A country's international logistics performance depends on the scope and modernity of its trade facilitation reform (World Bank, 2018). An institutional obligation for members of the World Trade Organization (WTO), the National Trade Facilitation Committees (NTFC)
serve as multi-agency platforms for stakeholder engagement. These partnerships build consensus through “national roadmaps” to customize a country’s approach to upgrading its domestic interface with global markets through the implementation of the WTO Trade Facilitation Agreement (UNCTAD, 2017).
This article explores how the context for crafting trade policy is changing, particularly when considering the digitalisation of trade, and what this might imply for the role of NTFCs in fostering modernisation.
Digitalisation and the changing landscape of trade facilitation reform
Integrating digital technologies into trade facilitation reform is not simply an obligation for most countries, it is a necessity. In fact, the terms for the cost-effective and rapid movement of goods may have as much to do with a product's data as with the product itself. This is increasingly the case as the shift towards paperless trade is based on the delivery of policies and compliance through digital means.
However, disparate and emerging standards: regulations (e.g. General Data Protection Regulation, European data strategy), arrangements (for example, Digital Economy Partnership Agreement), framework treaties (e.g. Cross-Border Paperless Trade in Asia and the Pacific) and provisions (e.g. e-commerce chapters in trade agreements) - highlight the need to coordinate across communities legal y techniques relevant when developing “future-proofing” policies at the national level.
In addition, recent supply chain models specify relationships between data entities in international sales/transport contracts and require a reformulation of measures in accordance with the broadening scope of channels (e.g. cross-border e-commerce) and policy delivery modes (e.g. Internet).
However, the results of the world survey The 2019 United Nations (UN) survey on facilitating digital and sustainable trade indicate a lag in the adoption of information and communications technology (ICT) solutions by governments. Looking at the survey results, measures for cross-border trade without role in have progressed at about half the rate of implementation compared to transparency measures, on average. In contrast, measures for institutional cooperation have advanced in most countries and NTFCs are beginning to be seen as permanent fixtures following TFA implementation. With an average progress of 63 percent for paperless measures and 38.6 percent for cross-border paperless trade measures (see Figure 1), global trade has not yet been radically transformed by technology-enabled policies.
Source: Author, based on data from the 2019 United Nations Global Survey on Digital and Sustainable Trade Facilitation
From Compliance to Compliance: A Rules as Data Approach to Policy Modernization
The legal objective of trade facilitation reform is to create a clear, concise and transparent framework that adheres to multilateral expectations. The Trade Facilitation Agreement provides for WTO members to publish information on import, export and transit procedures on the Internet (Article 1.2). Commitments also refer to electronic payment systems for duties/fees (Article 7.2) and the deployment of a national single window (Article 10.4). Countries are expected to use ICTs to the “extent possible” to carry out these measures and to be informed by the recommendations y standards from the ONU.
Examples of data recommendations and standards include data models, reference data (RDM) of the United Nations Centre for Trade Facilitation and e-Business (UN/CEFACT) and the data model of the World Customs Organization (WCO). The new legal frameworks for the cross-border exchange of data via one-stop shop systems They are guided by the United Nations Commission on International Trade Law (UNCITRAL) model laws and other conventions. Many of the measures in the UN survey go beyond the requirements of the trade facilitation agreement (see Table 1).
Source: Measure categories adapted from the 2019 UN Global Survey on Digital and Sustainable Trade Facilitation
At present, progress towards TFA implementation is hampered by forces that exacerbate traditional political-economic complexity: policymaking must include stakeholder agreement and the ability to acquire or deploy technological solutions. The shift towards the delivery of policies and compliance through digital means It is necessarily achieved through ICT, but access to technology may not be equal or economically viable given the potential costs of “standard” licensing or developing in-house solutions.
The NTFC mechanism enables coordination and exchange of information on technical and legal needs with national, regional and international partners. Such partnerships They have already improved the implementation of measures, including for national single window systems (see Figure 2). As various stakeholder engagement platforms hosted in WTO member countries, NTFCs can support every step in the digitalisation of trade policy.
Figure 2. Towards a national electronic “one-stop shop” environment
Source: “ECE Recommendation No. 33”. (2005) United Nations Centre for Trade Facilitation and Electronic Business
With the same position, national committees have the potential to augment modernization efforts through computer-based legal design approaches. Well known in the field of computational law, these methods can specify executable rules in the form of algorithms that refer to calculations or data sufficiency requirements (Schartum, 2016). By constructing and publishing "control tables" in an agnostic form on the Internet, official data sources/criteria (e.g. real-time tariff lists) can drive measures for customs modernization. (Agnostic forms imply conformity to global data standards and loose coupling with programming languages, operating systems or transmission networks.)
Over time, contributions lead to the advent of “internet rules” or ubiquitous online access to the rules relevant to any cross-border transaction (Potvin et al, 2020). With a “rules as data” approach, the systems required by the Trade Facilitation Agreement can be accelerated: data-driven business rules simplify single-window deployment, improve the automation potential of data sources/documents, and lead to greater interoperability between public and private rule systems. For example, UNCTAD’s popular Automated System for Customs Data (ASYCUDA), a customs management system for international trade and transport operations, could benefit from rules expressed with a cross-platform approach to allow seamless exchange between the Java-based ASYCUDAWorld software and other differently designed solutions for the digitalization of complex trade procedures.
Prioritising developing countries: advancing future-proof reforms with NTFC
As with trade facilitation reform, various people and technologies They enable the Internet to exist and advance. Under the auspices of an NTFC, partnerships using a “rules as data” approach can bridge the widening gap between regulatory and technological change while creating an apparatus for governments to raise revenue. These reform approaches imply that the rules of trade are not only well codified, but expressed in ways that are adaptable to future needs and more functional. The rapid digitalization of trade suggests changes in traditional policymaking that involve better addressing cross-border e-commerce, trade in services, and the data needed for automation.
Typically, a country's level of development and its infrastructure imposes a constraint on national committees and their ability to leverage technology to improve trade policy design and delivery. Indeed, the sustainability of NTFCs remains a challenge in developing and least developed countries (LDCs). Only 27% of national committees have a budget to implement activities and common obstacles include resource constraints, resistance to change and lack of political will (UNCTAD, 2020).
While developing country governments face technical barriers, information asymmetries, and relatively lower current use of ICT solutions, NTFCs will continue to drive trade modernization. A “rules as data” approach can help overcome limitations: countries can meet and exceed TFA principles by jointly drafting and codifying functional policies before choosing a technology adoption model.
At present, the application of existing and planned rules cannot meet the technical needs of the digitally enabled economy. The use of new modes to deliver trade facilitation policies is based on the reality that the Internet could be a powerful facilitator of trade and reinforce transparency efforts on several fronts, namely the calculation rules that apply to cross-border transactions. As platforms, NTFCs should seek to create a better environment for trade by truly upgrading the domestic policy/technology interface with international markets.
Written by: Craig Atkinson, Consultant, United Nations (International Trade Center) and Research Fellow, Stanford University (Stanford Law School) | [email protected]
This post was published in the site of the United Nations Conference on Trade and Development (UNCTAD), and expresses the opinion of its author.
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.
