1. 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

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

3. « 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

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

13. 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

14. 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

15. 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

16. 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…

17. 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

18. 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

19. 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

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