Archives For Economic

Reality Check

The ongoing global financial and economic crisis affects governments,  organisations and citizens in different ways. It would seem that no individual or any organisation has the proverbial ‘silver bullet’ to normalise the situation either. Today, probably most Customs and Border agencies are undergoing ‘modernisation’ or some form of restructuring. Modernisation in itself implies automation or digitization of information changing the lives of the average customs (border) official as well as the expectations and predictability of service to traders and trade intermediaries around the world. 9/11 forever changed the role of Customs and for most of governments, border regulatory authorities as well. Changes in Customs have since been focussed on alignment to policy, standards and guidelines as advocated by the WCO.

WCO Startegic PlanNational adoption of these remains the foremost critical step in establishing a country’s ability to ‘connect’ with the world. A national administration should seek inclusivity of its trading community lest its modernisation be regarded as self-serving. Simultaneously, regional economic communities also seek radical change, albeit on a regionalisation level. Pressures on national (sovereign) nations develop given high-level political commitment to regionalisation, often without taking into account their respective countries’ state of readiness. This creates a false sense of commitment which results in regional failures. Behind such regional initiatives are normally a host of sponsors, purportedly with the right experts and solutions to rectify the ‘barriers’ which prevent a national state from integrating with its neighbours and global partners. Sound familiar? If so, it wouldn’t do national representatives any harm to refresh themselves with the under mentioned WCO tools and validate this in relation to the direction which their organisation is headed. These form part of the WCO’s Customs’ in the 21st Century Agenda. It is also recommended reading for the various regional economic communities (RECs) – here I refer to the African continent – who are not always au fait or fully appraised on the ‘readiness’ landscape of the member states they represent.

The Economic Competitiveness Package (ECP) (Click the hyperlink for more information) is currently a matter of high priority at the World Customs Organization (WCO). Economic competitiveness starts with trade facilitation and Customs administrations undeniably play an important role in this respect. Indeed, facilitating trade is one of the WCO’s key objectives and the Organization has contributed, through its tools and instruments as well as through technical assistance, to increasing the economic competitiveness and growth of Members.

The Revenue Package (RP) (Click the hyperlink for more information) was developed by the World Customs Organization (WCO) in response to WCO Members’ concerns in regard to falling revenue returns in the light of the global financial crisis and declining duty rates.

Significant progress has been made since the adoption of the WCO Capacity Building Strategy in 2003. However, new and emerging key strategic drivers impact on international trade and the roles and responsibilities of Customs administrations. This requires that all our capacity building efforts remain responsive and needs-driven to ensure beneficiary Customs administrations can obtain the support they need to pursue their reform and modernization. This Organisational Development Package (ODP) (Click the hyperlink for more information) outlines the basic approach of the WCO towards organizational development. It provides a simple and accessible overview of the texts, tools and instruments that relate to this topic. It refers and offers access to these resources but does not purport to capture all knowledge and practices within this extensive area.

The Compliance and Enforcement Package (CEP) (Click the hyperlink for more information) has been developed in order to assist Members to address the high-risk areas for Customs enforcement. The Customs in the 21st Century Strategy calls on Customs administrations to implement modern working methods and techniques. In this context, Customs should be equipped with the necessary tools that allow it to effectively manage supply chain risks and enforce laws and regulations in cases of non-compliance. In discharging this mandate, the WCO, in close co-operation with Members, has created an extensive library of instruments, tools, guidance materials and operational co-ordination activities to support Customs compliance and enforcement actions. These tools new form part of the CEP.

 

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Researchers and students of international trade patterns and economics will find a useful resource in the following link. Information is made available across databases, annual publications as well as interactive statistics and maps. Please take note of the copyright.

WTO Statistics

This year’s World Trade Report ventures beyond tariffs to examine other policy measures that can affect trade. As tariffs have fallen in the years since the birth of the General Agreement on Tariffs and Trade (GATT) in 1948, attention has progressively shifted towards non-tariff measures (NTMs). The range of NTMs is vast, complex, driven by multiple policy motives, and ever-changing. Public policy objectives underlying NTMs have evolved. The drivers of change are many, including greater inter-dependency in a globalizing world, increased social awareness, and growing concerns regarding health, safety, and environmental quality. Many of these factors call for a deepening of integration, wresting attention away from more traditional and shallower forms of cooperation. Trade in services is a part of this development and has come under greater scrutiny, along with the policies that influence services trade.

So what does the report contain? Click here to download the report!

  • Section A of the Report presents an overview of the history of non-tariff measures in the GATT/WTO. This overview discusses how motivations for using NTMs have evolved, complicating this area of trade policy but not changing the core challenge of managing the relationship between public policy and trading opportunities.
  • Section B examines the reasons why governments use NTMs and services measures and the extent to which public policy interventions may also distort international trade. The phenomenon of off-shoring and the cross-effects of services measures on goods trade are also considered. The section analyses choices among alternative policy instruments from a theoretical and empirical perspective. Finally, case studies are presented on the use of NTMs in particular contexts.These include the recent financial crisis, climate change policy and food safety concerns. The case studies consider how far measures adopted may pose a challenge for international trade.
  • Section C of the Report surveys available sources of information on NTMs and services measures and evaluates their relative strengths and weaknesses. It uses this information to establish a number of “stylized facts”, first about NTMs (TBT/SPS measures in particular) and then about services measures.
  • Section D discusses the magnitude and the trade effects of NTMs and services measures in general, before focusing on TBT/SPS measures and domestic regulation in services. It also examines how regulatory harmonization and/or mutual recognition of standards help to reduce the trade-hindering effects of the diversity of TBT and SPS measures and domestic regulation in services.
  • Section E looks at international cooperation on NTMs and services measures. The first part reviews the economic rationale for such cooperation and discusses the efficient design of rules on NTMs in a trade agreement. The second part looks at how cooperation has occurred on TBT/SPS measures and services regulation in the multilateral trading system, and within other international forums and institutions. The third part of the section deals with the legal analysis of the treatment of NTMs in the GATT/WTO dispute system and interpretations of the rules that have emerged in recent international trade disputes. The section concludes with a discussion of outstanding challenges and key policy implications of the Report. Source: World Trade Organisation.
Related articles

UNECE-Trade Facilitation Implementation GuideHaving spent the better part of the last fortnight amongst customs authorities and implementors of Single Window, I’m compelled to share with you a site (if you have not already been there) which attempts in a simple but comprehensive way to articulate the concept and principles of Trade Facilitation and its relationship and connotation with Single Window. The UNECE Trade Facilitation Implementation Guide should come as a welcomed resource, if not a companion, to trade facilitation practitioners and more specifically Customs Authorities wishing to embark on a trade facilitation approach. Of course it is a very useful reference for the many avid scholars on customs and trade matters across the global village. Of particular interest are the case studies – two of which feature African countries (Mozambique and Senegal) – providing a welcomed introduction of trade facilitation and Single Window on our continent. It is good to note that Single Window has less to do with technology and more to do with inter-governmental and trade relationships and an understanding of how these are meant to co-exist and support one another  – Enjoy!

Trade facilitation is emerging as an important factor for international trade and the economic development of countries. This is due to its impact on competitiveness and market integration and its increasing importance in attracting direct foreign investments. Over the last decade, it has gained prominence in the international political agenda as part of the ongoing WTO multilateral trade negotiations as well as of wide international technical assistance programs for developing and transition economies.

The primary goal of trade facilitation is to help make trade across borders faster and cheaper, whilst ensuring its safety and security. In terms of focus, it is about formalities, procedures, and the related exchange of information and documents between the various partners in the supply chain. For UNECE and its UN Centre for Trade Facilitation and Electronic Business (UN/CEFACT), trade facilitation is “the simplification, standardization and harmonization of procedures and associated information flows required to move goods from seller to buyer and to make payment”. Such a definition implies that not only the physical movement of goods is important in a supply chain, but also the associated information flows. It also encompasses all governmental agencies that intervene in the transit of goods, and the various commercial entities that conduct business and move the goods. This is in line with discussions on trade facilitation currently ongoing at the WTO. Source: UNECE