Approval of the Minutes
The minutes were approved by the Group without amendment.
The Chairman informed the Group that unless anyone had objections, the meeting notes would be included in the Policy Groups section of the website. No objections were raised.
Matters Arising
There were no matters arising.
Trade Facilitation Progress Report
The Group noted that in recent weeks there had been many overt attempts to reinvigorate the Round between the EU and the USA. In an interview with the Today Programme, Commissioner Mandelson had stated that he had consistently indicated further flexibility (despite opposition from some Member States) so that negotiating partners would know where they stood vis-à-vis the EC should they make further moves themselves. Although all parties had expressed commitment to the Doha Round, there had remained a lack of real movement toward its completion. Nevertheless, Pascal Lamy (WTO) had been very positive (for reasons not altogether clear) on two occasions when Richard Lambert (Director-General, CBI) had met him in the previous two weeks.
The Group noted that the next meeting of the WTO’s Negotiating Group on Trade Facilitation (NGTF) was scheduled for the following week (30th - 3 st January) and that a good deal of background preparatory work had already been put in hand.
At the European level, the Implementing Provisions for the Security Amendment to the Community Customs Code had been published in the Official Journal and the European Parliament (EP) had reported on its first reading of the Modernised Customs Code (MCC). The EP had proposed just over 50 amendments. In particular the EP had strongly opposed the Commission’s proposal to allow customs simplifications only for Authorised Economic Operators (AEOs): this would have meant removing existing benefits currently available to all, as a way of demonstrating the advantages of becoming an AEO. In addition the EP had proposed that Customs Agents should be registered and be able to practise in any Member State – currently all but the UK and Germany regulated the profession and reserved national rights to representation – thus opening the European Market. Traders were in two minds about this.
The Group noted that, under the “Global Europe” initiative, the European Union had continued to engage in preparations for negotiating bilateral agreements with selected countries and sought to complete the details (with reference to the DDA) by mid-April 2007. The Group was asked to consider how trade facilitation (TF) provisions could be included in such bilateral agreements, especially if Doha were to fail. It was suggested by the Group that any bilateral agreement should feature a commitment to freeing up trade, with a particular focus on transit arrangements. The latter was thought to be one of the easiest ways to incorporate TF elements into such agreements. This led the Group to discuss whether it was possible to bilateralise trade facilitation, which was a universal concept. Assuming that it was, the Group took the view that the starting point in all such agreements was likely to be the same, and that there was therefore no reason to expect any variance in the TF provisions within future bilateral agreements except where specific points were deemed not to be relevant.
Influencing the Negotiating Group on Trade Facilitation
Special and Differential Treatment (S&DT):
The Group felt that S&DT measures were, in general, not appropriate in an agreement on trade facilitation because TF measures were most beneficial to developing countries’ interests, much more so than tariff cuts.
In order to convince developing countries of this, a cost-benefit analysis was needed. If the analysis demonstrated that the financial outlay of implementing TF measures was matched by the benefits within a short period, then the facts spoke for themselves. If they did not match, or did so only did so over a longer period, the need for technical assistance (TA) would have been demonstrated. The Group suspected that the costs would be borne by the public sector and the benefits would be received by the private sector. A suitable rationale for this might need to be developed.
The Group was critical of “post-factor assessment” and its potential role in S&DT. The notion that WTO Members would first sign up to an agreement and subsequently assess their capacity to implement was not thought to be the best method. Rather, assessment of capacity should take place before signing an agreement. The World Bank was already helping developing countries self-assess their needs.
Balance of Risks and Rewards for Developing Countries
The Group expressed concern that developing countries might continually be placed in the position of “playing catch-up” with their developed partners, predominately due to the ever-present pressure to remain technologically up to date. Further, Group members believed developed country traders were likely to be the net gainers from of the SAFE framework for AEOs. Although the AEO regime was not being discussed at the WTO, it was nonetheless perceived by developing countries as another potentially disadvantageous element, and so impacted on their approach to the TF negotiations.
The Group also noted that, in economic terms, the regime for AEOs was highly beneficial to developed countries. By integrating security with trade procedures it reduced labour costs that were expensive in developed markets. Developing countries on the other hand had lower labour costs, and did not stand to gain as much.
Savings Obtained from Trade Facilitation:
The Group noted the core value of trade facilitation measures in speeding up import processes, resulting in goods moving more quickly, shorter lines of ships queuing to enter port; and eliminating the need for additional berths.
Simplifications of this kind were seen as being of supreme importance. They were neither particularly sophisticated nor particularly high-cost. Group members therefore supported the need for them to be an integral part of the bound core endeavours.
Analysis of W/43/Rev.10:
With reference to TFAAG papers 0701 and 0702, the Group began an assessment of the third generation proposals put forward by members of the Negotiating Group on Trade Facilitation, noting that the key points to date had been incorporated into TFAAG paper 0703.
To help steer the Group’s thoughts the Chairman put forward three points for consideration:
- What were each Group member’s priority issues?
- Did the proposal fit the requirements?
- Were there any gaps the members felt needed to be addressed?
The Group noted TF section of the DDA as unusual for WTO agreements in that although it was government-to-government it would have a direct impact on traders when they encountered government controls. As a result the agreement’s provisions needed to be drafted with a clear view of how traders operated, so as to convey regulatory certainty wherever it could be conveyed. A TF agreement needed to be as clear and user-friendly as possible. This could be aided by the creation of guidelines (including definitions) to support the main document, as the Negotiating Group had recommended.
A. Publication and availability of information
The Group saw benefit in incorporating point 2 (internet publication) into point 1 (publication and notification of trade regulations…). In the group’s view, Internet publication ought to be the prevailing method of communicating, given that traders on the whole had access to and used the Internet.
B. Time period between publication and implementation
During the discussion on this measure, the Group stated that publication of regulations etc. should precede their implementation by a fixed period (which would need to be defined). This would ensure that traders had the time for any necessary preparation.
C. Consultation and comment on new and amended rules
The Group were of the opinion that as part of the consultation process, WTO member-governments should make best endeavours to amend proposed rules or give explanations as to why amendments were not made.
Incorporated into the paragraph on regular consultation should be the establishment of a border agencies unit
D. Advance rulings
There remained uncertainty concerning whether or not there was a specific definition for advance ruling. Within the proposal a clearer definition was needed to ensure equal application across the WTO membership.
G. Fees and charges connected with importation and exportation
With reference to the potential contradiction between the antepenultimate and penultimate sentence, the Group were unclear as to what was intended. The Group later took the view that by switching the order of these two sentences (and thus creating an “and” provision) the contradiction would be overcome.
H. Formalities connected with importation and exportation
The Group recommended the removal of specific reference to UN/CEFACT Recommendation No.33 in H.1. (h) (Single window/One-time submission) believing this would not articulate well with possible future changes to the Recommendation. The Group noted however that the recommendation on single window would, as a matter of nomenclature, remain as Rec.33, even if its substance were to be revised.
There was some confusion regarding the meaning of “shall not require” in H.1. (i): was the proposal calling for the elimination of pre-shipment inspection, or not? It was decided that there needed to be greater scope for distinguishing between physical and non-intrusive inspections.
K. Release and clearance of goods
There was a strong call for allowing audit-based controls, as a way of loosening the link between pre-arrival clearance and pre-shipment inspection. The Group also discussed on the scope for any proposal on K.1.(c) to cater for developments towards WTO Members’ mutual recognition of authorised traders.
L. Tariff classification
The Group recommended that the two paragraphs should be reversed, thereby reducing the possibility of arbitrary decisions through encouraging the use of the Harmonised System.
A typo was noted: WCO Harmonised System (not WTO).
The Group also noted two questions for further consideration:
- How much (and thus which) of the measures should be binding on all members?
- How much should be “best endeavours”?
SITPRO Work on Measurable Value of Trade Facilitation
The Chairman asked Group members to send to the secretary any information they had to assist SITPRO in its work on assessing the measurable value of trade facilitation.
Any Other Business
Summary Report of the Zambia Boksburg Meeting
The Group noted that the Report included interesting points regarding flexibility of commitments within a possible WTO trade facilitation agreement. The Group took the view that, given that all of the measures were deemed important, the debate on flexibility needed to centre on flexibility of implementation time, not flexibility as to what should be a core or non-core measure.
The Group noted that there were still questions on what form the implementation process should take.
Date of Next Meeting
The second half of March (to be notified).
Action Points
| 1. | To write a position paper on what SITPRO would like to see included in bilateral agreements | SITPRO |
|---|---|---|
| 2. | To pass on to the Group any information heard regarding the EU’s bilateral agreements from EuroChambers | BCC |
| 3. | To provide Frank Springate link to international TF standards and recommendations (UNTDED and WCO) as stated in H.1. (c) para 2.(ii) | SITPRO |
| 4. | Boksburg Report | SITPRO to circulate to the Group |
Return to Policy Groups: TFAAG
