Cost, Security And Technical Assistance Raised In Trade Facilitation Talks

22 June 2005

The WTO Negotiating Group on Trade Facilitation discussed nine new proposals at a 13-14 June meeting. The proposals covered issues related to Article V of GATT 1994 (transit of goods), Article VIII (fees and charges) and Article X (transparency in the publication and administration of trade regulations), which aim to further expedite the movement, release and clearance of goods, including goods in transit. While several proposals suggested measures to facilitate the speedy clearance of goods, Members also raised concerns with regard to security and control. Many developing country Members emphasised the need for technical assistance, noting that earlier proposals had failed to adequately reflect the issue.

Joint Latin American proposal on implementation

In a joint submission (TN/TF/W/41) 16 Latin American countries -- Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, EL Salvador, Guatemala, Honduras, Mexico, Panama, Paraguay, Peru, Uruguay -- outlined preliminary ideas for ensuring that developing countries will benefit from trade facilitation provisions and the scope of commitments will be linked to capacity to implement. The proposal underlines the inter-relatedness between trade facilitation rules on the one hand, and the identification of Members' needs and priorities, technical assistance, capacity-building and special and differential treatment (S&D) on the other. The proposal goes on to outline a new form of co-operation necessary for developing countries and least developed countries (LDCs) to build the capacity to implement new trade facilitation commitments.

Argentina, in a submission of its own on the clarification and improvement of Article X on transparency (TN/TF/W/40), proposed the creation of a web-link on trade facilitation that would include all WTO Members and their relevant national authorities. Argentina highlighted a list or inventory of trade facilitation measures and the bodies involved in their implementation. According to Argentina, setting up services for the notification, collection and translation of data from Members should be a technical assistance and capacity-building priority in the area of trade facilitation, and stressed the value of such a system to Small and Medium Enterprises (SMEs) in the developing world.

Proposals address risk management, admin expenses

Japan (TN/TF/W/42) and China and Korea (TN/TF/W/49) focused on risk management in their submissions. Japan highlighted risk management as a tool to simultaneously realise both trade facilitation and customs control goals. Japan suggested a system allowing in-depth inspection when risks are considered high, while providing immediate import permits in low-risk situations.

Singapore (TN/TF/W/47) raised the issue of the permissible scope of 'administrative expenses' for transit traffic. These charges are one of the few transit fees permitted. The proposal called for strengthening international co-operation with respect to transit and recognised the need for S&D in this area.

The EU submitted a new proposal on Article VIII (TN/TF/W/46) focusing on improved procedures and requirements related to charges and fees. Norway (TN/TF/W/48) highlighted customs border co-operation between the Nordic countries as an example of efficient practice, where the national border authorities of each country are allowed to exercise legal powers and provide services not only on behalf of their own state but for their neighbours as well.

Turkey (TN/TF/W/45) emphasised -- as key elements of an agreement on trade facilitation -- enhanced consistency and predictability; transparency and acceleration of customs clearance procedures; and the adoption of common international trade requirements and procedures.

Chinese Taipei highlights express shipments as a priority

In its proposal (TN/TF/W/44), Chinese Taipei revealed the results of a survey conducted among several hundred stakeholders, including manufacturers, traders, brokers and forwarders on the issue of trade facilitation. Among those surveyed, more than half listed "immediate clearance of express consignments" as one of three top priorities for the negotiations. According to the submission, the establishment of an Express Division at the Taipei Customs Office provided clear benefits, with clearance times dropping from 48 hours in 1996 to 2 hours at present and express entries increasing by 58.7 percent between 2001 and 2003.

Discussions security concerns, need for technical assistance

In discussions at the trade facilitation meeting, a number of Members emphasised the need to balance expeditious clearance of goods at the border with legitimate security and control needs. India, supported by Malaysia, said transit issues should not undermine the Members' security interests. India was particularly concerned about leaving the choice of route and mode of transport to the operator and said the number of transit points on the international boundary should be identified bilaterally by the two countries concerned. Another developing country trade delegate said that public interest concerns should be safeguarded with regard to choice of route. While Article XX (General Exceptions) and Article XXI (Security Exceptions) could apply to trade facilitation provisions, their application was subject to legal interpretation and it would make sense to consider similar provisions specifically in the trade facilitation context.

Kenya and Jamaica expressed concern over additional expenditures that the new trade facilitation obligations may lead to, with Kenya adding that very little attention had been given to technical assistance in the various proposals tabled so far, let alone concrete suggestions for identifying needs and priorities in this regard. Kenya cautioned that a lack of focus on technical assistance could undermine the negotiations. Another developing country trade delegate suggested that trade facilitation proposals should include information on infrastructural and other cost-related elements they entail, and technical assistance that Members were willing to provide. Countries could then undertake realistic assessments of the cost implications of proposals and decide whether they had the capacity to implement them in light of the technical assistance offered. Japan outlined its technical assistance activities underway in the area of trade facilitation.

The way forward

According to trade sources, Members are likely to agree on a progress report or update on the state of play of the trade facilitation negotiations at the end of July, rather than some form of "first approximation" of negotiating modalities aimed for in some other areas of the negotiations. This, according to the source, is because the area of negotiation is new, and a clearer understanding of the implications of the various proposals is needed. In addition, developing countries are still actively submitting proposals -- despite not being the 'demandeurs' of the negotiations -- and it would thus be unwise to decide on a cut-off point for submissions.

In related news, Andrew Stoler, Director of the Trade-Facilitation Alliance (TFA), which includes, among others, the US Express Delivery and Logistics Association, the International Federation of Pharmaceutical Manufacturers Associations, and the Philippine Exporters Confederation, said his group was "particularly heartened" by the good pace of the negotiations, and added that the TFA hoped to see an agreement in Hong Kong on a framework for trade facilitation. This framework would set out the main chapter headings and the basic concepts of the agreement, with the details -- including how to address the demands of developing countries for technical assistance to implement any future agreement -- to be worked out later.

The next meeting of the Negotiating Group on Trade Facilitation is due to take place from 25-26 July 2005.

ICTSD reporting; "Trade Facilitation: Industry Group Welcomes Progress In WTO Talks on Trade Facilitation," WTO REPORTER, 17 June 2005  

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