement by the WTO since it was established in 1995, was welcomed by the UK Government, which said it had the potential to deliver £1 billion a year to British businesses.
The most significant part of the package for global commerce is the trade facilitation part of the deal, which is about cutting red tape – widely recognised as a major stumbling block for trade between nations – and speeding up port clearances.
Key parts of this deal include:
- Simplifying customs procedures by reducing costs
- Bringing down bureaucracy and cutting corruption
- Harnessing technology to make trade easier, faster and cheaper
- The deal could be worth $1 trillion to the world economy by bringing down the costs of trade by between 10% and 15%.
What it means for UK
The UK Government said the deal will be particularly beneficial to the country’s small and medium-sized firms, who are often hit hard by the administrative costs of exporting goods.
David Cameron, the Prime Minister, said the agreement could be worth more than £1 billion to British firms.
“If just 100,000 small businesses either start exporting or spread to new markets over the next five years, this would generate an extra £30 billion for the UK economy and create 100,000 new jobs,” he said.
As more companies start to think about exporting and expanding overseas – encouraged by moves such as the WTO deal that should bring the costs of going global down – they are urged to think about how best to localise their efforts – whether through translated website content, foreign language staff or international marketing plans.
Business Secretary Vince Cable said: “Trade plays a key role in creating jobs and supporting a stronger UK economy. It will also bring growth around the world, which is not only good for developing countries, but will create new markets for British businesses to invest in.”
The WTO agreement is shored up by new research from accounting firm UHY, which shows the UK is one of the world’s best-placed countries in the race to capitalise on globalisation and enjoy positive future economic growth as a result.
The UK ranked 3rd in the UHY study with an overall score of 6.0, beating China and on an equal footing with New Zealand and the Netherlands.
Ladislav Hornan, chairman of UHY, said: “The UK ranked so well in the study as it performed well across all indicators. It came out especially well on the fact that it doesn’t levy any charges to businesses’ repatriated profits. Eliminating tax on repatriated income encourages companies to expand overseas and bring income back into UK.”
“The trade facilitation agreement is the first ever multilateral agreement negotiated in the WTO”, said Indonesia’s Trade Minister Gita Wirjawan.
“It will reduce the cost of trading, smooth the flow of goods across borders and provide more certainty for business.”
What it means for the translation industry
An increase in global trade is bound to result in an increase in the demand for translation services worldwide so this deal is expected to have a hugely positive effect for UK-based translation agencies.