was the subject of my Trade Tripper column in the past weekend's issue of BusinessWorld:
As your Trade Tripper hinted in last week’s
column (“Facilitating Bali,” Jan. 3), the significance of the Bali
Package, circling around trade facilitation, remains a huge area of
inquiry. And one specific legitimate query is what exactly does trade
facilitation bring, particularly for a developing country like the
Philippines? So far, it’s hard to come up with concrete positive
responses.
And indeed asked that while the Trade Facilitation Agreement looks good on paper (for a copy see https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN13/39.pdf),
in reality what is its relevance? The Philippines could make the
necessary customs improvements on its own, without the need of an
international multilateral agreement tying it up to other countries.
After all, by doing it unilaterally, no country can sue the Philippines
under the World Trade Organization (WTO) dispute settlement system,
assuming something in our customs rules do not come up to par in that
country’s view.
Neither do we need a trade facilitation agreement for improving trade
with other countries as most of our major trading partners are richer
countries anyway with quite developed and transparent customs
procedures. In fact, most of the provisions contained in the Trade
Facilitation Agreement are conceivably implemented already by these
developed countries, leaving it only to the poorer countries (like the
Philippines) to shoulder the additional burden of accelerating the
upgrade of their customs procedures (which, as I said, could be better
done unilaterally). Talk about differential treatment.
The only conceivable customs regulations problem (due to language
issues) would be China (and perhaps, Japan). But both are parties with
the Philippines in regional trade deals (ASEAN-China, JPEPA, and
ASEAN-Japan), of which trade facilitation is included.
Of the latter issue, it must also be said that the Trade Facilitation
Agreement essentially contains the same provisions as the Revised Kyoto
Convention on the Simplification and Harmonization of Customs Procedures
(for a copy see http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/conventions/pf_revised_kyoto_conv/kyoto_new.aspx),
which was effected in 2006. The only possible added value that the
Trade Facilitation Agreement brings is that it allows countries to sue
each other under the WTO dispute settlement system. How that could
possibly be for the benefit of the Philippines remains a mystery.
Although, on the other hand, the Trade Facilitation Agreement does
declare that developed countries are entitled to “assistance and support
for capacity building,” with capacity building being defined as
“technical, financial, or any other mutually agreed form of assistance.”
Quite interestingly and relevantly, International Business Law Adviser
reported on Japan’s “24-hour advance manifest rule,” taking effect on
March 10, which “requires all inbound cargo carriers to submit complete
manifests a full 24 hours before leaving their ports of departure. The
rule has since been widely adopted by countries all over the world.”
Under the said Rule, “notice of all containerized freight bound for
Japan must be transmitted at least 24 hours before cargo is loaded onto
vessels to the Nippon Automated Cargo and Port Consolidated System
(NACCS), the Japanese government agency responsible for the country’s
import/export and customs clearance services.” The information that must
be included: “type of cargo; names of trading parties; route; schedule;
and identification of the vessel and container. The regulation applies
to all containerized cargo intended for delivery into a Japan port.
Empty containers, break bulk cargo, and Foreign Remaining on Board
(FROB) cargo are all exempt from this rule.” The penalties, in this
case, are tough: “Shippers that fail to comply with JP24 will face tough
penalties, including a fine of approximately $5,000 that must be sent
before cargo reaches Japanese ports. Other penalties for noncompliance
may include up to one year of jail time with hard labor.”
Additionally to that mentioned, further technical areas that need deeper
examination include customs risk management procedures, duty drawback,
and rules of origin compliance.
Another thing about the Trade Facilitation Agreement is that the same
needs to be approved by each individual WTO member governmen before it
becomes effective. With US President Barack Obama still without a Trade
Promotion Authority (and with upcoming mid-term Congressional elections
this year that the Republicans are poised to gain advantages in), expert
opinions are varied as to how the US will legally accept the Bali
Package.
Finally, in relation to the matter of country approval is the issue of
overlapping provisions with other WTO texts. This was actually brought
up cogently in the International Economic Law and Policy Blog by
C.Raghavan: “rather than presenting to Members specific amendment to
each of the provisions of GATT 1994, and pre-shipment inspection
agreement, and have each of it ratified or accepted by two-thirds
majority of membership, the Bali decision requires the TF as such to be
presented to Members for acceptance or approval to be made a part of
Annex 1A of the Marrakesh Treaty. How valid would such a procedure be
under public international law? And what would it mean in terms of
rights and obligations, taking note of the over-riding interpretative
note to Annex IA”.
More on the Bali Package in succeeding columns.
