Trade Facilitation and the WTO? Go figure!
The words “trade facilitation” and “World Trade Organization” normally make people’s eyes glaze over. But if you are an importer, exporter or someone involved in the logistics sector, there is value for you in the latest developments.
It has taken 20 years for the WTO to deliver something concrete but its Trade Facilitation Agreement will change, for the better, the way countries manage inbound and outbound trade crossing their borders. The TFA is a multilateral agreement which came into force on 23 February 2017 after the required two-thirds of the WTO membership (110 countries) ratified it – members including Australia and the USA.
So what does it do? It imposes legally binding obligations on those countries to implement a range of detailed protocols to improve efficiency and reduce the costs of clearance of goods at the border. Some of those protocols include:
- - Publishing, so they are easily accessible by traders, all relevant procedures, duty and tax rates, fees and charges, rules for classification and valuation of products, rules of origin, import/export/transit restrictions or prohibitions, penalties, appeal procedures
- - Providing opportunity for comment by traders on proposed introduction or amendment of trade laws
- - Issuing advance rulings on technical issues affecting individual traders – eg tariff classification and origin of goods
- - Providing avenues of appeal by traders against Customs decisions
- - Limiting the fees and charges for Customs processing to the approximate cost of the services provided
- - Provision of pre-arrival processing of import documentation to expedite release of goods upon arrival
- - Adoption of risk management systems for Customs control so as to avoid arbitrary or unjustifiable discrimination or a disguised restriction on international trade
- - Ensuring that all border agencies – not just Customs (Australian Border Force) but also Agriculture and Water Resources, Biosecurity Australia, Immigration, Office of Transport Security, Environment etc) – cooperate with each other and coordinate their activities to facilitate trade.
Most importantly, all import, export and transit formalities and documentation must:
- - Facilitate the rapid release and clearance of goods, particularly perishable goods
- - Reduce the time and cost of compliance for traders and operators
- - Represent the least trade restrictive measure available, and
- - Not be maintained if no longer required.
These and numerous other provisions of the TFA tilt the scales in favour of traders (by increasing efficiency and reducing costs at the border) and provide a balance to the traditional Customs priorities of revenue collection, compliance and border security. Importantly, as a dedicated and deliberate approach by the multilateral community to support international trade, they also provide a potent counterpoint to the increasingly protectionist rhetoric we hear from various parts of the world.
Will it work? The WTO foresaw that the best way of ensuring that it does, is to involve the private sector in the implementation of the Agreement. Each member country is required to establish a National Committee on Trade Facilitation, typically involving the relevant government agencies involved in border management and representatives of the private sector.
The Australian NCTF was established two years ago and is chaired by the Department of Immigration and Border Protection. It is currently constituted by six government agencies and 13 industry associations representing key areas of the private sector. AmCham Governor, Geoff Short, represents AmCham’s members on the Committee.
The NCTF is charged with ensuring that the Australian Government fully implements the provisions of the TFA – but it is also the primary vehicle for traders and service providers in the logistics industry to raise issues of concern about border management and to help shape Government policy in ways that accommodate and support the interests of those involved in international trade.
The Chamber is keen to play a significant role in the work of the NCTF by advocating for improvements in border management that will benefit its members. If you feel that an issue affecting your business might fit the NCTF agenda, contact the General Manager of the Chamber in your State or call Geoff Short direct on 0411 360 265.
Geoff Short is Managing Director of Tanda International, an AmCham member company that advises Australian & multi-national corporations on international trade issues including customs, quarantine, free trade agreements, export controls, supply chain security and government relations in the Asia-Pacific region. It is a member of the US-based Trusted Trade Alliance.
Geoff is also a member of AmCham’s Trade and Government Committee and Trade Advisory Board.
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