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Smes and the WTO TRADE FACILITATION AGREEMENT a TRAINING MANUAL

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Smes and the WTO TRADE FACILITATION AGREEMENT a TRAINING MANUAL SMES AND THE WTO TRADE FACILITATION AGREEMENT A TRAINING MANUAL In collaboration with © International Trade Centre 2015 The International Trade Centre (ITC) is the joint agency of the World Trade Organization and the United Nations. Street address: ITC 54-56, rue de Montbrillant 1202 Geneva, Switzerland Postal address: ITC Palais des Nations 1211 Geneva 10, Switzerland Telephone: +41-22 730 0111 Fax: +41-22 733 4439 E-mail: [email protected] Internet: http://www.intracen.org SMEs AND THE WTO TRADE FACILITATION AGREEMENT A TRAINING MANUAL SMEs AND THE WTO TRADE FACILITATION AGREEMENT Abstract for trade information services ID=43167 2015 F-09.07 SME International Trade Centre (ITC) SMEs and the WTO Trade Facilitation Agreement: A Training Manual. Geneva: ITC, 2015. xii, 132 pages (Technical paper) Doc. No. TFPB-15-343.E The training manual on the World Trade Organization Agreement on Trade Facilitation explains each of the measures of the Agreement, including the key elements of the measure, the intended benefits from a business perspective, an outline of the practical steps that businesses might take in order to take advantage of the measure and practical exercises and proposed questions for group discussion. It aims to assist the business community better understand the technical measures of this multilateral Agreement and the opportunities it offers to importers, and exporters in reducing delays and costs in moving goods and services across borders. Descriptors: Trade Facilitation, WTO, SMEs, Developing Countries, Manuals For further information on this technical paper, contact Mohammad Saeed ([email protected]) English The International Trade Centre (ITC) is the joint agency of the World Trade Organization and the United Nations. ITC, Palais des Nations, 1211 Geneva 10, Switzerland (www.intracen.org) Digital image(s) on the cover: © iStockphoto © International Trade Centre 2015 ITC encourages the reprinting and translation of its publications to achieve wider dissemination. Short extracts of this technical paper may be freely reproduced, with due acknowledgement of the source. Permission should be requested for more extensive reproduction or translation. A copy of the reprinted or translated material should be sent to ITC. ii TFPB-15-343.E SMEs AND THE WTO TRADE FACILITATION AGREEMENT Foreword The World Trade Organization (WTO) Agreement on Trade Facilitation is an important tool for economies to improve their business environment. Easing the cost, time and process of doing business and trading is no longer just a policy choice. It is fundamental to increasing the competitiveness of an economy and attracting investment. For businesses, especially for small and medium sized enterprises (SMEs), operationalizing the Agreement on Trade Facilitation is a path to internationalization, which will allow them to access international value chains at lower cost and at greater speeds. Concluded by WTO members in December 2013, the Agreement promises greater efficiency by targeting administrative barriers to trade – unnecessary border inspections, excessive document and data requirements, manual processes, lack of coordination among border authorities and complex and inefficient rules and procedures. All of these issues delay the movement of goods and services and increase trade costs, which are often passed to consumers. Trade transaction costs are highest in the world’s poorest countries, which are the least able to carry this additional burden. For instance, the average cost to move a container across the border is 43% higher in Least developed countries (LDCs) than in other developing countries. These costs affect SMEs the most as theyoften lack the means and capacity to comply with complex rules. The high compliance costs with customs and border procedures and other non-tariff measures (NTMs) represent significant charges relative to their smaller volumes of trade. This makes them uncompetitive as suppliers and hampers their integration into regional and international value chains. SMEs can benefit from the Agreement by having a sound understanding of how the new procedures and requirements will complement their business prioirties. Like other WTO agreements, the degree to which the intended benefits of the Trade Facilitation Agreement can be actually realized will depend upon how it is implemented in national law and practice. While implementation is the primary responsibility of the WTO members, businesses play a critical role in the consultative process to advise authorities as to how the Agreement is best applied in the national environment. The International Trade Centre (ITC) developed this manual to assist businesses to understand the terms, potential benefits and practical use of each of the technical measures of the new Agreement, as well as to suggest potential implementation choices. ITC will continue working with SMEs in developing countries and LDCs to increase their knowledge of the new rules and the benefits available to them. In line with the importance of cooperation among institutions, this publication was produced by ITC, in collaboration with the United Nations Conference on Trade and Development (UNCTAD), the United Nations Economic Commission for Europe (UNECE) and International Chamber of Commerce (ICC). This is an example of the United Nations’ system delivering as one in collaboration with the private sector. Arancha González Executive Director International Trade Centre TFPB-15-343.E iii SMEs AND THE WTO TRADE FACILITATION AGREEMENT iv TFPB-15-343.E SMEs AND THE WTO TRADE FACILITATION AGREEMENT Acknowledgements The idea of publishing a training manual for SMEs on the WTO Trade Facilitation Agreement was demand driven and conceived during interactions with private sector representatives in over 30 countries where ITC provided technical assistance in the area of trade facilitation. Brian J. O’Shea, an independent consultant with over 15 years of experience in trade facilitation reforms in developing and least-developed countries, contributed to the publication of this manual. He acknowledges the support he received through consultations with other experts in the field of trade facilitation, particularly Sheri Rosenow at the WTO Secretariat, who gave valuable advice and help through discussions on the negotiation and text of the Trade Facilitation Agreement. Rajesh Aggarwal, Chief, Trade Facilitation and Policy for Business Section and Mohammad Saeed, Senior Trade Facilitation Adviser, provided the guidelines and structure for the manual and supervised the writing with Qasim Chaudry, Consultant, Trade Facilitation and Policy for Business, acting as coordinator at ITC. Special thanks to Marilyn Hubble, ITC consultant, for editing support, and to the ITC publications team, particularly Natalie Domeisen, Evelyn Seltier and Mixtli de la Peña Gimenez, for quality control and production management. We also thank Serge Adeagbo and Franco Iacovino for providing graphic and printing support. TFPB-15-343.E v SMEs AND THE WTO TRADE FACILITATION AGREEMENT vi TFPB-15-343.E SMEs AND THE WTO TRADE FACILITATION AGREEMENT Contents Foreword iii Acknowledgements v Abbreviations xi Introduction 1 Chapter 1 Scope and purposes of the Agreement 3 1. What is trade facilitation? 3 2. Structure of the Trade Facilitation Agreement 4 3. National Trade Facilitation Committee 6 4. Role of the private sector 7 Chapter 2 Better access to trade information 9 1. Publication 9 2. Information available through the Internet 12 3. Enquiry points 15 4. Consultation 19 5. Business participation in development of laws, regulations, formalities and documentation requirements 23 6. Information before entry into force 30 7. Advance rulings 33 Chapter 3 Faster, simpler and cheaper border clearance 41 1. Pre-arrival processing 41 2. Separation of release from final determination of customs duties, taxes, fees and charges 45 3. Additional facilitation for authorized operators 49 4. Single window 56 5. Disciplines on fees and charges 61 6. Use of copies of supporting documents for faster processing 64 7. Offering the option of electronic payment 68 8. Limits on mandatory use of customs brokers 70 9. Rapid release of express consignments 72 TFPB-15-343.E vii SMEs AND THE WTO TRADE FACILITATION AGREEMENT Chapter 4 Fairness in resolving customs disputes 77 1. Right to appeal or review 77 2. Customs penalty disciplines 84 Chapter 5 Duty free import procedures 91 1. Freedom of transit 91 2. Movement of goods under customs control intended for import 96 3. Customs ‘suspense’ procedures 99 Chapter 6 Measures available in defense of your goods 105 1. Requesting opportunity for a second test 105 2. Prompt notice of detention of goods for inspection 110 3. Handling and release of perishable goods 112 4. Option to return rejected goods 117 5. Food and animal feed ‘import alert’ systems 120 Chapter 7 Customs and border agency control and administration 125 1. Risk management 125 2. Use of customs post clearance audit 126 3. Establishment and publication of average release times 126 4. Border agency cooperation 126 5. Common border procedures and uniform documentation requirements 128 6. Mechanism for customs cooperation (exchange of information) 128 7. Use of international standards 129 8. Limitation on use of pre-shipment inspection 129 WTO Trade Facilitation Agreement (TFA) article reference sheet 131 viii TFPB-15-343.E SMEs AND THE WTO TRADE FACILITATION AGREEMENT Figures Figure 1. Moldova customs call center 16 Figure 2. Regulatory impact analysis (video)
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