The Secretariat was invited to the WTO Trade Facilitation Negotiating Group (TFNG) meeting of 30 April and 1 May 2007, in Geneva. The meeting was well attended by more than 150 participants; I recognized Customs presence in several delegations (for examples: Australia, Canada, China, EC, Indonesia, Japan, Korea, Kuwait, Malaysia, NZ, South Africa, Tunisia and US).

In the opening statement Chairman urged the WTO members to accelerate the process to move into focused drafting mode so as to allow for a timely conclusion of text-based negotiations as 2005 Hong Kong Ministerial Declaration stated. Following the Chairman’s guidance the WTO members negotiated specific proposals. The Negotiating Group meeting was followed by an informal technical workshop hosted by certain WTO members where there were more Customs-centered technical presentations and discussions. (see below)

1. WTO TFNG meeting

Discussions which may be of the interest of the WCO were as follows:

Implementation and S&D (TN/TF/W/137 and 142): Several developing WTO members re-emphasized the importance of linkage between the commitments, implementation capacity and TA/CB support. One developed WTO member argued that the WTO members would need to avoid a Uruguay Round’s mistake, i.e., single implementation period, and that it preferred a ladder approach and respected individual countries’ autonomy to determine the timeframe and sequence of the implementation. It also said that a longer timeframe did not assure the implementation acquisition and it would have to be dealt with by linkage with TA/CB. One developing WTO member raised a question with respect to the modalities of negotiations (Annex D) of how the WTO to coordinate the TF-related TA/CB activities and to monitor them.

Internet publication (TN/TF/W/132): The sponsoring WTO member said that it would revise the text in order to reflect some of the views expressed at the March Informal Technical Workshop. One WTO member argued that it would submit a non-paper on this item soon. Several WTO members questioned the necessity of establishment of WTO common Website format which was proposed to be identified by Trade Facilitation Committee (or its Working Group) in the proposal. Off-meeting, I asked the sponsoring WTO member if it was aware of the WCO Recommendation on Customs use of WWW (also part of Guidelines to the RKC General Annex) which copy I gave to them.

Appeals/rulings in a Customs union (TN/TF/W/121, 122): With respect to appeal systems in a Customs union, one Customs union WTO member explained its system that at the final stage the appeals were dealt with at the Customs union level but it would be after the stages of each member state level. The sponsoring WTO member argued that rulings issued by one member state should be applicable to the other member of the Customs union. Another WTO member argued that in the WTO only one Customs union received the level of status same to the other WTO members’ and such Customs union should have the same obligation to the other WTO members in terms of universal application of the regulations.

Fees and charges (TN/TF/W/107): One WTO member questioned many parts of the proposal: e.g., notification to the WTO is burdensome; ad valorem basis with ceiling should be accepted; flat rate basis did not reflect the service rendered. There were exchanges on the treatment of fees and charges collected by the private sector among WTO members.

Use of international standards (TN/TF/W/131): Many WTO members agreed with the concept. Nevertheless, there were cautious views on legislation of this obligation into the WTO commitment. Certain WTO members argued that the WTO should be careful of too much prescriptive approach. One WTO member argued that use of international standards as guiding information is ok; then it argued that the international standards should not bind the WTO member’s discretion and possible WTO panel interpretation. Another WTO member argued that the proposed obligation was just an aspiration and compliance to such a commitment would not be able to be measured.

Reduction/limitation and periodic review of formalities and document requirements (TN/TF/W/124): One WTO member argued that the proposed obligation was just an aspiration and compliance to such a commitment would not be able to be measured. It explicitly stated that it did not want just an aspiration and/or vague wording commitments. Another WTO member responded that the WTO needed an umbrella and guiding principles in its rules as well as substantive and measurable obligations.

Single Window / one-time submission (TN/TF/W/138): One WTO member argued the proposed obligation was just an aspiration and compliance to such a commitment would not be able to be measured. Another WTO member said that the WCO Information sheet on SW was helpful.

Separation of clearance from release (TN/TF/W/136): One WTO member supported the proposal arguing that use of bond/guarantee was the most important as they were also provided for in its FTAs. Another WTO member argued that many importers might have not sufficient financial standing to raise the bond. Other WTO member responded that Customs broker would give a guarantee instead of importers.

Risk management (TN/TF/W/140): One WTO member argued that the proposed obligation was just an aspiration and compliance to such a commitment would not be able to be measured. It argued that any countries must have some sort of risk management. Another WTO member argued that risk management has significant cost implication.

Authorized traders (TN/TF/W/109): One WTO member argued that certain criteria for authorized trader selection have to be confidential; the proposal of publication of criteria should need certain flexibility. Another WTO member posed lots of clarification of the terms used in the proposal. Several WTO members argued that reference of international standards should be guiding information rather than obligation. A sponsoring WTO member responded that “draw upon” meant as guiding information. Other WTO member pointed out that illustrative list of possible elements would not have any legal implication. The sponsoring WTO member agreed with this view and replied that illustrative list would be strengthened or it would have to be deleted.

Objective criteria for tariff classification (TN/TF/W/126): One WTO member argued that it was cautious to import other organization’s product into the WTO rule system. It said that such mechanism deteriorate the WTO panel function. It disagreed with a priori presumption of compliance. Another WTO member suggested that an insertion of the term “rebuttable presumption” might address this concern.

Customs cooperation (TN/TF/W/123): One WTO member argued that basically it could not supply information to the foreign agencies. Exception was credible foreign agencies backed up by the bilateral arrangements. It also argued that the issue had been discussed in Valuation Committee and should be discussed in the same forum.

2. WTO member-driven technical informal workshop

The Secretariat also participated in an informal technical workshop organized by 6 WTO members (China; Hong Kong, China; Korea; Sri Lanka, Switzerland and Tunisia) in the WTO building on 1 May. The objective of this workshop was to provide an opportunity for the WTO members to discuss and exchange views on issues relating to the measures to expedite the movement of goods in a more flunk atmosphere. This was entirely the WTO member-driven event; the TFNG Chairman and the WTO Secretariat also attended as audience. The number of audience exceeded 100 and the workshop last 2 hours.

The modality of the workshop was similar to the previous workshop in January: the 6 WTO members organizing this workshop gave presentations on the following negotiating items: Pre-arrival processing of consignments (TN/TF/W/117); Separation of release from clearance (TN/TF/W/136); Post-clearance audits (TN/TF/W/134); Authorized traders (TN/TF/W/109); and Establishment of release times (TN/TF/W/139/Rev.1). Each thematic presentation was followed by Q&A session.

Although the modalities were similar, the nature of the workshop of 1 May was quite different from the previous one. In the previous workshop, the speakers explained their proposals and shared their observations on other proposals. Therefore, the discussion focused on the WTO member’s proposal. At the 1 May workshop, the speakers gave national Customs experiences of the TF measures where the contents were only Customs (see presentation slides). As a consequence, the discussion no longer directly related to the WTO member’s proposals; many Q&As were simply between Customs officers and they were quite detailed. In addition, no WTO members referred to the WCO instruments. I had to intervene several times to remind the speakers and audience that the WTO member’s proposals were not only for Customs and that the WTO modalities of negotiations required the WTO members to take due account of the relevant work of the WCO.

Discussions which may of the interest of the Secretariat were as follows:

Pre-arrival processing: Hong Kong gave a presentation on its Customs experience. One WTO member posed several detailed technical questions: such as, which was the basic information to commence the pre-arrival processing, manifest or B/L; what would happen if the cargoes were found damaged at their arrival; what was the timeframe of the processing. I said that I wished hearing how HK made due account of the relevant work of the WCO in this area. Then, I reminded the audience that the proposal (TN/TF/W/117) requested Customs “and other border agencies” to conduct pre-arrival processing. I asked HK what the other government agencies’ pre-arrival processing were in HK. HK answered that (1) the Customs was the only government authority responsible for import procedures in HK; (2) HK was the duty-free port, it did not collect import duties (this was an answer to the other WTO member).

Post Clearance Audit (PCA): China Customs gave a presentation on its national Customs experience which was a very good presentation. I asked a question regarding the China’s proposal; whether China wanted to create a WTO obligation to conduct PCA or the right. China explained that its intention was to introduce the PCA concept in the WTO like guidance but not like an obligation. PCA presentation was also made by Sri Lanka.

Authorized traders: There was no presentation on this item. I briefed to the audience that the WCO has had standards in this area: Standard 3.32 of RKCGA and Authorized Economic Operator Guidelines. I said that the scope of “authorized traders” in TN/TF/W/109 appeared wider and more relaxed than these WCO standards. Then, I posed a question if the system of “Green card holders” and “Golden card holders” from the perspectives of financial solvency which were observed in several developing countries can satisfy the standards of TN/TF/W/109. One WTO member argued that it could satisfy the proposed standards provided that the other elements, such as selection criteria and procedures also met.

Time Release Study: Korean Customs gave a presentation on its time release study method: the slide presentation was exactly the same to the one which Korea gave to the PTC in March. It mentioned one-line statement that the Korean system was based on the WCO TRS; its explanation focused on Customs procedure.

In addition, Tunisia briefed its national trade facilitation initiatives to the workshop.

3. Others

The Secretariat was invited to the next TFNG meeting which would be taken place in the WTO on 7 and 8 June.

In Geneva, the WTO Secretariat was, in cooperation with potential donor WTO members, working on an establishment of a WTO Fund (WTO TF Fund) to finance the WTO TF Needs and Priorities Assessment project. The WTO Secretariat proposal presented to the donors was agreed by most of the potential donors. Plan of training of experts, in cooperation with the WCO, was explained to the donors.

4. Observation

To short, it must have been one of the most active and fruitful negotiating meetings from the perspectives of negotiators. The negotiations were quite interactive; many questions and responses were made from both the technical and legal perspectives.

More participation of the Customs administrations in the negotiation process per se is welcome. Nevertheless, Customs engagement without careful consideration could have a negative impact to the WCO. Customs contribution to the WTO negotiators should aim at creating compatible and complementary working spaces of the WCO and the WTO. It should not lead to the situation that the WTO would alternate the PTC and/or revised Kyoto Convention.

In this context, the points raised in PC0180 remain important for the future of the WCO and have to be reminded to the Members before the Customs engagement in the negotiation process. Customs administrations should always consider the risks and the consequence; they should not simply lead the contents of the future WTO Agreement towards a detailed WTO Customs Procedure Agreement. This time, I felt as if I attended a PTC meeting occasionally taken place in Geneva, except one thing, speakers/audience mentioned little, if not none, the relevant WCO instruments while they all focused their own countries’ national practices.

The atmosphere of Geneva was increasingly “let’s start textual drafting” and many negotiators talked about 4^th generation proposals. Such drafting work would be started bilaterally and stealthily among the like-minded WTO members. The Secretariat has only access to the WTO official TFNG meetings; it has no access to the WTO members’ informal dialogues if the countries did not invite/inform the Secretariat. Under the circumstances, Secretariat’s services to the Members would increasingly rely upon the Members’ contribution and co-operation to the Secretariat.