Trade Facilitation

Doha Development Round

Although member nations were scheduled to begin negotiating commitments on trade facilitation for the first time ever at the Cancun Ministerial Conference, the talks ended prematurely in part due to a stalemate over whether to initiate negotiations on trade facilitation and the other three Singapore issues. Should members agree to begin talks on trade facilitation at another point in the Doha round, they will focus on the simplification and transparency of cross-border transportation of goods. Members have suggested a two-track approach to negotiations in which nations will work toward implementing current standards and requirements while creating the next generation of facilitation measures applicable to e-commerce and global corporations.

Background

Trade facilitation came rushing to the foreground of WTO issues as the international business community increasingly expressed concern for greater transparency, efficiency, and procedural uniformity of cross-border transportation of goods. According to an APEC study, clearing the red tape at country borders would generate approximately twice as much gain to GDP than tariff liberalization would. [1] Trade facilitation measures would particularly benefit developing countries, where the inefficiencies are sometimes more costly to industries than are tariff barriers. In response, WTO members added trade facilitation to the agenda at the Singapore Ministerial Meeting in 1996. The Singapore Ministerial Declaration calls upon the Council for Trade in Goods (CTG) to conduct exploratory research into cross-border barriers, and analyze the effects of those barriers on traders and consumers.

The CTG research draws from the work of over fifteen intergovernmental organizations and the responses of the international business community at the WTO Trade Facilitation Symposium in March 1998. Based on the discussion at the Symposium, the WTO Secretariat circulated a Checklist of Issues that summarizes central issues and prescribes possible solutions to prevalent problems. The points of concern can be categorized into five broad areas: documentation requirements; official procedures; automation and use of information technology; transparency and consistency; and modernization of border-crossing administration.

From the inception of trade facilitation as a separate issue, the WTO has engaged in extensive preparatory work on relevant issues. In 1999, the CTG held four informal meetings to discuss specific topics that had not been covered in the more formal forums held in 1998. The CTG focused on import and export procedures, insurance and financial requirements, electronic facilities, and evaluation of applicable WTO rules. At the Seattle Ministerial Meeting in 2000, the WTO created a capacity building program and discussed the dual need to implement current standards as well as develop new methods of facilitating trade.

Developing Countries

While there is across-the-board agreement on the necessity for trade facilitation, developing countries are not enthusiastic to negotiate a multilateral agreement of trade facilitation commitments.[2] They argue that they do not have the resources necessary to update their customs procedures to more modern technological standards. They are also reluctant to take on additional legal obligations that may increase their exposure to disputes. If members insist on creating standards through the WTO, developing countries such as Brazil, Jamaica, and Zimbabwe ask that the agreement be a list of voluntary guidelines, or an agreement focused on capacity-building, rather than a legally-binding, rules-based agreement.[3] Some developing countries such as India even suggest that trade facilitation remain a nation, bilateral, or regional concern.

Taking into consideration the qualms of developing countries, the WTO will offer significant technical assistance and capacity building in conjunction with negotiations. A Workshop on Technical Assistance and Capacity Building on Trade Facilitation held in May 2001 specifically discussed the needs of developing countries, the existing programs of support, and the efficacy of capacity building methods. The workshop brought together intergovernmental organizations, donor, and recipient countries in a dialogue that will continue throughout the Doha round. Judging from comments made by the USTR Robert Zoellick, the US and other developed countries will continue to push hard to include trade facilitation on the agenda.[4] However, if developing countries continue to oppose negotiations, developed nations may need to shelve the issue in order to keep the Doha round on track.

[1] Asia Pacific Foundation of Canada Publications Listing.

[2]"The WTO, Trade Facilitation and Sustainable Development," IISD Trade and Development Brief, No. 3, Spring 2003.

[3] Martin Kohr, "Developing countries against binding trade facilitation rules," June 2003.

[4] "Reviving the WTO talks," The Straits (Singapore), January 16, 2004.