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Trade facilitation gap unbridgeable – WTO director-general

15th August 2014

By: Callie Lombard

  

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On July 31, World Trade Organisation (WTO) director-general Roberto Azevêdo reported to the WTO ambassadors that, despite intensive consultations, “we have not been able to find a solution that would allow us to bridge the gap on the adoption of the protocol on the trade facilitation agreement (TFA)”.

He spelt out what he believes the remaining unbridgeable gaps were. On the one side, there were those members who had the firm conviction, shared by many, that the decisions that Ministers had reached in Bali, Indonesia, could not be changed or amended in any way and that those decisions had to be fully respected. On the other side, there were those members who believed that the decisions left unresolved concerns that needed to be addressed in ways that, in the view of others, would change the balance of what was agreed in Bali. The WTO had not been able to find a solution that would allow it to bridge the gap.

According to Azevêdo, the WTO had tried everything it could, but this had not proved possible. The fact the WTO did not reach a conclusion means that it is entering a new phase in its work – a phase which strikes Azevêdo as being full of uncertainties.

Azevêdo urged members to seriously and carefully reflect on the state of affairs and to consider what the next steps might be. He indicated that members would have to determine the consequences of the events of July 31. He urged members to engage in discussion at the highest level to determine their position to be able to discuss the way forward on the disputed issues when members met again in September. The future of the multilateral trading system is now in its members’ hands. As a parting comment, Azevêdo reminded members that July 31 was not a WTO deadline, but a Bali deadline decided by Ministers.

Reasons to Save the TFA
On July 29, the International Chamber of Commerce (ICC) called on WTO members to fully support the TFA, whose first deadline for implementation was July 31.

In its correspondence to over 100 Trade Ministers worldwide, the ICC essentially offered six reasons to save the TFA:

To stimulate the global economy. The WTO’s TFA has the potential to deliver a massive stimulus to the world economy – estimated at a possible $1-trillion boost over time to global gross domestic product.

To generate jobs, especially in developing countries. The deal has the potential to generate as many as 21-million jobs, 18-million of which would be in developing economies.

To improve cross-border small and medium-sized enterprises (SME) sales. Trade facilitation reforms will enable many companies to trade internationally for the first time, with improved border and customs measures potentially triggering a 60% to 80% increase in cross-border SME sales in some countries.

To reduce transaction costs and the prices of essential goods. Implementing the TFA will significantly reduce transaction costs in global supply chains – in turn, reducing the price of many essential goods.

•To prevent food wastage. The TFA includes smart provisions to ensure that perishable goods do not get stuck at borders, an all-too-common problem that contributes to food wastage in some economies. These reforms are vital to support many of the world’s poorest.

To pave the way for other landmark reforms. Implementation of the TFA is an essential first step towards concluding the WTO’s Doha round of trade talks. Other multilateral agreements on important issues such as agricultural reform will be in jeopardy if this landmark deal fails.

ATA Carnets
According to the ICC, there are seven reasons why ATA Carnets are the best way to unlock customs. Jointly administered by the World Customs Organisation (WCO) and the ICC World Chambers Federation, the ATA (Admission Temporaire/Temporary Admission) Carnet (pronounced kar-nay) is an international customs document that permits the customs-duty-free and tax-free temporary export and import of goods.

But why are ATA Carnets the best way to facilitate international trade and allow companies to reach new markets for their products? Firstly, they facilitate easy exit and easy re-entry. If a business requires that goods be moved abroad temporarily, ATA Carnets are the simplest tools to use when entering and leaving a country. Secondly, ATA Carnets cover three comprehensive categories of products: commercial samples, professional equipment and goods for exhibitions and fairs. Whether ordinary or extraordinary, if they are not perishable or consumable, a wide range of items can be covered by an ATA Carnet. Thirdly, ATA Carnets eliminate value-added tax and customs duties at the time of each border crossing. Fourthly, ATA Carnets simplify customs border crossings and cut red tape by allowing importers and exporters to use a single document for all customs formalities. The fifth reason why ATA Carnets should be used to facilitate international trade is that they are easy to obtain and use. Further, they can be used for several operations for up to one year. Finally, ATA Carnets are recognised internationally, having been accepted in 74 countries and territories worldwide, with more countries to join in the future.

Further information on ATA Carnets can be obtained from Glennalee Hayselden or Samuel Mothibeli, of the Carnet Department of the South Africa Chamber of Commerce and Industry, at ata@sacci.org.za.

Iron/Steel Tariff Application
Comment is due by August 15 with respect to the proposed increase in the ‘general’ rate of customs duty on wire of iron or nonalloy steel, plated or coated with zinc, classifiable under tariff subheading 7217.20, from free of duty to 10% ad valorem; barbed wire of iron or steel, twisted hoop or single flat wire, barbed or not, and loosely twisted double wire, of a kind used for fencing, of iron or steel, classifiable under tariff subheading 7313.00, from 5% ad valorem to 15% ad valorem; other grill, netting and fencing, welded at the intersection, plated or coated with zinc, classifiable under tariff subheading 7314.31, from 5% ad valorem to 15% ad valorem; and other cloth, grill, netting and fencing: plated or coated with zinc, classifiable under tariff subheading 7314.41, from 5% ad valorem to 15% ad valorem.

Lead Acid Tariff Application
Comment is due by August 15 with respect to the proposed increase in the ‘general’ rate of customs duty on lead-acid batteries of a kind used for starting piston engines, classifiable under tariff subheading 8507.10, from 5% to 30% ad valorem.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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