Presentation on theme: "Singapore Issues with special reference to Trade Facilitation"— Presentation transcript:
1 Singapore Issues with special reference to Trade Facilitation Shashank Priya, Director, Trade Policy Division
2 Singapore Issues Trade and Investment Trade and Competition Policy Transparency in Government ProcurementTrade Facilitation
3 Singapore Issues – The Genesis EC and Japan wanted new issues on the WTO AgendaTo coincide with mandated negotiationsTo balance losses in Agriculture and ATCSingapore Ministerial in 1996WTO considered an effective forum in view of strengthened Dispute Settlement process
4 Singapore Issues – The Genesis Resistance by many members – incl. IndiaCompromise – decided to study the issues in depthEspecially w.r.t. interaction with trade3 separate Working Groups formedWG on Relationship between Trade & InvestmentWG on the Interaction between Trade & Competition PolicyWG on Transparency in Government ProcurementWork Programme on Trade Facilitation in CTG
5 Doha Mandate on Singapore Issues Decision at Doha was –Recognizing the case for frameworksBegin a clarification process on many elements in each of the issuesNegotiations to take place after the Fifth MinisterialBased on a decision on modalitiesDecision to be by explicit consensusChairman’s clarificationMembers have the right to take a position to prevent this consensus and block negotiations
6 Trade & Investment – India’s position Question the rationale for bringing investment into the WTO as it was overburdened and ill–equipped to handle investmentQuestion the need for a multilateral framework as it would not grant developing countries any certainty of additional FDI flows and the BITs were serving the requirements well with the needed flexibilityTrade and Investment has different effects and different treatment of these issues was requiredInvestment policies are closely linked to national development policies in which developing countries need policy spaceDoha mandate is about a clarification process, not about negotiations and clarity has not been achieved
7 Trade &Competition - India’s Position Competition Policy covers besides, trade policy, investment, industrial etc policies, and WTO may not be the forum for Competition policy as suchCountries are at different stages of development: Multilateral Competition Policy assumes convergence of economic and even political interestsNaturally, bilateral agreements are few and confined to developed countries or to RTAsEfforts by some Members are to address governmental measures, while India is interested in ‘enterprise practices’ having cross border effects being addressedEffectiveness of WTO provisions doubtful in the absence of readiness of Members like the US, EC, Japan etc. for information sharing and DSU.‘Peer Review’ would work against developing countries in view of ‘asymmetry’ of market power of WTO Members
8 Transparency in GP - India’s Position For India ‘transparency’ means gathering full information about a Members procurement regime - No new commitments for changing or modifying any aspect of its procurement system;Regarding coverage, due to the federal structure of the government and the large number of entities involved it would be very difficult to provide detailed information on all levels of procurement;Information on the Central Government procurements of goods (not services) above a particular threshold limit could be considered;On other issues such as information on laws/ rules; procurement opportunities; information on procedures; time periods; etc. could be provided and was easily available already;India has objected to any prescriptions on domestic review procedures; andQuestioned application of the DSU on this kind of an agreement.
9 Trade Facilitation - India’s Position India had expressed its reservations regarding the need for multilateral rules on TF in WTO.No need for an agreement for what are essentially trade procedures.Other expert bodies like WCO dealing with similar issues.Resource implications in terms of modernization, commitment for timely clearance of goods would be difficult for developing countries to meet.Not clear how DSU would apply to a ‘Procedural Agreement’
10 Singapore Issues - Pre - Cancun Initial draft text (Rev 1) reflected two diametrically opposite optionsProponents’ - launching negotiations based on modalitiesOpponents’ - continuing the clarification process (No annexes)We had co-sponsored a paper highlighting the elements which still lacked clarityDraft text (Rev 2) released at Cancun framed it differentlyInvestment - Intensify clarification process; finalise modalities at a date linked to agriculture and NAMACompetition – Continuation of the clarification processTransparency in Government Procurement – commence negotiationsTrade Facilitation – commence negotiations
11 Singapore Issues - Pre- Cancun Core Group on Singapore IssuesJust prior to Cancun, a Core Group of 16 countries (G-16, Bangladesh representing LDCs) was formed G-16 extremely effective at CancunFormed the core of developing country oppositionArticulated opposition to launch of negotiations when many elements were not yet clearHighlighted lack of explicit consensus on modalities
12 Singapore Issues – At Cancun Green Room ProcessIn the Green Room discussions, at one point, EC offered to drop Investment and Competition from the agenda.Owing to further opposition, there was even a suggestion at one time that Transparency in Government Procurement too could be droppedAs no consensus could be reached, the Green Room process was called off and the Ministerial took no decision on Singapore Issues
13 Singapore Issues – Geneva Framework Agreement by GC (1st August 04) Trade and Investment; Trade and Competition Policy and TGP will not form part of the work programme set out in Doha Declaration (in paras 20-22, and 26).No work towards negotiations on any of these issues will take place within the WTO during the Doha Round.On Trade Facilitation, explicit consensus to commence negotiations on the basis of modalities set out in Annex D.
14 What is Trade Facilitation Systematic rationalization of procedures and documentation for international trade (UN ECE definition).In WTO context, it means issues covered under GATT Articles V, VIII and X.Would essentially cover subjects relating to importation and exportation: fees and charges; formalities; documentation; publication of laws; judicial and administrative tribunal; transit.
15 Why Trade Facilitation in WTO Rule basedStrong dispute resolutionOpen markets and smooth flow of international trade possible only if trade facilitative customs procedures in place.Reduce transaction costsSignify political commitmentUniformity of efforts.
16 BackgroundBefore Cancun Ministerial, a group of countries raised several issues on which clarification was needed.Some important issues were:Estimated costs for undertaking commitments?What mechanism for compensating DCs for additional expenditure?Nature of Special and Differential Treatment?How to enhance effective cooperation between Customs authorities?How to preserve development policy space?Discussions on above issues continued during post-Cancun phase
17 Negotiation processIntensive 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, S&DT provisions and customs cooperation mechanism.
18 Elements of Annex DNegotiations to clarify and improve Articles V, VIII and X.Negotiations to aim at enhancing technical assistance and support for CB.Negotiations to aim at provisions for effective cooperation between customs authorities on TF and customs compliance issues.
19 Important S&DT provisions in AnnexD S&DT should extend beyond granting of traditional transition periods for implementing commitments.Extent and timing of entering into commitments shall be related to the implementation capacities of DCs.DCs not obliged to undertake investments in infrastructure projects beyond their means.
20 Important S&DT provisions in Annex D Members to identify TF needs and priorities of DCs.Members to address concerns of DCs related to cost implications of proposed measures.Support and assistance to be provided to DCs to implement commitments resulting from negotiations.
21 Important S&DT provisions in Annex D Where implementation of commitments require support for infrastructure development, developed country members will make every effort to ensure such supportWhere required support and assistance for infrastructure is not forthcoming and DCs continue to lack necessary capacity, implementation of commitment will not be required
22 Other elements of Annex D A review of effectiveness of support and assistance provided.Collaborative effort with other relevant international organizations for TA and CB (IMF, OECD, UNCTAD, WCO, WB).Due account shall be taken of the relevant work of the WCO and other relevant international organizations.
23 GATT Article VIIIGATT Article VIII deals with fees and formalities connected with importation and exportation. Its important elements are:All fees and charges (other than import and export duties) imposed in connection with importation and exportation shall be limited to the approximate cost of services rendered. It should not represent an indirect protection to domestic products or a taxation of imports or exports.The number and diversity of fees for above purposes should be reduced.
24 GATT Article VIII (contd.) There is a need to minimize the incidence and complexity of import/export formalities and to decrease and simplify import/export documentation requirements.Substantial penalties should not be imposed for minor breaches of customs regulations or procedural requirements.
25 GATT Article VIII (contd.) The provision of this Article shall extend to fees, charges, formalities and requirements imposed by government authorities in connection with importation and exportation.Illustrative list of areas where this would be applicable: consular transactions, such as consular invoices and certificates; quantitative restrictions; licensing; exchange control; statistical services; documents, documentation and certification; analysis and inspection; quarantine, sanitation and fumigation.
26 GATT Article XGATT Article X deals with publication and administration of trade regulations. It lays down:Various laws, regulations, judicial decisions and administrative rulings relating to various customs related issues for clearance of goods (classification or valuation; rates of duties; requirements, restrictions or prohibitions on imports/exports) shall be published promptly by the contracting parties to enable governments and traders to become acquainted with them.
27 GATT Article X (contd.)No increase in rate of duty or a more burdensome requirement, restriction or prohibition on imports shall be enforced before such measure has been officially published.Each contracting party shall administer the laws of the above kind in a uniform, impartial and reasonable manner.
28 GATT Article X (contd.)The contracting parties shall maintain judicial, arbitral or administrative tribunals for prompt review and correction of administrative action relating to customs matters.Such tribunals shall be independent of the agencies entrusted with administrative enforcement.
29 GATT Article V GATT Article V deals with freedom of transit of goods. The term “traffic in transit” implies movement of goods and means of transport (other than aircraft) across the territory of the country, where both the starting and the terminating point of the journey lies beyond it.This article envisages that there should be freedom of transit via the routes most convenient for international transit.
30 GATT Article V (contd.)No distinction shall be made on the basis of flag of vessels, the place of origin, departure, entry, exit or destination, ownership of goods or means of transport.The charges imposed on traffic in transit shall be reasonable and will be on MFN basis.
31 Important Proposals Made About 50 proposals made so far by countries like EC, US, Canada, Japan, Switzerland, China, Korea, Uganda, Rwanda, Paraguay, Mongolia, Argentina, etc. Compiled in TN/TF/W/43TransparencyPublication of all border related laws, regulations, procedures and practices (Gazettes, Websites)Time interval between publication of rules and entry into forcePrior consultation and commenting on new and amended rulesInformation on policy objectivesEnquiry point/SNFPAdvance RulingRight of appeal/Release of goods in event of appealMaintenance of integrity amongst officials
32 Important Proposals Made (Contd.) Simplification of feesfees be relatable to service provided and not be ad valoremPublication/Notification of fees/chargesProhibition on collection of unpublicized feesPeriodic review of fees/chargesAutomated paymentReduction/minimization of the number and diversity of fees and charges
33 Important Proposals Made (Contd.) Simplification of procedures and documentationRisk managementPost clearance auditSingle Window/one time submissionBorder agency coordinationAuthorized trader systemAutomation of customsAcceptance of commercially available information and copies of documentsUse of international standardsPre arrival clearanceExpedited procedures for express shipmentsSeparating Release from Clearance ProceduresPeriodic Review of Formalities and Requirements
34 Important Proposals Made (Contd.) Establishment and publication of average release and clearance timesObjective criteria for tariff classificationTransitFees and ChargesPublication of fees and charges and prohibition of unpublished onesPeriodic review of fees and charges
35 Important Proposals Made (Contd.) Transit formalities and documentation requirementsGive choice of route to operatorsReduction/Simplification of proceduresHarmonization/StandardizationPromotion of regional transit arrangementSimplified and preferential clearance for certain goods
36 Important Proposals Made (Contd.) Whether transit of oil and gas through pipeline and electricity through grid 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
37 India’s Participation An active developing country participantParticipation is positive but also raising issues and points of concernPresented a room document on TA/CB during June meeting of NGTFWorking on a paper on cooperation mechanismWorking on proposals under Article VIII and Article V on the basis of studies commissioned (MIDS, Ace Global through UNCTAD)