Bali, 03/12/2013 (Agence Europe) - The 28 EU member states have stated their resolve for an ambitious agreement on trade facilitation, and have put the agricultural issues of the Bali package on the back burner.
During this week of talks on the liberalisation of world trade - which opened in Bali on Tuesday as part of the ninth ministerial conference of the WTO (3-6 December) - European Commissioner for Trade Karel De Gucht, the EU's chief negotiator, will for once be able to carry out his task relatively calmly. The EU Council of trade ministers - which met in Bali on 3 December before the official opening of the WTO conference - rallied behind the Commission, agreeing on a very clear common position: for the 28 EU member states, “a limited number of agricultural issues” can constitute a partial agreement on the Doha Round provided that the general result obtained in Bali, based mainly an “ambitious” agreement on trade facilitation and a development package, is balanced.
An agreement on easing customs procedures in order to facilitate trade flows has for long been the key objective of the Bali meeting. However, the developing countries have linked this to an agreement on a development package - including the issues of special and differentiated treatment and the needs of the least developed countries (LDCs) - and the emerging countries have linked this to certain agricultural points - public stock holdings of food (the G33 proposal led by India), export competition and tariff rate quota administration (G20 proposals, led by Brazil).
On Tuesday, however, the EU ministers agreed that the “main goal” of the conference should be an “ambitious and binding” agreement on trade facilitation which would enable customs procedures to be simplified, would reduce red tape, would help fight corruption and would cut company costs. The ministers also agreed on the need for the conference to close with “significant” results for development and LDCs, “by contributing to strengthening their integration in the multilateral trade system”, the Lithuanian Presidency of the Council stated. At the same time, the ministers acknowledged the challenges to come after the Bali negotiations.
What is involved in trade facilitation? In WTO jargon and that of the trade world, trade facilitation identifies measures aiming to simplify, modernise and harmonise the import of goods, and to improve the collection of tax at borders and export and transit procedures - particularly customs requirements. The possible measures for this include the simplification of rules and the reduction, standardisation and computerisation of the forms. A WTO agreement on facilitation would create an international framework for reforms on this.
Currently, a gap separates developed countries and developing countries with regard to border procedures. On average, OECD countries require five documents at customs and it takes ten days to clear goods - at a cost of around €735 per container. By contrast, African countries need on average twice as many documents, up to 35 days to clear exports and 44 days to clear imports - with average costs of between €1,285 and €1535 per container. The OECD estimates that reducing global trade costs by 1% would increase world income by more than $40 billion, 65% of which would go to developing countries.
Several developing countries have already carried out reforms. For a modest investment of about €2-8 million, the benefits can be huge. According to the OECD's Global Review 2011, customs reform in Cameroon increased revenues by 12%. In Mozambique, where goods now clear customs in two to five days compared to 30 days previously, customs reform increased revenues by 50%. In sub-Saharan Africa, cutting time spent at the border by 5% could achieve a 10% increase in intra-regional trade and significantly reduce revenue losses from inefficient border procedures - revenue losses which can exceed 5% of GDP. Furthermore, the costs of implementing the reforms for trade facilitation are relatively modest, although costs will vary from country to country. The World Bank estimates costs ranging from $3 to $11 million, and the OECD from $3.5 million to $19.7 million.
Sweden sets the example. In Bali on Tuesday, Sweden's Minister for Trade Ewa Björling announced the launch of a new training centre ensuring the promotion of trade facilitation in Tanzania. The Swedish government will give this training centre an initial subsidy of US$ 1.6 million for 2014-2015, which will benefit African countries by focusing particularly on LDCs. It will support the participating countries in the implementation of the future WTO agreement on trade facilitation, it was confirmed this week. (EH/transl.fl)