Download Trade Facilitation in the WTO

INTERNATIONAL TRADE POLICY
Module 2
NON AGRICULTURAL MARKET ACCESS
(NAMA)
Trade Facilitation
Outline
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1. What is Trade Facilitation?
2. Why Negotiate Trade Facilitation?
3. Trade Facilitation & Developing Countries
4. Trade Facilitation in APEC, ASEAN
5. Trade Facilitation in the WTO
1. What isTrade Facilitation?
What is Trade Facilitation?
• The WTO defines trade facilitation as:
“the simplification and harmonization of
international trade procedures. Where these
procedures are activities, practices and
formalities involved in the collecting, presenting,
communicating and processing a data required
for the movement of goods in international
trade.”
What is Trade Facilitation?
• The WTO definition is narrower than that used in
some other organizations.
• Broader definitions often include areas that fall
more under export promotion. This is often
referred to as “business” facilitation rather than
“trade” facilitation.
What is Trade Facilitation?
• In other organizations:
– In APEC it refers to the simplification of
procedural and administrative barriers to
trade, such as customs administration,
standards and technical regulations and barriers
to the mobility of business people.
– In ASEAN, considerable emphasis is place on
the issue of standards and technical
regulations.
2. Why Negotiate
Trade Facilitation?
Why Negotiate Trade Facilitation?
• Rapid growth in international trade reflected in
greater volumes crossing borders
• Globalization and international competition have
led to corporations using multiple locations for
manufacturing and sourcing of inputs and final
products
• Changing business practices provide focus on
speed of delivery, for example, “just-in- time”
production.
Benefits of Improved Trade
Facilitation
• To Government:
– Increased revenue through improved tariff
collection and reduction of corruption
– Increase in trade and growth
– Increased attractiveness to investors
– Improved trade policy through improved statistics
Benefits of Improved Trade
Facilitation
• To Business:
– Decrease in transaction costs
– Fewer procedural delays
– Less documentary information required
– Greater predictability in regulations
Potential Savings
• Various studies estimate the border related costs
of supplying required customs documents and
the surcharges arising from procedural delays
are between 2% and 15% of the value of the
traded goods.
3. Trade Facilitation &
Developing Countries
Trade Facilitation and
Developing Countries
• Trade facilitation is of benefit to all countries, but
generally developing countries have greater
potential gains from improved facilitation.
Trade Facilitation and
Developing Countries
Potential Gains to Developing Countries:
• Small and medium sized firms tend to be
relatively more important in developing
countries. They
tend to benefit more from
improved facilitation compared to large
corporations.
• Corruption is often common in border
transactions. While it can occur anywhere, its
costs and impacts are relatively more serious in
developing
countries.
Since the Benefits are Real, Why
isn’t it Easier?
• Even if there is a national will (both economic
and political), there may be a lack of capacity to
improve trade facilitation:
– Infrastructure capacity, particularly with regard to
computer technology
– Training required to develop human capacity
– Inconsistent aims between ministries and
bureaucracy, which may resist change
(protection of areas of control).
4. Trade Facilitation in
APEC, ASEAN
Undertaking Trade Facilitation
• Countries have independently undertaken to
improve trade facilitation to better meet domestic
needs.
– A growing trend is to include facilitation in
bilateral agreements.
– APEC has taken a leadership role in the region,
as trade facilitation has been a priority since
APEC was founded in 1989.
Undertaking Trade Facilitation
• ASEAN has made significant progress with examples
including:
– Expedited customs clearance at some borders now at an
average of two hours, down from several day
– Single window in Customs at the national level
– An AESEAN customs document
– Harmonization of systems of classification and valuation
– Standards harmonization across a number of products
– Development of Mutual Recognition Agreements (MRA)
for conformity assessment
5.
in
Trade Facilitation
the
WTO
Trade Facilitation in the WTO
• Exploratory and analytical work was mandated
by the Singapore Ministerial (1996)
• Became a part of the Doha Development
Agenda for negotiations in July 2004
• Hong Kong WTO Ministerial (2005) reaffirmed
the negotiation mandate and modalities and
endorsed the work program
Trade Facilitation in the WTO
• The mandate is to clarify and improve the
relevant GATT articles including:
– Article V Freedom of Transit
– Article VIII Fees and Formalities connected with
importation and exportation
– Article X Publication and Administration of Trade
Regulations
Examples of Most Frequent Proposals
• Article V:
– Eliminate fees not directly related to cost
– Increase transparency of transit requirements
– Simplify and standardize documents
– Non discrimination between modes of transit
– Some parties wish to have agreed transit routes
and time-frames, while others wish to leave the
route to the operator.
Examples of Most Frequent Proposals
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Article VIII:
Use of risk assessment
Early release of goods
Simplification and reduction of documents
Phase out mandatory use of customs brokers
Publication of all trade related fees
Single Window i.e., submit documents only once
to one authority
Examples of Most Frequent Proposals
• Article X
– Binding advance rulings
– Establish national contact points.
– Create official web page in each country linked
to the WTO.
Trade Facilitation in the WTO
• All these negotiations involve special
consideration for needs of developing countries:
– Technical Assistance
– Support for capacity building
– Longer transition period