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Current WTO Negotiations on Trade Facilitation


Title: What does Trade Facilitation Mean? Author: user Last modified by: admin Created Date: 3/7/2005 12:02:30 PM Document presentation format: Prezent cia na obrazovke – PowerPoint PPT presentation

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Title: Current WTO Negotiations on Trade Facilitation

Current WTO Negotiations on Trade Facilitation
  • Dr. Mrs. Vijaya Katti,
  • Professor Chairperson
  • Management Development Programme
  • Indian Institute of Foreign Trade
  • New Delhi, India

The Evolving Definition of Trade Facilitation
  • OECD Simplification and standardization of
    procedures and associated information flows
    required to move goods internationally from
    seller to buyer and to pass payments in the other

  • UN/CEFACT the simplification, standardization
    and harmonization of procedures and associated
    information flows required to move goods from
    seller to buyer and to make payment

  • APEC The use of technologies and techniques
    which will help members to build up expertise,
    reduce costs and lead to better movement of goods
    and services.

  • WTO-so far, no clear definition on the term
    Trade Facilitation. However, it is understood
  • Trade Facilitation means systematic
    rationalization of procedures and documentation
    for international trade.
  • Issues covered under GATT Art. V, VIII X.

Existing WTO rules on trade facilitation
  • GATT 1994
  • Article V Freedom of Transit
  • Article VIII Fees and Formalities connected
    with Importation and Exportation
  • Article X Publication and Administration of
    Trade Procedures

Article V Freedom of transit
  • Most convenient routes
  • No discrimination
  • Removal of unnecessary delays/restrictions
  • No duties.

Article VIII Fees Formalities Connected with
  • Fees should reflect cost for services rendered
  • Reduce number and kind of fees
  • Simplify formalities documents
  • No penalty for minor errors.

Article X Publication Administration of Trade
  • Publication
  • Administration of laws
  • Appeals.

Other WTO Agreements
  • Agreement on the Implementation of Article VII
    GATT 1994 (Customs Valuation)
  • Agreement on Preshipment Inspection
  • Agreement on Import Licensing Procedures
  • Agreement on Rules of Origin
  • Agreement on Technical Barriers to Trade
  • Agreement on Sanitary and Phytosanitary Measures


Trade Facilitation Under WTO
  • Trade facilitation was added to the WTOs agenda
    at the first Ministerial Conference Singapore in
    December 1996
  • The Council for Trade in Goods mandated to
    undertake exploratory and analytical work on
    the simplification of trade procedures in order
    to assess the scope for WTO rules in this area.
  • Substantial exploratory and analytical work since
  • The main objective to identify the principal
    obstacles encountered by traders in cross-border
    transactions and to develop possible ways to
    overcome those barriers.

  • Doha Ministerial Declaration of 2001 agreed to
    start negotiation after the 5th Ministerial
    Conference on the basis of an explicit consensus
    on modalities of negotiations. Till that period
    review and clarification work to be undertaken
    (of Articles V, VIII and X).
  • Cancun Ministerial Conference of 2003 ended in
    failure on account of lack of explicit consensus
    on Singapore Issues.

  • Intensive negotiation took place between 22nd to
    31st July, 2004 in Geneva.
  • The Annex D modalities of GC Decision of 1st
    August, 2004 was a result of such negotiation and
    took on board most of the concerns of DCs.
  • A Core Group consisting of countries like India,
    Malaysia, Philippines, Jamaica, Egypt,
    Bangladesh, Indonesia, etc. highlighted the
    concerns of DCs regarding cost implication,
    technical assistance, SDT provisions and customs
    cooperation mechanism.

Trade Facilitation in the WTO Framework
Agreement, July 2004
  • WTO member States agreed
  • to launch negotiations on trade facilitation,
    aiming at the establishment of an agreement to
    further expedite the movement, release and
    clearance of goods, including goods in transit by
    clarifying and improving relevant aspects of GATT
    Articles V, VIII X.
  • To ensure technical assistance and support for
    capacity building.
  • Negotiations should aim at effective cooperation
    between Customs or any other appropriate
    authorities on TF and Customs compliance issues.

Elements of Annex D
  • Negotiations
  • To clarify and improve Articles V,VIII and X.
  • To aim at enhancing technical assistance and
    support for Capacity Building.
  • To aim at provisions for effective cooperation
    between customs authorities on TF and customs
    compliance issues.

Modalities set out in Annex D
  • S D treatment
  • Results of the negotiations shall take principle
    of SD treatment fully into account.
  • Should extend beyond traditional transition
    periods for implementing commitments.
  • Extenttiming of entering into commitments shall
    be related to the implementation capacities of
    developing and least developed countries.
  • Developing least developed countries are not
    obliged to undertake investments in
    infrastructure projects beyond their means.

  • Technical assistance and support for capacity
  • Support and assistance also to help implement the
    commitments, in accordance with their nature
  • Support for infrastructure development in certain
  • Linkage between provision of assistance and
    implementation requirement.

What to expect during negotiation?
  • Proposals made during clarification process can
    be taken as a guide.
  • Proposals made recently by EC, Canada, Japan,
    Korea, and USA on Article X is broadly a repeat
    of the proposals made during the study process.

Proposals ConcerningGATT Article V
  • Customs procedures documentation requirements
  • Non-discriminatory treatment
  • Fees and charges and securities
  • Cooperation
  • Technical assistance, capacity building, S D.

Proposals ConcerningGATT Article VIII
  • General provisions to make Art VIII more
  • Specific provisions regarding fees and charges
  • Specific provisions regarding data and
    documentation requirements and procedures
  • Specific provisions regarding customs and
    related import and export procedures
  • Provisions related to collateral or monetary
  • Injection of GATT/WTO principles
  • Technical assistance, capacity building, S D.

Proposals concerningGATT Article X
  • Publication and availability of information
  • Consultative/feedback mechanisms and minimum
    time periods before entry into force
  • Review and appeal procedures and due process
  • Technical assistance, capacity building, S D.

Identified Trade Facilitation Principles
  • Simplification/Standardization
  • Transparency/Cooperation/Due process
  • Non-discrimination

Important Proposals Made - Simplification
  • Use of risk assessment
  • Single Window
  • Border agency coordination
  • Authorised trader system
  • Fees be relatable to service provided-not ad
  • Automation of customs including payment of
    duties or other fees and charges
  • Establish, notify, reduce standard processing
    time for goods release
  • Acceptance of commercially available information

  • Publication of all border related laws,
    regulations, administrative guidelines, decisions
    and rulings of general application information
    on customs and other border related agency
    processes conditions for different form of
    customs treatment appeal procedures fees and
    charges customs and other agencies management
  • Make such information readily available
    (Gazettes, Websites)
  • Stakeholders participation in rule making
    (establish a regular consultative mechanism
    minimum time period to comment on proposed rules,
    comments be discussed time gap between
    publication of rules and their implementation)

  • Enquiry point
  • Provide for a two-stage legal right of appeal
    against customs and other agency rulings
  • A standard time period should be set for
    resolution of minor appeals at administrative
  • Procedures of appeals should be easily
    accessible, including to SMEs

  • Costs of appeal should be commensurate with costs
    involved in providing for appeals
  • When a disputed decision is under appeal, goods
    should normally be released and duty payment be
    kept in abeyance
  • Advance Ruling for classification and rate of
    duty for domestic importer and foreign
    exporter/producer in a fixed time frame be valid
    for a given time (as already provided under ARO
    for origin)
  • Special Provisions for Express Consignments

  • Rules and procedures for trade should not
    discriminate between or among goods/or modes of
    transport, including for transit
  • Consistency and predictability
  • Use existing international standards
  • Development of common data set/minimum

  • Whether transit of oil and gas through pipeline
    could come under Article V (in addition to air,
    road, rail and boat).
  • Non-discrimination between individual carriers
    and types of consignments for transit procedures.
  • Simplification of documentary and data
  • Fees and charge be as per an indicative list of

Example of possible RulesThe E.U. Proposal
  • Documentation for Import, Export Transit
  • Avoid unecessary procedural obstacles
  • Adopt international standards
  • Create reduced data set, plus simplified,
    standardized documentation
  • Single window
  • Automated EDI-based systems

Example of possible RulesThe E.U. Proposal
  • Customs border crossing procedures
  • IT-based systems across Customs
  • Application of modern Customs techniques
  • One stop clearance/release facilities
  • Absolute time limit for Customs release
  • Cooperation between traders Customs
  • Databases of WTO members imp/export requirements
  • Coordinated long-term T.A. to improve

Way Ahead
  • Negotiations are likely to gather speed in next
    few months.
  • Effort would be draw up an outline for the
    agreement by July 05.
  • Most proposals during earlier phase came from
    demandeurs of TF.
  • Proposals also need to be made/tailored to the
    needs of DCs.

Issues Raised
  • Are rules/regulations easily available?
  • Transit problems?
  • What mechanisms for customs cooperation?
  • Inputs of trade and industry vital through
    survey/seminars/interactive sessions etc.
  • Coalition building/information sharing vital
    between developing countries
  • Important role of the Core Group

Some Possible Proposals
  • Should there be disciplines for SPS procedures
    under the cover of GATT Article VIII4?
  • These can be
  • Uniform Customs clearance procedures in all
    Members of a Customs Union.
  • In a Customs Union, there should be uniform
    standards of maximum residue level for
    pesticides, antibiotics etc.
  • No destruction of consignments rejected on
    account of high pesticide residue level or
    presence of pathogens
  • Transparency concerning rapid alerts should
    include a requirement of publication of final

  • An appeal mechanism be provided at the
    administrative level and then at judicial level
    for rejection of consignments of grounds of
    pesticide residue or other SPS considerations.
  • Can proposal of single window system of
    document filing within country be extended to
    cover one time filing of data at country of
    export which would then get transmitted either
    electronically or in paper format to the customs
    administration of the importing country? This can
    address some concerns of under-valuation.

TF What a Country can do?
  • Work on harmonization and recognized practices.
  • Stimulate business process re-engineering.
  • Do the home work e.g. establish a national
    Customs transit regime
  • Prepare for negotiations and beyond, taking
    advantage of available TA (Technical Assistance)
    and support to CB (capacity building).

Thank You