Bridges Weekly Trade News Digest • Volume 6 • Number 29 • 6th August 2002
Need For Trade Facilitation Negotiations Questioned Despite Some Convergence
The WTO Council for Trade in Goods met on 22-23 July, where Members exchanged views on trade facilitation took up the outstanding ‘implementation’ issue of textiles (for a review of the latter, see related story, this issue). Discussions on trade facilitation at the CTG focused on GATT Article VIII "Fees and formalities connected with importation and exportation". Papers on this topic were submitted by developed and more advanced developing countries, including Canada, the EC, Hong Kong - China, Japan, Korea and the US.
Background
Like the rest of the so-called ‘Singapore issues’ (investment, competition policy, and transparency in government procurement), Members agreed to negotiations on trade facilitation after the WTO’s Fifth Ministerial Conference in September 2003 "on the basis of a decision to be taken, by explicit consensus, at that session on modalities of negotiations. In the intervening period, Members agreed that the CTG would "review and as appropriate, clarify and improve relevant aspects of Articles V, VIII and X of the GATT 1994 and identify the trade facilitation needs and priorities of Members, in particular developing and least-developed countries." However, many developing countries continue to resist the inclusion of the Singapore issues in the Doha negotiations.
For the most part, developed countries in their submissions called for the need to simplify and streamline the processing of imports under Article VIII, arguing that this was an area that could benefit all WTO Members. For instance, the EC said it would like to see Article VIII, which it said was the GATT provision at the heart of trade facilitation, "more operational rather than aspirational". (G/C/W/394, searchable online at http://www.docsonline.wto.org). The EC, which is the WTO’s primary demandeur for the Singapore issues, stressed that trade facilitation is "pro-development" and called for special treatment of least-developed countries. It said a WTO trade facilitation agreement would "lock in" reforms and make the application of WTO principles in customs operations "irreversible". It further argued for a "single window" that would allocate import processing to a single body to fulfil all related regulatory requirements.
Mirroring points made in other papers, Japan’s submission (G/C/W/401) proposed a list of improvements to Article VIII, including adoption of international standards, using risk assessment methods, introduction of a "single window" for processing of imports, and promoting automation of customs procedures. Hong Kong - China, in its paper (G/C/W/398), proposed the "injection of certain basic GATT/WTO principles" like non- discrimination and use of the least-trade-restrictive measures into Article VIII.
The US said it detected a sense of "coalescence" on the issue of trade facilitation in the papers and in interventions, noting that the WTO should take advantage of this opportunity to "move everyone forward" on the issue.
Scepticism remains
However, a number of developing countries remain less than convinced on the need for negotiations on this issue. The Philippines said that it was implementing trade facilitation measures not because of the WTO or regional trading arrangements but because of demands from the business community. It said work in this area was being done at the World Customs Organization, and cautioned against over-burdening the WTO agenda. Pakistan said it agreed with the EC about making Article VIII more operational, but not "prescriptive", adding that like many developing countries, it would need a considerable amount of technical capacity in the customs area.
Reflecting its traditional approach in opposition to the Singapore issues, India said Article VIII had been working well, with Members using it as guideline according to their needs. It pointed to comprehensive customs reforms in India, including shift to on-line customs processing of goods and automation of container cargo handling, as an indication of the success of Article VIII as it stood, and that there was no need for new binding obligations. Thailand said it could support a "single window" approach to customs clearances so long as it did not result in too much burden for developing countries. Brazil said the EC paper contained an excessive amount of disciplines without the assurance of equivalent benefits, and called for cost-benefit analysis on any proposed changes.
The CTG meets again on 10 October 2002.
ICTSD reporting.