ACP Group wants development focus at WTO's trade facilitation talks

Original Publication Date: 
16 February, 2006

In the context of the current negotiations on trade facilitation, development must be the main objective and focus, said the African, Caribbean and Pacific (ACP) Group of developing countries in a proposal submitted to the WTO's Negotiating Group on Trade Facilitation.

The ACP Group stressed that the commitment to provide technical assistance and capacity-building to developing countries in the area of trade facilitation - both in the context of the negotiations and in the implementation of the outcomes of the negotiations - should be made immediately operational.

It also proposed the setting up of a Trade Facilitation Fund, managed by an inter-agency coordinating mechanism, with contributions from bilateral and multilateral donors.

Jamaica, on behalf of the ACP Group, introduced the group's proposal (TN/TF/W/73) at the first meeting of the Negotiating Group (15-16 February) since the Hong Kong Ministerial Conference.

The ACP Group elaborated that development concerns include, inter alia, ensuring that special and differential treatment in favour of developing and least-developed countries is accorded and made fully effective and operational; that international cooperation is enhanced through the provision of sufficient and effective technical assistance and capacity-building in trade facilitation; and that the outcomes of the negotiations reflect the needs of these countries for development policy space and flexibility.

There were eight new proposals presented at the meeting. Besides the ACP proposal on promoting development, proposals were put forward by Chile (for the three articles under the trade facilitation mandate), by a group of countries including the European Communities (on shipments in transit), Moldova and Kyrgyz Republic (on flexibilities for small countries in transition); Australia, Canada and US (on advance rulings), Egypt (on national experience) and two proposals by India (one on improving border clearance procedures and formalities on import and export; and another on border control for food quality that can hinder trade).

The meeting was chaired by the new chairperson, Tony Miller of Hong Kong who replaced Ambassador Muhamad Noor Yacob of Malaysia. Miller told members that in this second phase of the negotiations, the proposals should be more concrete and less general.

The mandate of the trade facilitation negotiations are "to clarify and improve relevant aspects of Articles V (Freedom of Transit), VIII (Fees and
Formalities connected with Importation and Exportation) and X (Publication and Administration of Trade Regulations) of GATT 1994 with a view to further expediting the movement, release and clearance of goods, including goods in transit".

The ACP Group's proposal, on the importance of promoting development objectives through technical assistance and capacity-building, highlighted several key elements contained in Annex D (of the 1 August 2004 Decision of the WTO General Council, which sets out the mandate and modalities for the trade facilitation negotiations) designed to ensure that these negotiations promote development objectives.

These elements include "enhancing technical assistance and support for capacity building in this area"; developing "provisions for the effective cooperation between customs or any other appropriate authorities on trade facilitation and customs compliance issues"; fully taking into account "the principle of special and differential treatment for developing and least-developed countries"; and that these countries would not be obliged "to undertake investments in infrastructure projects beyond their means".

The Group acknowledged the importance of the mandate contained in Annex D, as regards transparency (as an essential element of a regulatory business environment); consistency and predictability (that remove uncertainty in trade operations); non-discrimination (as a guarantee of impartial and uniform administration of border-related regulations and procedures); simplification and avoidance of unnecessary restrictiveness (that are essential for the enhancing of efficiency); and due process (devising an appropriate mechanism to review and correct administrative action).

According to the Group, while the proposals so far are largely consistent with ongoing national programmes in some ACP countries, it must be borne in mind that ACP countries are at different levels of development and by extension, utilize varying levels of border procedure and administration. Trade facilitation for the ACP is therefore as much about institutional development, systems modernization, attitudinal culture and changes, human resource training, and quipment and technology upgrading, as it is about trade rules.

It is important that the mandate of the Negotiating Group is adhered to without diverting into related areas, the ACP paper said, adding that the WTO Secretariat should expeditiously prepare a study that compiles various trade facilitation tools and measures that have been used by WTO Members, the physical and policy infrastructure required to adopt and implement such tools and measures, the time-frame for implementation, and their respective total costs of implementation (from costs associated with policy or regulatory changes, physical infrastructure development, acquisition of technology, human resource
training, etc).

The ACP Group also attaches great value to the flexibilities contained in Annex D, including the latitude of Members to ultimately decide on the possible format of the final result of the negotiations and the allowance for consideration of various forms of outcomes; the extent and timing of entering into commitments shall be related to delivery of the required support and assistance and to implementation capacities of developing and least-developed countries; LDCs will be required to undertake commitments only to the extent consistent with their individual needs and capabilities; the principle of special and differential treatment for developing and least-developed countries must be fully reflected and made directly operational in any negotiated outcome; and the concerns of developing and least-developed countries relating to the cost implications of proposed measures shall be effectively addressed.

Therefore, although it is recognized that there are potential gains from trade facilitation, the ACP would not want to see any new disciplines or commitments which would impact negatively on existing policy space and the flexibility of developing countries in adopting trade facilitation measures.

It is also critical that a balance be struck between the legitimate objective of border control and the economically desirable goal of trade facilitation. In addition, full account should be taken of the economic structure of and levels of development in ACP countries.

The ACP Group stressed that the commitment in Annex D to provide technical assistance and capacity-building (TA&CB) to developing countries in the area of trade facilitation - both in the context of the negotiations and in the implementation of the outcomes of the negotiations - should be made immediately operational.

The launch of the trade facilitation negotiations was agreed upon on the basis of such commitment to provide TA&CB and to ensure that such negotiations would promote the development of developing and least-developed countries. The ACP believes that the TA&CB mandate should be made operational by providing support (both financial and technical) to developing countries to assist them during and after the trade facilitation negotiations.

The ACP recalled the proposals presented by the African Group in their submission TN/TF/W/56, dated 22 July 2005, saying that in addition to those raised by the African Group, the ACP Group was proposing some further suggestions on how to operationalise TA&CB in the course of the trade facilitation negotiations.

The ACP countries recommended that an operational inter-agency coordinating mechanism be set up for the provision of TA&CB to developing countries during and after the negotiations to help them design and undertake trade facilitation-related projects or programmes identified as part of their trade facilitation negotiations needs or priorities.

This mechanism should be a trade facilitation TA&CB "one-stop shop" or "single window" facility (to be participated in by bilateral and multilateral donors or agencies with experience in trade facilitation) for the expeditious processing, allocation, and evaluation of funding for TA&CB requests from developing countries in connection with specific projects or programmes in the key areas for trade facilitation TA&CB.

The Group identified three key areas: (1) support for the identification of trade facilitation negotiating needs and priorities of developing and least-developed countries (Paragraph 4, Annex D); (2) support and assistance during the trade facilitation negotiations (Paragraph 5, Annex D); and (3) support and assistance to help developing and least-developed countries implement the commitments resulting from the negotiations, in accordance with their nature and scope (Paragraph 6, Annex D).

In order to efficiently source and allocate TA&CB support for developing countries in the three areas listed above, a special Trade Facilitation Technical Assistance and Capacity-Building Fund needs to be established. This fund shall be managed by the inter-agency coordinating mechanism, and contributions thereto shall be sourced from bilateral and multilateral donors.

The ACP Group also recommended that a report be prepared by the WTO Secretariat on the extent to which the technical assistance aspects of Annex D are being implemented. The report should be submitted to the Negotiating Group as expeditiously as possible, with appropriate operational recommendations on how to improve and enhance the provision of trade facilitation-related TA&CB to ACP and other developing countries.

Also at the meeting, Chile submitted a proposal (TN/TF/W/70) on Articles V, VIII and X of the GATT. On Freedom of Transit, Chile said that the absence of prescribed routes and periods for transit constitutes a barrier to trade. It proposed the establishment by Members of precise routes and periods for transit between an entry and exit point.

There were numerous comments, with most countries saying that the operators should be free to choose the most convenient route, following commercial considerations.

Some members also expressed doubts about the idea proposed by Chile to implement a public register of all administrative costs and transport
charges, and also on other proposals for providing information, which some countries consider too costly.

The Republic of Moldova, in a paper (TN/TF/W/74) submitted jointly with the Kyrgyz Republic, asked for special flexibilities, apart from Technical Assistance and Capacity Building, to be given to small low-income countries in transition. They referred to a paragraph of the Doha Declaration underlining the difficulties faced by "small low-income economies in transition" in their efforts to implement economic and trade policy reforms.

Egypt (in proposal TN/TF/W/75) presented the country's national experience on trade facilitation and its ideas on future needs and priorities.

In the first of two proposals, India (TN/TF/W/77 and TN/TF/W/78) proposed some ideas for improving border clearance procedures relating to GATT Article VIII, on formalities connected with import and export of goods, and also GATT Article X, on publication of information.

India referred to the fact that in a customs union, different member states adopt different border procedures such as standards for border clearance of agricultural and food products. India proposed that members of a customs union should adopt the same border procedures which should include adoption of the same standards for border clearance of agriculture and food products.

In its second proposal, India referred to some particular border control mechanisms for monitoring and ensuring the quality of imported food, which can create unnecessary obstacles to international trade.

Commenting, the US said that the Indian proposals called for very detailed engagement by members. The EC said members should not overload this negotiation with issues that might go beyond its mandate. Other countries such as the Philippines and Bolivia said that they faced difficulties with their exports and the standards applied.

In response to the interventions, India said that this Negotiating Group must address the real problems faced by traders, and that some issues are not completely out of its scope. The issue dealt with standards and administrative procedures at the border, not about the setting of standards, something that clearly would belong to other areas of the WTO.

A group of countries including Armenia, Canada, the European Communities, the Kyrgyz Republic, Mongolia, New Zealand, Paraguay and the Republic of Moldova submitted a proposal (TN/TF/W/79) on shipments in transit.

Presenting the proposal, the EC said that since the Group is moving to more precise work, the paper incorporates the main elements of other proposals for goods in transit. It makes more explicit the elements of SDT for developing countries; specifies ways in which the shipment of goods in transit and the regulations applied don't compromise other aspects of a country legislation; and incorporates the provision for national treatment for these shipments.

The debate about how to establish the route for shipments in transit resurfaced at the meeting, with most countries favouring these routes to be decided by operators. However, Argentina mentioned the need for balance between commercial and national interests. Pakistan said that to leave the issue only to operators is risky. Other countries including Zambia said that the SDT provisions were not enough for LDCs.

On the matter of who has the choice of routes, the EC said it should be the trader, but subject to the fact that any government has the right to apply restrictions if needed. Japan asked to be a co-sponsor of the paper.

Australia, Canada and the US submitted a short paper (TN/TF/W/80) on advance rulings, for discussion at the next meeting.

The Chairperson also announced tentative dates for the Group's next meetings: 5-7 April, 6-7 June and 24-26 July.