trade facilitation, customs valuation and regional ... · wto customs valuation agreement &...

Trade Facilitation and Regional Integration in Selected Pacific Island Countries (Fiji, Papua New Guinea,

Solomon Islands and Tonga)

Associate Professor Biman PrasadThe University of the South Pacific

UNDP/ESCAP ARTNeT Consultative Meeting on Trade Facilitation and Regional Integration

OutlineIntroduction

Brief Background on Trade Facilitation

Literature Review

Methodology

TF in Selected PICs TF initiativesImpact of the TF initiatives on trade, Govt finances and the private sector

TF provisions in Trade Agreements of relevance to the selected PICs

Conclusions and policy recommendations

IntroductionTF & RI: Implications for the WTO negotiations –

focus area for deepening ARTNeT’s work on TF

The no. of regional trade or eco. partnership agreements ↑ed dramatically over the past 5 yrs

These initiatives now go well beyond tariff barriers

Mechanisms developed at the bi-lateral & sub-regional or regional levels may provide insights for the development of a multi-lateral TF system

Need to study how TF issues are addressed in selected PTAs such as PACER

IntroductionBenefits associated with TF in a regional

context can be investigated Issues related to the implementation of the

WTO customs valuation agreement & liberalisation in trade logistics services may also be examined In light of the above comments, the

objectives of this study are to:o Examine the TF initiatives of selected PICs & their

experience in customs valuation reform;

Introductiono Analyse the impact of these initiatives & reforms on trade,

national Govts and the private sectors of the selected countries;

o Discuss how TF issues are addressed in Trade Agreement of relevance to the selected PICs; and

o Conclusions & Policy Recommendations


TF first included in the WTO agenda as one of the Singapore issues at the 1996 WTO Ministerial Conference

A Symposium on TF was held in 1998 to explore the main concerns of traders when moving goods across borders

In November 2001, the Doha Ministerial Conference called for negotiations on TF after the 2003 WTO Ministerial and subject to agreement on the modalities of negotiation

WTO Members formally agreed to launch negotiations on TF in July 2004


Even though TF first included at the 1996 WTO Ministerial Conference, there are several GATT provisions that are related to trade facilitation

Customs Valuation Agreement Agreement on Rules of Origin Agreement on Pre-shipment Inspection Agreement on Import Licensing Procedures Agreement on TBT Agreement on the Application of SPS measures

MethodologyMost of the info on TF sourced from the proceedings of the 8th Annual OCO Conference held in Sigatoka, Fiji, in March this year

Info. on Fiji’s experience with the implementation of the WTO Customs Valuation Agreement sourced from docs obtained from FIRCA

Info. on TF provisions in PACER, PICTA & EPA were obtained from the PIFS website & from the materials that were distributed at the EU Market Access Workshop for the Pacific Region held in Suva, Fiji in May this year, respectively

Literature ReviewSeveral studies done on TF such as:

o A study by Landos (2000) on TF Capacities of Quarantine & Customs Services in the FICs ;

o A 2005 report by the KAV Consult Ltd on Legislative & Regulatory Framework for S&C infrastructure within FICs;

o A study by Moise (2004) on the costs of introducing & implementing TF measures in Chile, Latvia, Morocco & Uganda;

o A study by Matsudaira (2002) on the business benefits of TF in the OECD countries;

o UNESCAP (2002) study on TF measures implemented in Cambodia, China, Lao People’s Democratic Republic, Thailand and Vietnam;

Trade Facilitation in Selected PICs

TF initiatives – Regional EffortIn an attempt to address the challenges facing the FICs on the global scene, the FTM recognized the importance of further developing and improving TF in the FICs in their July 2003 meetingIt was agreed in this meeting that a detailed prog. of TF will be developed and implemented taking into account the specific needs of LDCs and SISIt was also decided that PACER would fund this prog.


The TM outlined that the objective of such a RTFP would be to facilitate the FICs trade through a co-ordinated prog. of technical assistance/capacity building, focusing on service and efficiency in three major TF areas

o Quarantine;o Customs; &o S&CThe time frame for the implementation of the

Customs and Quarantine & the S&C components of the RTFP is 5 and 3 years, respectively


The TFU of the PIFS given the responsibility to co-ordinate and manage all prog. activities, as well as the development, implementation, monitoring and review of the RTFPOCO accountable to the PIFS for providing

information on the implementation status of the RTFP activitiesYear 1 of the RTFP started in September 2005Some of the initiatives that will be implemented

under the RTFP will be as follows:o OCO strengthening;o Automation Processes;o Risk Management;


o Integrity

o Revised Kyoto Convention/Best Practice Principles


o Harmonized Coding System

o WTOVA


o Legislative Updates

o ROO


TF initiatives – National Efforts Fiji – FIRCA has implemented a number of initiatives

over the past few years in order to facilitate trade flows to and from Fiji

o Modernisation of the various legislations;o Harmonisation of the above-mentioned legislations;o Modernisation of its data processing systems;o Review of all FIRCA procedures to identify weak areas and

improve efficiency; ando More training for staff


PNG - The PNG Bureau of Customs and Excise has been moving forward in terms of modernising itself. Some of the initiatives that have been implemented are as follows:

o Commitment to Kyoto Accession by 2008;o Release of the Internal Revenue Collection 2006/2008 Corporate

Plan;o Increase in the permanent staffing level at the International Airport;o Increasing commitments to border security requirements;o Commitment to the introduction of Post Clearance Audit teams;o Improved efforts with regards to inter agency communication and

co-operation;


o Extensive legislative amendments;o Re-invigoration of the Intelligence role within Customs;o Endorsement of a Risk Management Policy;o Improvements to internal communication; ando The signing of a MoU on the exchange of information with

Indonesia

SI - RAMSI instrumental in setting up a CM Prog. designed to improve the effectiveness & efficiency of the SICED within the MoF&T

Initiatives under this prog. include:o Client awareness and self-assessment;o Simplified and appropriate legislation;o Simple, modern and transparent procedures; ando Improved revenue collections based on appropriate controls.


Tonga – TCS instrumental in implementing initiatives that will help facilitate trade to and from Tonga. Some of these initiatives are as follows:

o The intro. of PC Trade;o The restructure of TCS;o The fostering of a working partnership with the MoD; ando The setting up of an Illicit Trade Committee


Likely impact of the TF initiatives on:

Trade – X & M likely to improveGovt. Finances – Govt. rev. & exp. anticipated to ↑Private sector – Invest., output and employ are

expected to rise

Trade Facilitation Provisions In PACER, PICTA & EPA

PACER - the agreement addresses issues regarding TF under Article 9 whereby:

the parties undertake the believe that the development of an appropriate, efficient and transparent framework of TF measures in the Pacific region will enhance the effectiveness and benefits of trade liberalization among Forum members;the parties will establish detailed progrms for the development, establishment and implementation of TF measures;the agreement will assist the integration of FICs into the international economy;the design of TF progrms shall take into account the special needs and resource and capacity constraints of LDCs & SIS


PICTA - Article 18 of the agreement addresses the measures to facilitate trade by underlining that :

the parties shall endeavour to implement measures which will facilitate trade within the Area;the parties shall examine the scope for tacking action to facilitate trade within the Area by harmonizing their laws, regulations and administrative practices;where possible, TF initiatives shall be coordinated with wider regional and international initiatives; andwhere a party believes that harmonization of measures, or their implementation, will facilitate trade or reduce or eliminate distortions of trade, it may notify any other party of its wish to enter into consultations


EPA – The negotiations for this agreement are guided by four principles (in support of the objectives of the agreement) which are:

Instrument for development;Complementing regional integration;Preservation & improvement of the existing Cotonou Agreement; andSpecial and Differential Treatment.

The first principle incorporates the issue of TF by mentioning that:

EPA will address non-tariff and technical barriers to trade, as well as a number of trade-related ‘behind-the-border’ measures (such as trade facilitation, competition, investment, etc.)

Conclusions & Policy Recommendations

This study has detailed the various TF initiatives that have either been implemented lately or are in the process of being implemented both at a regional and national level Also looks at the likely impact of the above-mentioned initiatives and reforms on trade, Govt. finances and the private sector of the selected PICs While a satisfactory level of work has been carried out on TF over the past couple of years and will continue over the next 3-5 yrs, there are areas where more work can be done. These include:


Adopt TF as a key trade and economic development instrument;

Focus on implementing existing measures and developing the next generation of measures to support the emerging new economy;


Undertake additional TF research;

Promote the role of TF in security; and

Coordination of TF activities

Thank You

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