Customs organization ready to assist members with implementing WTO agreement.
The World Customs Organization has waited for the World Trade Organization’s agreement on trade facilitation to be approved for more than a decade.
On Nov. 27, the wait was finally over when the 160-member trade body approved the full implementation of the Trade Facilitation Agreement, the first multilateral trade agreement in the WTO’s 20-year history.
The agreement contains provisions for expediting the movement, release and clearance of goods, including those in transit. It also supports significant reductions in costs and administrative burdens related to moving goods across borders.
With decades of experience implementing global customs standards, WCO Secretary General Kunio Mikuriya said now that TFA is approved it’s a “golden opportunity for countries to implement WCO’s [trade facilitation] tools.”
One of those primary tools that customs administrations can deploy, if they haven’t already, is the 1999 International Convention on the Simplification and Harmonization of Customs procedures (or revised Kyoto Convention), which entered into force in 2006. The convention supports:
- Transparency and predictability of customs actions.
- Standardization and simplification of the goods declaration and supporting documents.
- Simplified procedures for authorized persons.
- Maximum use of information technology.
- Minimum customs control to ensure compliance with regulations.
- Use of risk management- and audit-based controls.
- Coordinated interventions with other border agencies.
- Partnership with the trade.
The revised Kyoto Convention’s basic tenets are largely ensconced within the WTO’s TFA, which the WCO outlined in a recently published “Implementation Guidance” document on its website.
In anticipation of the WTO’s TFA approval, the WCO Working Group on TFA (TFAWG) was set up in early 2014 to share experiences regarding the agreement’s implementation and enhance coordination between the WCO, donors, other international organizations, and the private sector.
The WCO also launched the Mercator Program with the aim to provide “tailor-made technical assistance” to implement TFA and support “harmonized implementation” based on the WCO’s international standards, instruments and tools.
Since the start of the Mercator Program in June 2014, the WCO has delivered more than 60 capacity building, technical assistance, and training sessions to support TFA implementation. The program draws from numerous resources within the WCO, such as the revised Kyoto Convention.
The WCO is also encouraging its customs administration members to form TFA National Trade Facilitation Committees. TFA’s Article 23.2 requires each member to “establish and/or maintain a national committee on trade facilitation or designate an existing mechanism to facilitate both domestic coordination and implementation of the provisions of the TFA,” the Brussels-based organization said.
By early 2015, more than two dozen customs administrations that responded to a WCO survey stated they have these TFA-implementation committees already in place. “As most of the TFA provisions are related to customs, it is vital that customs, as the key implementing agency, take a leading role in the national committees on trade facilitation to ensure adequate implementation of the TFA,” Mikuriya said.
He estimated that more than 85 percent of TFA’s measures involve customs activities.
However, other international governmental organizations with responsibilities for setting regulatory standards, such as the International Civil Aviation Organization, International Plant Protection Convention, Food and Agriculture Organization and World Animal Health Organization, have recently approached the WCO to better understand the impact of the WTO’s TFA on their activities.
TFA will enter into force once two-thirds of the WTO’s 160 members complete their domestic legal procedures and submit instruments of acceptance to the WTO.
In late January, the United States delivered its acceptance letter for the agreement to WTO Director General Roberto Azevêdo.
The delivery of the letter is the final step the United States must take toward the entry into force of the agreement. The U.S. acceptance letter was the third received by the WTO behind Singapore and Hong Kong.
“The agreement will unlock immense commercial opportunities for all developing and developed countries alike,” said U.S. Trade Representative Michael Froman in a statement at the time. “These benefits can only be fully realized with implementation of this agreement. We all want to start enjoying the benefits and we hope other members will take this crucial next step as soon as possible.”
It’s estimated that TFA’s streamlining of cross-border trade will add $1 trillion to the global economy over the next decade. The Organization for Economic Cooperation and Development stated that full implementation of the agreement could reduce costs for developing countries by about 15 percent.
As with many multilateral trade agreements, the United States will be closely watched by other WTO members to see how it implements TFA and assists other countries with their implementation.
Froman said the United States is “working with developing countries to help support effective implementation of this agreement. In fact, we are already considering how to best support countries who are committed to implementation—teaming up with other governments and the private sector.”
“The United States is playing a critical leadership role in implementation of the TFA and can count on the full support of the business community,” wrote Peter Robinson, president and chief executive officer of the U.S. Council for International Business, in a March 23 letter to Froman.
“We hope that other countries recognize the importance of this agreement as a way to modernize trade rules, and we call on them to follow suit and ratify TFA without delay,” added Jake Colvin, vice president for global trade issues at the Washington-based National Foreign Trade Council, in a statement.
This article was published in the May 2015 issue of American Shipper.
