Introductions
The Chairman welcomed Group members and thanked them for attending. He noted that the meeting would be conducted under the Chatham House Rule. All present introduced themselves.
Introduction to SITPRO and role of SITPRO Advisory Groups
SITPRO’s Chief Executive gave a brief outline of SITPRO’s history and objectives: primarily, making international trade easier through the simplification of trade procedures. SITPRO’s new structure (Annex 1) was explained, a part of which had entailed taking a fresh look at its old policy groups, reviewing their mandate and linking them to SITPRO’s Business Plan objectives. Each of the six priorities now had an advisory group, from which SITPRO could seek advice, knowledge and deeper understanding of issues at stake.
Group members noted that the Trade Facilitation Agreements Advisory Group (TFAAG) had been established under the current priority of supporting the WTO Trade Facilitation negotiations. The Group would also look at other trade facilitation (TF) negotiations as and when they arose. In addition, the Boksburg Group (a mixture of officials, private sector representatives and aid bodies from developing and developed countries) assists developing countries to stay engaged in the WTO TF negotiations.
The Trade Facilitation Agreements Advisory Group (TFAAG)
An update was given to the Group on the current state of the WTO negotiations and the Chairman set out the proposed role of TFAAG in this context.
WTO Director General Pascal Lamy suspended the Doha Development Agenda (DDA) negotiations on 24 July 2006. Although the suspension was across the board, some meetings continued briefly (for example the negotiating Group on Trade Facilitation), but ultimately everyFriday, 7 September, 2007pe that full negotiations would be relaunched quickly. Lamy had judged that with the US mid-term elections concluded in mid-November it was time to resume the DDA negotiations in an informal way.
It was noted that SITPRO did not view the suspension of the Round as a reason against forming TFAAG because: a) the length of the suspension was unknown and; b) if the suspension was of a long duration, there was a possibility that the WTO TF negotiations would restart separately and/or bilateral trade agreements would be created to fill the void. TF’s strength lay in its ability to create a win-win outcome for all trade partners and thus there was merit in it being pursued outside of the DDA should the Single Undertaking prove unsuccessful. Thus, the pace and intensity of the Group’s work would be dictated to some extent by TF developments in, and outside of, the WTO.
In answer to a question as to the specific value added by TFAAG, given the existence of other groups discussing TF, and SITPRO’s reasons for convening it, the Chairman drew attention to SITPRO’s special role: to promote TF at arm’s length from government. Also, one of SITPRO’s Business Plan objectives was to ascertain UK traders’ priorities for the WTO TF negotiations. This was a specifically UK-orientated objective, different from the priorities of other organisations involved in looking at the WTO negotiations from various standpoints. SITPRO had therefore created TFAAG to bring relevant experts together to assess trade facilitation agreements from a pragmatic viewpoint. Advice gained from TFAAG would enable SITPRO to work more effectively in advising TF negotiators. The DTI confirmed the value of SITPRO undertaking this activity.
EU Perspective On The DDA Trade Facilitation Negotiations
The European Commission gave a presentation (attached) with some additional points. The Group noted that the Commission continued to support the objective of a WTO Agreement on TF within the framework of the Single Undertaking. Incorporated within such an Agreement would be robust rules on dispute settlement of systemic problems – a matter of importance for the EU. Trade facilitation was subjected to a fairly narrow definition in the WTO TF negotiations: it had centred on customs procedures, with a few additions. Overhaul of the WTO’s TF rules would have an impact even within the EC by helping to standardise import and export procedures through, for example, strengthening the World Customs Organisation’s standards by enshrining them in enforceable rules.
Turning to the current and future state of WTO negotiations, the Group noted that the WTO Secretariat compilation of the proposals made by WTO members (document code TN/TF/W/43/Rev.10) was effectively a first draft of a future TF Agreement. Negotiating activity (“soft” negotiations, at a technical level) had already re-commenced in Geneva. It was believed that, following the US mid-term elections, the US could come to the table with greater negotiating flexibility on a DDA package as a whole. However, there remained uncertainty as to whether the current momentum would be sustained or quickly burn out. The Group further noted that a lot of negotiating effort would still be needed to turn the WTO Secretariat draft into an agreement: although there was great support for TF in general, there remained those who questioned the validity of the TF negotiations. There were still many issues which would be highly debated, such as transit for landlocked developing and least developed countries. Technical assistance, special and differential treatment (S and DT) and flexibility were also key issues for the latter.
The Group recognised that it was therefore vital for the private sector to be involved and contribute to the development of technical assistance for developing and least developed countries. Group members agreed to use whatever networks were at their disposal to ensure that their thinking on the TF issues was fed into the debate, not only in Europe but also in other WTO member countries.
Future TFAAG Objectives and Priorities
The presentation was followed by a general discussion on a range of issues:
- UK Business Priorities:
The Group noted that both the Commission (as negotiator on behalf of the EC) and the Department of Trade and Industry (who press the UK national position within the EC and participate in coordinating the European line) had stated that it is critical for them to know UK business priorities. - Flexibility in TF Commitments:
Group members supported the general concept that each WTO member’s TF commitments should be linked to capacity. Greater flexibility and control would probably be given to developing countries by allowing them to assess capacity themselves through carrying out their own GAP analysis (comparing actual and potential performance).
In addition, the rules could be divided up into those binding on all WTO members from the outset and those to which individual members would commit to in a stage-by-stage process as and when they are able to do so. Group members noted that landlocked developing countries in particular would wish to restrict the amount of flexibility incorporated into the rules, especially those who relied on the cooperation of their neighbour country to get their goods to a port. Tailor-made implementation plans designed to complement those of other countries in the same region would be needed to address such issues. - Bilateral Trade Agreements:
The Group considered whether TF measures could be secured bilaterally. Group members agreed that TF could be achieved via bilateral agreements. However, they cautioned against regarding the latter as a substitute to the WTO negotiations. If countries created similar but not identical TF conditions, globally there would be great imbalances and inconsistencies.
The Group recognised that if a WTO Agreement did not materialise bilateral agreements might be the only option and in that case various issue would arise. The EU (which was in a strong position to negotiate bilateral Regional Trade Agreements (RTAs)) might be able to secure fast track treatment for EU origin goods, even if this was to the detriment of others and contrary to the Most Favoured Nation principle.
The Group considered the link, or lack thereof, between bilateral agreements or RTAs and a potential WTO Agreement. For some members of the Group the two did not appear complementary. Conversely, the Commission held the view that such agreements could support a WTO TF Agreement, which remained the big prize. RTAs agreed between the EC and third countries would contain a TF element backed by provisions linking the latter to any WTO Agreement (as, for example, in the ACP agreements). - Pre- and Post- Shipment Inspection:
The Group supported the EC’s goal of eliminating pre-shipment inspection. The Group were also conscious of the move towards post-shipment inspection in some countries: they stressed that it was most important for trade not to have checks done more than once. - Security Measures:
The Group noted that a WTO Agreement could help maintain control over security measures through consistent application of common undertakings and the principle of proportionality. The Group hoped that the eventual universal recognition of authorised economic operator status would also be helpful; notwithstanding that from a trade perspective, attempts at simplification and modernisation all too commonly resulted in more complication. - Coordination Between Border Agencies:
The Group called for the WTO TF negotiations to secure greater coordination between border agencies. The case of moving meat products was given as an example to show how important this was: both DEFRA and HMRC currently had requirements for the trader to fulfil. - Prior Consultation of Rule Changes:
The Group endorsed the Commission’s objective of ensuring negotiating issue C. (Consultation and Comments on New and Amended Rules) and the necessity principle (regarding the implementation of onerous/trade distorting legislation) were incorporated into a TF Agreement. - Feedback to the Group:
In order for the Group to be kept abreast of developments, SITPRO would feed it information both on the benefits of trade facilitation and on progress made on the WTO TF negotiations.
TFAAG Terms of Reference
The Draft Terms of Reference were put before the Group for discussion and some changes were agreed. (See revised TOR at Annex 2)
Any Other Business
The Group envisaged meeting approximately three times per annum, supported by virtual activity and ad hoc meetings as and when deemed necessary.
Date of Next Meeting
Week commencing 22nd January 2007 (to be notified).Annex 1: SITPRO's Structure
Annex 2: Revised Terms of Reference
A consultative group to:
- Advise SITPRO on all aspects of broad multilateral agreements on Trade Facilitation, whether or not in the context of the WTO Doha Development Round (DDA)
- Act as a forum for exchanging information and views on the wider TF agenda, including impact assessments and assistance for developing countries
- Enable SITPRO to consult business and other stakeholders on principles and details to be included in TF agreements, rules and implementation procedures
- Assess the impact and compliance costs of the rules being created by TF agreements
- Report on other issues or concerns arising from the Advisory Group’s discussions
- Make comments and recommendations as necessary
Return to Policy Groups: TFAAG
