WCO discusses benefits and challenges relating to free trade zones at The Economist's Asian Trade Summit

01 March 2019

At the invitation of The Economist, WCO Secretary General Kunio Mikuriya addressed participants at the Asian Trade Summit, held in Hong Kong (China) on 28 February 2019, on the WCO’s work relating to free trade zone (FTZ) management.

Dr. Mikuriya told the audience attending a panel discussion on this topic how the expansion of FTZs over the past 50 years had been seen as a policy tool for economic development. He then highlighted the fact that while incentives such as tax benefits and relaxed regulations attracted legitimate trade, they were also often susceptible to exploitation and misuse. 

He stressed that Customs administrations’ points of view should be taken into consideration when establishing FTZs and that Customs should be empowered to implement effective controls to prevent the exploitation of such zones for illicit purposes. 

In this connection, he underscored the importance of establishing strong partnerships with business, including through the Authorized Economic Operator (AEO) concept, of receiving advance information from traders, and of using modern technologies to mitigate risks while facilitating legal trade flows. 

Dr. Mikuriya’s co-panellist, Ms. Sally Peng, Asia-Pacific Practice Group Leader with Sandler, Travis & Rosenberg, P.A., emphasized the critical role played by FTZs in Asia's trade expansion as well as the importance of ensuring compliance within these zones. She also recognized the value of the work done by the WCO in reviewing practices and standards related to FTZs, in developing and assisting with the implementation of concepts such as AEO, and in promoting paperless trade. 

Moreover, both panellists highlighted the potential of blockchain technology for increasing transparency in trade. 

Dr. Mikuriya brought his intervention to a close by stating that Customs administrations around the world were ready to engage in dialogue with policy-makers, authorities supervising FTZs and operators located in those zones.