On the occasion of the 6th Session
of the Committee for Trade, Industry and Enterprise Development under the aegis
of the UN Economic Commission for Europe (29-31 May 2002), on 31 May 2002 it
was organized a Round Table on Implementation of Trade Facilitation in
Transition Economies.
One of the presentations was made by H.E. Mr.
Nicolae Ropotean, Executive National SECI coordinator for Romania.
Trade Facilitation within the
WTO
- a possible approach for
transition economies -
Address
by Ambassador Nicolae Ropotean
I want to start my presentation by expressing my gratitude to the UN
Economic Commission for Europe for this commendable initiative and for the
efforts deployed. It is a challenging exercise, but very rewarding.
The first point to make here with regard to trade facilitation from the
standpoint of a transition economy is that economies in transition, due their
unique, sometimes odd, unconceivable features, are a stage whose potential for
change and improvement is watched closely by key players in the trade world.
The World Trade Organization itself recognized at its fourth Ministerial
Conference in Doha last November the need for enhanced technical assistance and
capacity building in the area of expediting the movement, release and clearance
of goods, including goods in transit. Hence, the ministers tasked the Council
for Trade and Goods to identify the trade facilitation needs and priorities of
Members, in particular developing and least-developed countries, including
economies in transition; one might add, in order to start multilateral
negotiations thereon after the next ministerial meeting in Mexico, September
2003.
To my way of thinking, the idea of trade facilitation has come up
because of a plethora of hindering aspects which stop the normal flow of
commodities from one country to another, with all the resulting consequences
for a healthy economic growth and the ability to fulfill WTO trade requirements.
Trade facilitation was thus meant to be the driver or impetus for
correction of the problems encountered by traders.
Economies in transition expect traders to have full knowledge of other
countries’ trade rules and practices in order to take advantage of the trade
benefits granted by Members’ WTO commitments. Full, simple and easily
accessible information is important for SMEs to do business, and for
Governments, a business-friendly design and administration of trade policy
reduces trade conflicts.
For the transition and developing economies, transparency and
predictability in the implementation of trade regulations and procedures are,
finally, an important aid to development.
According to our practical experience, when deciding to
enforce a liberal trade policy and a subsequent trade facilitation framework,
Governments should pursue two major goals:
- first, to make the economy act in accordance with the
multilateral agreed instruments, mechanisms and rules, and
-second, to encourage the development of a competitive
environment, capable to foster the enforcement of market rules.
There are
quite a few risks involved in such an endeavor, no doubt, but we believe risks
should be allocated to entities that are most capable of managing each risk,
are qualified to transform a transition
economy into a market-based economy and have the credentials to ensure
that producers act in a competitive environment. In order to attain such
objective, due emphasis should been given to the WTO core principles, i.e. transparency
of trade policy, national treatment
and most-favoured-nation treatment.
From
a transition standpoint, there is a Decalogue of principles and objectives to
be actively sought out by international trade policy makers when establishing
the rules that will govern a possible framework on trade facilitation:
1) The
aim of a trade facilitation framework should be to the benefit of the
developing and transition economies, by encouraging them to implement the best
practice that will speed up the customs process, reduce costs, improve
collection of revenues and detect illegal transactions.
2) A
WTO framework must provide a clear strategy, based upon the core WTO
principles, and avoid trade distortions.
3) The
framework must provide the necessary tools for assuring a degree of assessment
and enforcement.
4) Developing
countries should be enabled to assess the consequences of the facilitating
measures they are to implement.
5) Because
of their sensitivity, dispute settlement provisions will need special
consideration.
6) The
developing countries will always adopt a lower degree of trade facilitation
compared to developed economies (the known principle of special and
differential treatment, used also in the others WTO Agreements).
7) The
framework should provide for a transitional period of time in favor of the
developing economies and support measures from the developed countries
(technical assistance and capacity building). US, EU and other developed
nations are already doing just that.
8) Trade
facilitation should be negotiated in the formal trade Rounds, possibly in a
package with other WTO agreements (“single undertaking” principle). I think
this is the only “win-win” solution.
9) A
set of obligations of the developed and developing countries should be clearly
drawn up, and a minimum level of trade facilitation to be reached out within,
for example, 10 years of signature of the WTO results of negotiations (the
usual transitional period in the WTO).
10) The
Members should be encouraged to bind their obligations, to define a work program
and a review mechanism to assess the performances, under the aegis of the
Council for Trade in Goods and the support of the WTO Secretariat.
Customs
regulations form the major part of such a framework on trade facilitation. There is no single, precise model
that ca be offered as representing a standard for restructuring customs
regulations and abolishing customs habits, for that matter, in a transition
economy. Each of the countries in transition brings their own particular blend
of political ambitions and economic hopes in the trade arena. An
enforced customs tariff based on the Harmonized System (HS), with all tariff
lines bound under the WTO Agreement, is of a major importance. The Import
Customs Tariff should strengthen its role and importance and should represent
the main instrument of trade policy and protection at the border.
There are also other
aspects of the trade policy which must be taken into consideration when
speaking about trade facilitation: restrictions or quantitative limitations,
trade defence measures (antidumping, countervailing measures, or safeguard
measures), licensing system. When implemented in an unpredictable and
non-transparent manner, they could all generate trade distortions and hamper
the normal trade flows.
Within
the European economic integration, liberalization of trade relations on a
regional level is a preparation for the speeding up of multilateral trade
liberalization and enhances the enforcement of WTO rules. The EU Association
Agreements, as well as the regional free trade agreements, must include
provisions stating the legal prevalence of GATT and WTO rules.
To all these Romania is no
exception. However, the Romanian
case is worth taking if one seeks details about the process of change that has
occurred and the approach of an Eastern European transition economy to the
rules on which a possible WTO framework on trade facilitation might be based.
Romania’s economy and society have
developed from an excessively
centralized system to a market economy, from a totalitarian regime to a
democratic society. The financial and economic crisis as well as political
changes and events which occurred in several parts of the world adversely
affected Romania’s foreign trade and increased the already high social costs of
transition.
On
top of it all, Romanian exports have been directly affected by:
- the disappearance of several
traditional markets;
- the observance of
the UN embargoes on countries having an important weight for Romanian exports
or debts to be reimbursed;
- the intensification
of commercial defence measures as a result of turmoil in international markets.
Meanwhile,
the high degree of export dependence on imports determined the continuous
deterioration of the balance of payments, in addition to the increasing demand
for imported products from the population and industry, as a result of the
country’s liberal trade regime.
Consequently,
Romania has, indeed, enforced one of the most liberal trade policy, in spite of
all these difficult circumstances:
-
no export subsidies were granted;
-
import restrictions were eliminated back
in 1992, while export restrictions were gradually relaxed and finally abolished
as of 1998;
-
no commercial defense action has been
taken on a multilateral level.
As
far as regional integration agreements is concerned, all such agreements
concluded by Romania include provisions according to which trade relations
between partners are governed by the multilateral principles and rules, each
specific provision of these agreements being either a reiteration of those
included in WTO legal texts or even a stronger rule.
Again, regional projects have set out good examples of how the purpose
of trade facilitation can be reached out in practice to the benefit of the
transition economies.
A practical example is the project
Trade and Transport Facilitation Program in Southeast Europe (TTFSE), promoted
in the frame of both the Stability Pact for South Eastern Europe (SPSEE) and
South East Europe Cooperative Initiative (SECI), with the World Bank support.
A joint supervision mission for TTFSE has recently assessed that while
the trade facilitation development component and Customs information system
were well advanced, customs reforms and border crossing facilities were still
lagging behind.
It goes without saying that, in order to improve the implementation of
this project, the Romanian Government is contemplating a host of measures,
among which:
-
a better coordination and
demarcation/division of responsibilities between Customs and Border Police
(review of the relevant legislation), and
-
conclusion of the methodological
framework concerning risk-based selective and targeted verifications, which is
meant to bring about improvement of Customs efficiency.
Other international organizations have an important part to play in
trade facilitation, too. Take, for instance, UNCTAD technical assistance in
this area. ASYCUDA (the Automated System for Customs Data) has been a very
successful trade facilitation project in Romania. The system has been
introduced in over 100 Romanian locations, and is considered suitable as a
model for replication elsewhere assuming the necessary dedication of senior
customs officials and government.
Also, in keeping with the provisions of the Memorandum of Understanding
of the Facilitation of International Road Transport of Goods in the region of
the South East Europe Cooperative Initiative (SECI), PRO Committees in Romania
and in the neighboring countries meet regularly to discuss topics related to
the difficulties and poor performances that disturb the fluidity of traffic at
border crossings. Among the results one may count the abolition of visa for
professional drivers for Italy as of May 1, 2002 and the advanced stage of
introducing the Single Payment Window (One Stop Shop) at pilot sites at a
number of border points.
Last of all, let us ask ourselves what do the traders themselves think
about making the trade facilitation successful? I think this is a question for
the WTO negotiating Round to be answered.
Our role should be to rely on their experiences in the negotiating
process, to take into account their needs and priorities, so as to set up
a multilateral framework on trade
facilitation which will answer their problems and concerns.
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