Trade facilitation and WTO

The forthcoming Doha Ministerial Conference has put the debate on WM issues in sharper focus. There has, however, been little discussion on the proposal to have a multilateral agreement on trade facilitation in WTO. There is a thinking in many countries that the benefits of WTO agreements have not been realised to their full potential because the flow of good in international trade is being impeded by archaic and cumbersome border clearance procedures that continue ue to exist in a large number of countries, particularly the developing ones. Such procedures are looked upon as a kind of non-tariff barrier to trade, which add to the transaction cost. The votaries of trade facilitation therefore, have argued that there should be a multilateral agreement on the procedures to be followed for border clearances of goods. A very high degree of use of sophisticated information technology is proposed as a norm for clearance procedures of goods. For instance, there is a proposal to have the traders feed the data for the movement of goods through inter- national borders only once through their computers. This data would be assessed by the customs officers of the exporting country on line, and then they would transmit the same data to the customs officer of the importing country, who would then assess the same for charging the import duty. The proposals also try to put in place Procedures, which involve least intervention for clearance of goods at borders. Instead, customs authorities are expected to control under valuation or other customs fraud through modern methods of customs control like 'risk assessment analysis' and post- clearance audit. Regular importers of' proven track record are proposed to' be given more freedom from customs procedures. They can be 'authorised' by the customs to clear goods on self- assessment basis. Another significant element proposed to be built into the procedures is to set time limits for, assessment and release of goods from customs, and in case of disputes, a time limit for passing the adjudication orders. The benefits to the trade by use of these procedures are undeniable. But the question really is whether this is the only road to a smoother, less cumbersome procedure for international trade. The advocates of this agreement are to large extent developed countries or the more advanced amongst the developing countries. What these countries are essentially seeing is to replicate their existing customs procedures worldwide. No doubt the rigours of change would sought to be mitigated by what in WTO parlance is called 'special and differential treatment. Given the economic situation and development priorities, it is a moot point whether the developing countries can muster enough resources to put the new infrastructure in place or, indeed, whether they should do so. Another concern arises out of the pro- posed setting of time limits for assessments and clearance of goods. Developing countries dependence on customs revenue is still substantial. The kind of risk assessment procedures that a developed country with an aver- age tariff rate of 3 per cent can afford to put in place can be very different from a developing country that has an average tariff rate of 20 per cent and on whose revenues it is crucially dependent. Therefore, there are dangers in putting their systems of customs clearance in a time straitjacket. It may lend assistance not only to the unscrupulous importers but even unscrupulous customs officers who can conveniently shift the blame of not correctly assessing the goods to the WTO's time schedule. A larger question that needs to be addressed is whether WTO ready needs to get to the level of hammering out agreements on procedures. Does the WFO have the resources to expand its area of activity so wide? Will it not affect its efficiency and stretch its resources particularly for its Dispute Settlement Body? No doubt trade facilitation needs to be pursued and kept under constant focus. But much more can be done on our own initiative within our own resources. Then, there is an International Convention on the Simplification and Harmonisation of Customs Procedures, more popularly known as the Kyoto Convention. This is definitely another road to trade facilitation worth exploring before rushing the subject to the WTO.