EuropeAid Customs Capacity Building European Union Perspective Koos Richelle, DG EuropeAid 4 April 2007

EuropeAid EU and Commission aid implementation EU the largest donor in the world donors together responsible for 52% of all development aid Total amount in 2005 €43 billion Commission on its own: Second largest donor of humanitarian aid after USA Fifth largest donor of development aid (after USA, Japan, France and UK) Largest donor of trade related assistance Based on OECD/DAC figures 2005

EuropeAid EU policy context Policies, instruments 2000 UN Millennium Development Goals, fixing poverty reduction objectives for OECD Paris Declaration, 60 recipients and 50 donors on aid effectiveness 2005 European Consensus, the EU development policy, tying both Member States and Commission

EuropeAid Aid implementation context EC works with more than 150 countries and regions Aid implementation based on multi-annual programming Not more than two sectors per country always with attention for governance issues Priorities in accordance with national development objectives (PRSPs/NDPs)

EuropeAid EC – Trade Related Assistance (TRA) New and growing area of assistance Increased importance since 2001 Doha Development Agenda Support to customs Mainly trade related assistance (trade facilitation) Some support through integrated border management programmes

EuropeAid Increase in EC Trade Related Assistance EC commitment TRA : €4.3 billion, of this roughly €600 million for trade facilitation Average commitments €870 million per year

EuropeAid TRA distribution by Region Largest beneficiary: African, Caribbean and Pacific countries Focus on poverty reduction and LDCs

EuropeAid Key objectives of trade related assistance Enhance effective participation in the multilateral trading system, and on the related policy and institutional reforms Promote sound macroeconomic and tax policy framework, where trade benefits can foster development Support greater competitiveness and efficiency of the production system Support for regional economic integration

EuropeAid Trade Facilitation Key objectives Simplify, harmonise and automate import, export and customs procedures Support developing countries in implementing WTO commitments Address concerns of developing countries on capacity building and technical assistance

EuropeAid Trade Facilitation Main Features Holistic approach to trade facilitation: trade and investment, trade related transport infrastructure, institutional strengthening, support to private sector, customs Sometimes exclusive focus on trade facilitation, but also trade facilitation as part of wider TRA programmes All areas of cooperation covered, strong regional differences

EuropeAid Classical implementation: TA/tenders including contribution agreements with international organizations (UNCTAD) Contribution agreements with regional organizations: promoting ownership; increasing aid effectiveness; promoting donor coordination; more policy dialogue and results monitoring Budget support: positive effect on aid effectiveness, coherence; strengthens public finance management and reinforces macro- economic stability Trade Facilitation Instruments

EuropeAid Western Balkans: strong experience with customs projects, twinning Asia: part of larger programmes, support to increase with launch of ASEAN FTA negotiations Latin America: regional level, strengthen customs union Andean Community, Mercosur Africa, Caribbean, Pacific: regional level, comprehensive to develop Customs Unions (regional integration support programmes for CEMAC and for West Africa, harmonisation of customs for COMESA) Trade Facilitation Per Region

EuropeAid Harmonization, simplification of customs procedures, including transit Customs processing systems interconnection ASYCUDA/UNCTAD: Central Africa: FASTRAC (€12.5 million); SADC: Customs modernization programme (€18 million); COMESA (ICT programme) Joint border control posts West Africa Training all regions Trade Facilitation Typical Actions (1)

EuropeAid Regional networking Customs liaison committees and exchange of experience between regional organisations (ESA, SADC and SACU regions) Compensation mechanism for implementation of Customs Union (Common External Tariff) Free Trade Areas: West Africa (9th EDF €30 million regional integration); COMESA (regional integration mechanism: nearly €80 million) Trade Facilitation Typical Actions (2)

EuropeAid Demand driven: Regional integration gives strong impetus to trade facilitation Locally owned: need for political will and implementation structures. Customs reforms may encounter strong resistance to change Needs assessment: EC Diagnostic tool – Customs Blueprints) Institutional sustainability – local / regional: short & long term support, role of private sector Flexibility: need to adapt to changing circumstances Co-ordination: coherence with activities of other donors, reduce administrative burden Trade Facilitation Lessons Learnt

EuropeAid Aid for Trade EU €2 billion per year EU commitment by 2010: €1 billion EC, €1 billion member states, shows importance EU places on building capacity in trade related areas Trade catalyst for growth and poverty reduction in developing countries: in parallel with domestic reforms in trade-related policies, developing countries also need to enhance their customs capacities, productive capacities, remove supply side constraints, carry out fiscal reforms in line with good governance in tax area and upgrade infrastructure.

EuropeAid Concluding remarks Development not through development alone, need to promote economic growth EC committed to capacity building for economic growth EC active in support of customs through support for trade facilitation as part of TRA Significant investments since 2001, continued through €2 billion per year from 2010 onwards

Better Customs, Freer Trade, Safer Borders, Better Societies Enhancing the Global Dialogue on Capacity Building