Trade facilitation

1. Background

As customs barriers are dismantled, other barriers to trade gain greater relative importance. The international movement of goods is subject to authorities’ import and export regulations, and it can be difficult for businesses to keep up to date with changing customs procedures and the formal routines that have to be followed when goods cross borders. Such administrative barriers occasion significant costs in the international goods trade. Given today’s lower tariff levels, the administrative costs associated with the requirements imposed by authorities often constitute a greater amount than the tariffs themselves. Reduced transaction costs and the simplification of border control procedures are thus of great practical and economic significance, in both rich and poor countries.

The effort to simplify and facilitate international trade in goods, referred to as “trade facilitation” in the WTO context, can bring significant socioeconomic gains. Studies show that trade facilitation could generate social benefits in the form of an increase of up to 0.25 per cent of GDP – much more than one could expect to achieve by removing tariffs. It is worth noting that trade facilitation measures will also help to prevent irregularities and corruption, thereby securing states’ tariff incomes. This is important, not least for developing countries.

The 1996 Singapore Ministerial Conference instructed the WTO Council for Trade in Goods to investigate the opportunities for simplifying trade procedures, with the aim of eventually introducing new WTO rules in this area. The negotiations on trade facilitation, the mandate for which is found in paragraph 27 of the Doha Ministerial Declaration and the July 2004 framework (Annex D), were, however, only begun in August 2004. According to the mandate, the negotiations’ aim is to “clarify and improve” relevant aspects of Articles V, VIII and X of the General Agreement on Tariffs and Trade (GATT), with the intention of “expediting the movement, release and clearance of goods, including goods in transit”.

The trade facilitation negotiations also aim at “enhancing technical assistance and support for capacity building in this area” in developing countries. Capacity building is to be facilitated both during the negotiations and once they have been completed. This support is intended particularly to help the least-developed countries. Further, the mandate provides that the negotiations should aim at rules on “effective cooperation between customs authorities on trade facilitation and customs compliance issues”. Finally, the results of the negotiations are to take full account of the principle of “special and differential treatment for developing and least-developed countries”.

2. Status of the negotiations

Over 100 working documents have been submitted, with a large number of suggestions on the expansion and detail of the GATT provisions discussed above. In addition, there is a series of proposals on the practical implementation of the mandate’s aims on technical assistance and capacity building in developing countries. The status of the negotiations as at December 2005 is summarised in the Negotiating Group on Trade Facilitation’s report to the Hong Kong Ministerial Conference, which is incorporated as Annex E of the Hong Kong Ministerial Declaration (see paragraph 33).The Negotiating Group is now working on the concretisation of the present proposals, with the intention of producing draft agreements.

3. Norway’s position

Norway has been active in the Negotiating Group, and has put forward several proposals. Together with Switzerland and New Zealand, Norway has submitted two working documents on fees and formalities in connection with importation and exportation (see Working Documents TN/TF/W/36 and TN/TF/W/67) and a working document on the use of international standards (see Working Document T/TF/W/85 submitted by Chile, South Korea, Norway and Switzerland). Norway has also submitted its own experience paper on customs cooperation with its Nordic neighbours (see Working Document TN/TF/W/48, Border Agency Cooperation - Customs Border Cooperation between Norway, Sweden and Finland).

Achieving a multilateral agreement on the simplification of trade procedures, thereby ensuring that cross-border trade can be carried on more effectively and easily, and with reduced transaction costs, will be of great value to Norwegian businesses. Norway therefore has offensive interests linked to the negotiations on trade facilitation.

Norway is also considering various proposals on trade-related development assistance, in keeping with the negotiation mandate’s provisions on technical assistance and capacity building in developing countries. Trade-related development assistance aimed at trade facilitation should be cost-effective and, moreover, channelled to the countries with the greatest need.