Views on Trade Facilitation

The following is a list of general points related to a trade facilitation where the Boksburg Group has expressed a view.

• There is now general agreement that trade facilitation will benefit the majority of developing countries.
• The flexible approach to a trade facilitation agreement represented by the Boksburg Ladder is supported.
• The group evaluated all the issues that might be included in a trade facilitation agreement and identified what should be covered by hard legislation (subject to dispute settlement) and those that should be covered by soft legislation ( best practice only).
• There is recognition that trade facilitation not only includes the procedures of customs but also other border agencies In view of this there is a need for greater coordination between border agencies, and particularly between customs administrations and the ministries of trade that undertake the negotiations.
• Capacity building and technical support must be an integral part of any agreement covering trade facilitation.
• Concerns have been expressed related to the enforcement and dispute settlement process. Dispute settlement is the backbone of a WTO Agreement but it has to be a step of last resort and moderated according to a country’s capability to comply with aspects of an agreement.
• Without a multilateral WTO agreement developing countries would be subject to increasing bi-lateral and regional agreements that would be more resource intensive.
• Specific action is required related to transit issues covering landlocked countries and those countries whose goods need to transit a third country to be competitive.
• Closer cooperation and information sharing is required between parties, starting nationally with integrated border management, internationally between customs authorities and international institutions.
• There needs to be a clear understanding of what should be bound in an agreement and where flexibility through adoption of best practice would be more acceptable.
• An agreement should be based on binding commitments, yet should contain a ‘level of comfort’ for all members, with the focus being on improvements not penalties.
• Roles and responsibilities of parties and institutions active in an agreement, especially related to capacity building need to be well defined.
• The group noted that as tariffs had come down, resort to non tariff barriers such as SPS and TBT measures had grown. Whilst it is recognized that SPS and TBT are separate agreements in the GATT they are implemented at the border. It was therefore concluded that a trade facilitation agreement should also cover the implementation of TBT and SBS agreements. Business and governments need to work together to streamline these regime’s, by using risk management techniques, to avoid them becoming excessive impediments to trade.
• It was also recognized that a WTO agreement needed to extend beyond Articles V, VIII, X and customs matters, and include other border issues such as quarantine requirements; to that extent the relationship between a TF agreement and the WTO SPS/TBT agreements is important, including the transparency of non-tariff barriers; as well as more mainstream issues such as rules of origin and customs valuation;

Capacity Building

• The group has assumed there would be an agreement on trade facilitation and that technical assistance and capacity building has to be integral to that agreement.
• Definition: capacity building is understood to mean - developing or acquiring the skills, competencies, tools, processes and resources needed to improve the capacity of the border agencies to carry out their allotted functions and achieve their objectives.
• Capacity building is an intrinsic element of trade facilitation. Funding must be adequately provided and coordinated through a WTO/WCO type body, or an umbrella organisation including relevant major donors. It should be decoupled from political and commercial links with recipient countries. Improvements must be sustainable and the results should be measured by, for instance, benchmarking.
• Suggested mechanism: diagnostic study followed by action plan and recommendations.
• Types of capacity building: financial, human and technical

Dispute Settlement Understanding

• An agreement should be based on binding commitments, yet should contain a ‘level of comfort’ for all members, with the focus being on improvements not penalties.
• Innovative thinking is necessary to draw-up an agreement. It was suggested that the following points be considered:
  • a two track approach
• positive listing
• core requirements / best practice
• soft / hard regulation
• peer reviews
• benchmarking
• A transition period for developing countries should be clearly defined and generous.
• An emerging economy’s failure to implement a commitment should first undergo mediation to ascertain whether it is caused by a lack of capacity.

Principles

A WTO Trade Facilitation Agreement should be underpinned by the following key principles:

• financial and technical support to help countries achieve their trade facilitation goals;
• need for sufficient substance to create a measurable improvement to trade facilitation;
• need to measure and stimulate progressive improvement in the facilitation of trade and the adoption of higher standards;
• need to offer emerging economies the economic benefits of trade facilitation, without necessarily requiring them immediately to achieve the same degree of trade facilitation in all its aspects as the developed economies; and
• application must be subject to objective assessment, enforcement and policy review, adapted as necessary to take account of the specific nature of a trade facilitation active members should be consulted.

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