WTO Negotiations on Trade Facilitation - Formalities Hanoi, Viet Nam, January 2007 WTO Negotiations on Trade Facilitation - Formalities Birgit Viohl, UNCTAD Trade Facilitation Section Single Window Conference Dakar, 5-7 November 2008 UNCTAD Workshop on WTO TF Negotiations

History of TF in the WTO 1. WTO Ministerial Conference Singapore Issues July Package 1996 2001 2003 2004 200x 1. WTO Ministerial Conference

« July Package » 2004 On 1 August 2004, Members of the WTO General Council agreed on a Doha Work Programme (WT/L/579); a framework and agreements for the negotiations. Contains 4 Annexes The General Council decided to commence negotiations on TF on the basis of the modalities set out in Annex D. Trade Facilitation negotiations part of the Single Undertaking Annex D becomes the modalities text of the TF negotiations

Annex D Modalities Objective of negotiations (para 1) Scope of negotiation « Clarify and improve relevant aspects of GATT Articles V, VIII and X. » « Enhance technical assistance and support for capacity building. » « Provide effective cooperation between customs or other appropriate authorities on TF and customs compliance » Establishes a Negotiation Group on Trade Facilitation Framework for SDT provisions

Hanoi, Viet Nam, January 2007 Scope of negotiations Clarify and improve relevant aspects of Art V, VIII and X od GATT 1994 GATT Art.V Freedom of Transit GATT Art.VIII Fees and Formalities connected with Importation and Exportation GATT Art.X Publication and Administration of Trade Regulations Limited Scope Only GATT 1994; No other agreements Only documentary and procedural aspects of cross-border trade and related information flow Agreement on the Implementation of Article VII (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 The term UNCTAD Workshop on WTO TF Negotiations

Hanoi, Viet Nam, January 2007 Formalities Trade related formalities are necessary to comply with the requirements of Customs and transport procedures but also to general trade such as phytosanitary certificate, Certificate of Origin, import licences. Filling out of documents, lodging of documents, provision of x copies of commercial documents, payments etc. Burden: Cumbersome procedures and cumbersome formalities and paperwork Problem: Direct and indirect costs to trade Create operational inefficiencies and reduce control and security along the logistics chain. Direct and indirect costs to trade and also create inefficiencies for government services and reduce control and security along the supply/logistics chain (WB presented yesterday the impact on trade of logistics costs) UNCTAD Workshop on WTO TF Negotiations

Multilateral framework WTO Law contains disciplines related to certain aspects of the administration of trade related procedures – in particular Article VIII of GATT 1994 and also in the agreements in annex to the GATT 1994, e.g. Rules of Origin, Import Licence But non-mandatory legal language of Article VIII GATT 1994

Art. VIII Fees and formalities related to importation and exportation Hanoi, Viet Nam, January 2007 July 2004 WTO members decided to start negotiations on Trade Facilitation Review with the aim to clarify and strengthen those aspects of the GATT 1994 agreement related to trade facilitation; Art. V, VIII, and X Art. VIII Fees and formalities related to importation and exportation Negotiations are on-going as part of the Doha Round Overview: What are Members’ preoccupations and proposed solution for establishing multilateral rules UNCTAD Workshop on WTO TF Negotiations

In Geneva they negotiate…so what? Business is moving ahead and provides solutions But Need for political will for successful implementation one can not change neighbours’ systems and procedures multilateral rules refer to technical standards which then become regional or int’l norms financial resources and technical assistance

Hanoi, Viet Nam, January 2007 Elements of GATT VIII “All fees and charges […] shall be limited in amount to the approximate cost of services rendered” “The contracting parties recognize the need for Reducing the number and diversity of fees & charges […] Minimizing the incidence and complexity of import/export formalities Decreasing and simplifying import/export documentation requirements “ Dispute Settlement whether Ad valorem tax is not an approximate cost of services rendred. Against Argentina. Statistical tax. US in 1986 on Custom fee as Ad valorem UNCTAD Workshop on WTO TF Negotiations

Hanoi, Viet Nam, January 2007 Negotiation Process WTO Members propose trade facilitation measures which are Procedures, tools, standards which are in practice or internationally developed Clearer legal language of the Article’s provision That would be too simple UNCTAD Workshop on WTO TF Negotiations

Proposals made at the WTO Hanoi, Viet Nam, January 2007 Proposals made at the WTO UNCTAD Workshop on WTO TF Negotiations

Article VIII Proposals on fees and charges Hanoi, Viet Nam, January 2007 Article VIII Proposals on fees and charges Fees and charges: Specific parameters for fees and charges; Publication / Notification; Periodic review; Automated payment (this has not been further proposed) UNCTAD Workshop on WTO TF Negotiations

Proposals on formalities Hanoi, Viet Nam, January 2007 Reduction of import/export formalities and documentary requirements: Periodic reviews of formalities Use of international standards Acceptance of Commercially Available Information and Copies Single Window/ One-time submission Prohibition of Consular Requirements Disciplines on Mandatory use of Customs Brokers Release and Clearance of Goods: Pre-arrival clearance Express shipments with special treatment Risk management based on international standards Simplified procedures for authorized traders Post-clearance audit Seperating Release from Clearance Publication of Average Release and Clearance Times UNCTAD Workshop on WTO TF Negotiations

Proposals on formalities Hanoi, Viet Nam, January 2007 Reduction of import/export formalities and documentary requirements: Periodic reviews of formalities Use of international standards Acceptance of Commercially Available Information and Copies Single Window/ One-time submission Prohibition of Consular Requirements Disciplines on Mandatory use of Customs Brokers Release and Clearance of Goods: Pre-arrival clearance Express shipments with special treatment Risk management based on international standards Simplified procedures for authorized traders Post-clearance audit Seperating Release from Clearance Publication of Average Release and Clearance Times UNCTAD Workshop on WTO TF Negotiations

Proposal: Single Window SW early proposal (EC, Peru, Korea, Singapore, Japan & Mongolia etc.) Problem of different definitions and concept of SW. What should the WTO attempt to do? Detailed definition versus broad concept. Stipulate operational standards Single Window as a stand alone measure to speed up the Customs release and clearance, but by moving to a SW…

Proposal: Single Window …other proposed disciplines are addressed as well (modular set-up: Analysis and Re-engeneering of processes, Re-definition of data and document requirements, Introduction of international standards) Reduction/Limitation of Formalities Use of Int’l Standards Acceptance of Commercially Available Information and copies SW offers also platform for information exchange on trade related legislation (Transparency Art. X) and strengthens Border Agency cooperation and cooperation between Customs and the trading community

Implementation issues Introduction of SW (mixed or electronic) is costly and lengthy. Electronic SW a best endeavour option (to the extent possible) Technical Assistance clause in the negotiations Developing countries and LDC only take up commitments if they receive the required technical assistance Negotiations are opportunity to get political support and financial resources for pursuing trade facilitation reforms, including for SW

Negotiations still on-going. What needs to be done? Technical knowledge for the drafting of the rule required. Definition of SW Standards used for SW Basis for regional inter-operability Country-level: Analyse current situation. Would current SW comply with the rule? How long does it take for your country to be in compliance What does it take your country to be in compliance Contact negotiating authority to participate in drafting this rule and to inform them of the existing system

Birgit.viohl@unctad.org Jan.Hoffmann@unctad.org Thank you ! Birgit.viohl@unctad.org Jan.Hoffmann@unctad.org