Bridges Weekly Trade News Digest • Volume 9 • Number 32 • 28th September 2005

Trade Facilitation: Members Clarify Proposals, Look Towards Agreed Text

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The 19-20 September meeting of the Negotiating Group on Trade Facilitation saw four new proposals on issues including anti-corruption, technical assistance, and trade embargoes.

Members also discussed a Secretariat document (TN/TF/W43/Rev.2) that consolidates into a single text existing proposals on the broad mandate of the trade facilitation negotiations: the clarification and improvement of General Agreement on Tariffs and Trade (GATT) 1994 Articles dealing with freedom of transit for goods (Article V), trade-related fees and formalities (Article VIII), and transparency in the regulation and administration of trade regulations (Article X).

Trade facilitation is one of the few areas in the Doha Round negotiations in which talks have been progressing smoothly. However one trade source admitted that disagreements could arise as the discussions get more technical, since several proposals target ‘behind-the-border’ measures that many Members may feel should be determined domestically. Indeed, the recent session saw some delegations, notably India, voice grievances about some of the ideas on the table.

Dominican Republic: Corruption a barrier to international trade

Contending that inappropriate governance and corruption constituted a barrier and "additional invisible charge" to goods trade in addition to undermining respect for the law in general, the Dominican Republic submission (TN/TF/W/60) proposed several anti-corruption measures. These included improving ethics policies such as a code of conduct in the customs services; introducing computerised systems to give officials less leeway in making basic customs decisions; considering offences by customs officials to be criminal acts; and technical assistance to improve governments’ capacity to prevent customs offences coupled with support for additional costs that such efforts might incur.

Proposals call for long-term TACB Mechanism

Taiwan’s submission (TN/TF/W/62) called for the creation of a long-term mechanism to deal with technical assistance and capacity-building (TACB) issues, and the use of international standards. Pakistan and Switzerland (TN/TF/W/63) echoed the call for a specific, transparent, and predictable TACB mechanism to support the implementation of any future obligations, emphasising that developing and least-developed countries’ commitments should be appropriately sequenced and must not exceed their capacity to implement them. They also asked the Secretariat to prepare an inventory of trade facilitation measures on the basis of existing proposals, suggesting that it would help Members assess their needs and priorities in order to determine which measures they can implement and when.

Thailand’s submission (TN/TF/W/61) summarised its achievements in simplifying and computerising its customs clearance system. The country has instituted a ‘gold card’ scheme that exempts reliable exporters and importers from inspection and the duty drawback approval at the time that they submit a claim. Its customs department also consults with the private sector in order to better appreciate their problems, and inform them of new rules and regulations.

In nod to US embargo, Cuba moots ban on transit discrimination

In what appeared to be an implicit criticism of the US’ trade embargo, Cuba (TN/TF/W/64) proposed adding new language to GATT Article V that would prohibit commercially-unmotivated discriminatory measures with respect to transit. The proposal argued that the article’s non-discrimination requirement was being "systematically breached by some WTO Members" that "…apply, unilaterally and for non-commercial reasons, laws and measures of extraterritorial scope that ignore the legitimate interest of other Members’ right to free transit… as well as the commercial interests of third parties affected." The Cuban government has protested in the UN that the US slaps a six-month entry ban on any ship that touches a Cuban port.

WTO Members also discussed the Secretariat’s compilation, which classified existing trade facilitation proposals into 13 broad issue areas: trade regulations; a period between publishing laws and regulations and implementing them; a consultation process on new and amended rules; advance rulings; appeal procedures; measures to enhance non-discrimination; fees and charges connected with trade; formalities associated with importation and exportation; consularisation, i.e. consular fees levied in connection to goods imports; border agency cooperation; expedited and simplified clearance of goods; objective criteria for tariff classification; and matters related to goods in transit.

India expressed reservations about a number of the proposals, citing in particular resource and bureaucratic burdens associated with implementation, potential conflict with other WTO rules, interference with the laws and judicial and administrative procedures of Members, and unnecessary or non-mandated binding commitments.

One trade delegate reported a "sense of urgency" on the part of Chair Ambassador Muhammad Yacob Noor of Malaysia to come up with a draft document that could serve as the basis for discussions at the WTO’s Hong Kong Ministerial Conference in December. Trade sources suggest that the Negotiating Group would do well to specify in initial draft texts the areas on which there was consensus and those on which Members have reservations, and leave proposals lacking consensus out of the text that it sends to Hong Kong.

Need for dynamic approach to technical assistance

A developing country negotiator noted a serious concern among some Members that technical assistance would be ‘one-off’ and would exclude issues not initially identified by them in WTO discussions. This might make developing countries reluctant to identify their priority areas for fear of missing out on future grants on other issues. The delegate observed that developed countries needed to reassure them that there would be no ‘time-limit,’ and that the identification of areas in need of technical assistance would be a continuous, dynamic process. Noting that the simple provision of technical assistance did not necessarily mean countries had the capability to implement obligations, he questioned who would determine when exactly a developing country was able to do so. While the Swiss-Pakistani proposal had called for the establishment of an independent body to oversee technical assistance, the idea of having such a body judge countries’ ability to implement trade facilitation obligations might not be palatable to many WTO Members.

ICTSD reporting.