Bridges Weekly Trade News Digest • Volume 10 • Number 13 • 12th April 2006
Trade Facilitation: More New Proposals, Talks Still Not ‘Text-Based’
Developing and developed country WTO Members made several submissions during the informal meeting of the Negotiating Group on Trade Facilitation from 5-6 April, some new but most building on previous ideas. According to a developing country trade delegate, the fact that a number of delegations submitted ‘one-pagers,’ that is, short, concise proposals on substantive issues, suggested that they were consolidating ideas in preparation for ‘text-based’ negotiations, although it was still unclear when these would start.
The trade facilitation negotiations, which aim to simplify customs procedures, cut red tape, and enhance developing countries’ capacity to engage in international commerce, are supposed to clarify three GATT 1994 articles: freedom of transit for goods from other Member states (Article V), trade-related fees and formalities (Article VIII), and transparency in the regulation and administration of trade regulations (Article X).
New paper outlines process for overseeing commitments
In their first joint submission China, India, Pakistan and Sri Lanka (TN/TF/W/82), outlined a process for identifying compliance requirements for developing countries when implementing the Doha Round outcome on trade facilitation. They argued that implementing trade facilitation commitments may be difficult for developing countries — especially if they do not receive sufficient assistance — and potentially left them facing disputes if they failed to comply. Thus, to calm Members’ anxieties about taking on new commitments, they called for developing countries’ commitments to be classified on the basis of their ease of implementation; for a mechanism to be establishmed for the provision of technical assistance and capacity building support "so to ensure that when Members examine specific trade facilitation rules during the negotiations, they could be assured how and what kind of assistance and support they can get to provide them the requisite comfort for taking commitments"; and some sort of arrangement about the applicability of the dispute settlement mechanism. They suggested that the last step could be accomplished through the establishment of a trade facilitation-specific process of consultation and mediation, with regular dispute settlement available only as a last resort.
In addition to this, there were a number of submissions on trade-related fees and formalities (Article VIII) and transparency (Article X). A joint submission by Peru, Chile and the US (TN/TF/W/89) called for trade regulations to be published on the internet, arguing that this would be cheaper than printing such information in government gazettes. The paper’s special and differential treatment (S&D) provisions included deferred implementation of commitments, along with technical assistance to support the development and maintenance of the relevant website. Nevertheless, some developing country delegations such as India, Kenya, Egypt and Jamaica expressed concerns about compliance costs, internet literacy and the availability of information technology (IT). The Philippines suggested requring internet publication alone implied an amendment of Article X as opposed to mere clarification or improvement. Australia reportedly proposed giving Members the choice of whether to use the internet or produce hard copies.
Hong Kong, Korea and Switzerland (TN/TF/W/92) called for Members to accept commercially available information such as invoices in lieu of certain documentation requirements. India reportedly expressed reservations on this front, arguing that such information could not substitute for legal customs documents.
New submissions on expedited customs clearance
Several submissions related to speeding up the clearance of goods at national borders. As has become common in the trade facilitation talks, many were joint submissions by developed and developing countries.
The US and Uganda made a submission (TN/TF/W/86) calling for the prohibition of ‘consular transactions’ related to trade. These require goods intended for export to receive certification from the locally-based consul of the importing Member. The US also asked for a separate and expedited customs procedure on express shipments (TN/TF/W/91), prompting Kenya and India to ask for a clear definition of what these shipments were, with the former pointing to developing countries’ limited border customs capacity.
The EU, Taiwan and Switzerland (TN/TF/W/87) put forward a submission calling for simplified customs procedures to be applied to ‘authorised traders’ who have a record of compliance with import and export requirements, and meet other specific financial and security-related criteria. Other Members such as India were reportedly not in favour of making the establishment of authorised trader status mandatory.
Latin American countries present ‘road-map’ for S&D
The second day of the meeting focussed on two issues of concern to developing countries, namely, S&D and technical assistance and capacity building (TACB).In a joint submission (TN/TF/W/81), eleven Latin American countries — Chile, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Paraguay, the Dominican Republic, Uruguay, Panama and Peru — proposed a ‘road-map’ for S&D in trade facilitation. The paper built upon an earlier one (TN/TF/W/41) that stressed that future disciplines must reflect the negotiating mandate’s stipulation that the scope of developing countries’ trade facilitation commitments must be commensurate with their needs as well as their capacity to implement them, and should also be linked to the delivery of TACB. In addition, the new submission proposed language that a future agreement could use for a S&D mechanism consisting of four phases: capacity self-assessment; notification; capacity development; and confirmation of the acquisition of capacity and compliance with the obligation.
While the use of ‘text-based’ language in the Latin American submission is notable, Zambia intervened on behalf of the group of least-developed countries (LDCs) to say that it was premature to draft text for future agreements since countries’ TACB needs had not yet been fully assessed. Tanzania, too, complained that there had been little progress on the Hong Kong mandate to ensure the adequate provision of trade facilitation-related TACB.
One developing country negotiator said that developing countries needed to come forward and identify areas where they needed TA, adding that a key challenge, in fact, was that many Members were not even clear as to how to go about this, and needed assistance in the identification exercise as well. The delegate admitted to concerns that this sort of prior identification might subsequently lead to demands for binding commitments, and called on developed country TACB providers to show more understanding of developing country realities.
A trade source suggested that concerns on TACB and the lack of clear timelines for the negotiations were contributing to the uncertainty about when text-based negotiations would start. The Hong Kong Ministerial Declaration merely called for members to move into drafting mode ‘early enough’ after the December 2005 summit. An informal timeline put together in January by ministers from some 25-30 Member countries suggested February for the submission and discussion of proposals on all three pillars of the trade facilitation talks (articles, S&D and TACB), and a target date of July for the first full draft report to the Trade Negotiations Committee.
Sources report that the chair announced that the next formal meeting of the negotiating group would take place on 6-7 June, followed by another on 10-11 July. Before, these, however, there will be an informal meeting on 11-12 May.
ICTSD reporting.