Capacity Building has become one of the most important subjects in Trade Facilitation, with the recent entry into force of the landmark WTO Trade Facilitation Agreement, commonly known as the TFA. The 8th session of the World Customs Organization’s Capacity Building Committee, WCO CBC, was held on the premises of the WCO from 7-9 March, 2017. Experts from international organisations, national governments, academia and the private sector attended this two-and-a-half-day meeting in Brussels to gain first-hand information on the Capacity Building initiatives of the WCO and its partners, national developments with regard to Trade Facilitation and other related topics. I was happy to take part in this annual event on behalf of Cross-border Research Association. This Blog (part 1 of 2) captures the focal points of the discussion on the first day that consisted of a Joint Session with the 7th Meeting of the WCO Working Group on the WTO TFA.
Following the adoption of the meeting agenda, the keynote address reinforced linkages between Trade Facilitation and Capacity Building. The keynote speaker, the Ambassador of Brazil to the EU, highlighted the importance of the TFA as the first multilateral binding agreement holding enormous development potential with far-reaching consequences for the world economy. Capacity Building is considered the epicentre of Trade Facilitation holding unprecedented potential for developing countries to boost commerce, while integrating into international markets. It has vast implications in terms of cost reduction, economic growth and job creation. It was pointed out that the TFA was negotiated at the WTO, but the first implications will be mostly dealt with in the WCO and national customs administrations. The current challenges and threats, including protectionism and high transaction costs cannot be faced in isolation and a harmonised implementation will provide greater benefits.
The first panel session centred on Stakeholder Engagement in the context of National Committees on Trade Facilitation, NCTFs, and how it can connect border agencies the private sector and other relevant organisations in the implementation of the WTO TFA. It reports on overall achievements and some outcomes related to Stakeholder Engagement since the last session of the TFA Working Group and CBC, in 2016.
Illustrative examples were provided on Colombia and India. Colombia has achieved spectacular results in terms of cost and time savings through a number of regulatory reforms and practical measures adopted over recent years. Examples include harmonising domestic laws; establishing an improved network of Single Windows; setting up a single point of contact for associated problems; coordinating opening hours; conducting joint physical inspections; and introducing elements like systematic operations, Advance Rulings, Authorised Economic Operators, and the redesign of customs channels into the national legal provisions. Efforts are now concentrated on the greater use of non-intrusive technology and the increased use of IT for customs and other procedures. The WCO has provided technical assistance on the pilot phase of the rolling out of non-intrusive technology. Interagency coordination, however, needs considerable strengthening in Colombia.
Experts from India spoke about the structure, design and underlying principles of the NCTF that reflects wide representation, inclusive approach, intra and interagency coordination, and public-private ownership. Adhoc Working Groups have been formed to address specific provisions of the TFA. In the context of agriculture, the NCTF is also engaged in reforming the policy and legislative gaps. The representative from the Federation of Freight Forwarders' Associations in India, FFFAI, underlined the need to address the speed of doing business. India’s ambition to be a leading economic power has placed much attention on the private sector. The Goods and Services Tax to be introduced in India is being designed along the lines of the TFA. Customs brokers will assume a new role in the context of the TFA and are being trained accordingly. Infrastructure development remains a high priority. According to the expert, India has reached a point where the government and the private sector are no more adversaries, but have identified common grounds and forged a common agenda.
The next panel focused on the recent developments with regard to the implementation of the WCO Mercator Programme, the World Bank and WTO’s implementation support, and Donor Coordination. The key objectives of the programme are to achieve uniform implementation of the TFA to provide tailor-made technical assistance and to facilitate effective coordination amongst all stakeholders. To support the harmonised implementation of the TFA by using core WCO instruments and tools, the WCO is now updating its Implementation Guidance, and developing e-learning courses. Post Clearance Audit workshops for Western Balkans were held recently in Serbia. The World Bank expert gave insights on recent activities of its Trade Facilitation Support Program, TFSP, for a number of Asian and African economies. The WTO speaker presented the online TFA Facility platform that was set up to assist member states in the implementation of the TFA. The platform intends to be a one-stop-shop presenting case studies, guides and tools, and aspires to be a central repository for all information, resources and materials.
From the perspective of Donor Coordination, references were made to the WCO’s multi-year projects and national-level collaboration with other development partners. In addition, the Tailor-made Track of the Mercator programme was introduced. The Mercator Tailor-made Track provides the framework under which the WCO’s support takes into consideration the local conditions and environment for implementing Trade Facilitation measures with particular regard for the work of other development partners. The important role of academia as a contributor to TFA implementation was brought to the fore. First, universities should consider including courses specific to the TFA. Second, an attractive win-win situation could be achieved if Masters and PhD students are encouraged to write theses on TFA-related topics identified by the WCO.
The fifth and final session of the day was dedicated to understanding the Mercator operating modalities, including the proposed new operating model and delivery management of TFA-related requests. The Director of the Mercator Programme introduced the three pillars of the programme’s Operating Model, namely the harmonised implementation of WCO’s global standards; the tailor-made technical assistance and capacity building efforts; and effective stakeholder coordination. The dual-track method comprising the Overall and Tailor-made Tracks of Mercator culminate in a coherent, pragmatic and result oriented approach. The Overall Track provides for high-level donor coordination, ensures that the key development partners are well-represented at WCO meetings, and underpins the importance of harmonised working methods. The Tailor-made Track encompasses four key elements: country level engagements, monitoring, donor engagement, and the accreditation of experts. The support mechanism consists of four steps: Mercator programme advisory functions; implementation validation; monitoring and evaluation; and planning and delivery. This discourse was buttressed by real-life examples from other panel members. The representative from the National Revenue Authority of Sierra Leone shared lessons and experiences on the gradual unfolding of the programme in the country. The diagnostic report and implementation proposal has been signed off and a focused yet flexible approach has been developed. Results based plan and outlook, needs based sequence of activities, effective coordination and duplication avoidance, and sound risk management are some of the underlying principles of the national plan. The expected outcomes of these efforts are achieving close alignment with the TFA policies, establishing Standard Operating Procedures through the use of WCO Tools and instruments, embedding a culture of continuous learning and improvement, and establishing a dynamic operational environment.
Both Uganda and Afghanistan demonstrate important progress in implementing the respective national action plans. The strategic interventions through Mercator have resulted in a series of customs legal reforms to bring the TFA in clear perspective. Examples of other concrete achievements include the establishment of a new training facility called the Afghanistan Customs and Tax Academy and the establishment of a strong collaboration mechanism between the Uganda Revenue Authority and the Afghanistan Customs Department. The knowledge sharing on the WCO tools and instruments between the two countries has been instrumental in facilitating trade, especially in the case of Uganda.
The lively dialogue and exchange of opinions call attention to the new political momentum for streamlining global trade and unleashing the economic potential of developing countries. It was generally acknowledged that global efforts should not be confined solely to the TFA, but may go beyond its scope in pursuit of economic growth and increased prosperity. While the WCO is in a privileged position to act as a broker between donor and beneficiary and provides the necessary technical expertise, it is for the beneficiary to take ownership of the implementation of the TFA in a transparent, holistic and future oriented manner.
Mercator Programme: Building Networks, Partnerships and Economies
Part 1 of 2 of the CBRA “WCO CBC”-Blog, by Dr. Sangeeta Mohanty.