From Valparaíso, they talk about the Customs of the 21st century, key to foreign trade. The meeting with Aduana News is precise: Friday morning, Sotomayor Square, the port sector of a city whose architecture magnetizes. Everything ready for the interview: paper, pen and recorder. I look at my watch. It's time.
What are the requirements for customs in the new foreign trade scenario?
Fabian: The context of international trade has changed a lot in recent years as a result of a key process such as “globalization.” Countries are getting closer, trade is being promoted, and new players are emerging. If before the main trade was between the United States and Europe and the scenario was the Atlantic, today this has changed. With the Pacific Basin, multiple scenarios and players are presented, especially China, which in my opinion will be the most relevant player in twenty years. In this new context, more technology is being incorporated for transportation, thus facilitating greater and faster international trade, modifying, in some way, the rules of the game.
In the face of risks, foreign trade presents important challenges such as "security." It is enough to recall the attack on the Twin Towers in the United States on September 11, 2011, since which ensuring the entry/exit of goods has become a matter of concern.
In addition, there is the issue of "non-tariff barriers." That is, while international trade was characterized by the payment of customs duties, currently, goods pay less tariffs as a result of multiple trade agreements and, in addition, they must comply with other requirements related to intellectual property, the environment, phytosanitary measures. Standards that, in some way, make foreign trade a little more complex and present new demands to Customs.
This means that the role of Customs today is completely different, depending on the degree of foreign trade policy applied by the country.
However, these are new global requirements for all Customs. Based on this, I consider it necessary to define a new Customs model.
Where is the competition in this new commercial scenario?
Fabian: Competition is based on a number of factors that are not only related to the product. Currently, the product competes on “opportunity and security.â€
For example, in wine, an industry that Chile shares with Argentina, there is competition based on costs, whether the wine is organic or not, the time it takes to reach the market, and compliance with environmental standards during the production process.
This is because our target markets are developed countries where consumers will demand not only price, but also other elements of the supply chain.
The issue of "security" is important for the United States, the European Union, Japan, and Korea. Therefore, it is worth considering the SAFE regulatory framework of the World Trade Organization (WCO) and implementing the Authorized Economic Operator program in our wine companies so that they are certified in security and can have preferential access to the most demanding markets.
This allows us to identify an important phenomenon in foreign trade. Chile has 23 trade agreements with more than 60 countries in the world. But it is not enough. We need to comply with other requirements that ensure the entry and exit of goods, as well as timeliness.
What objects must be controlled by Customs to ensure security?
Fabian: There are various roles and objects to be controlled: intellectual property (counterfeit goods, pirated copyrights), drugs and psychotropic substances, the environment. Customs is responsible for protecting society as a whole in order to prevent dangerous elements from entering and harming the population of a country. This requires training officials and the private sector. One of the strengths of Chilean Customs is Customs-Customs cooperation. We have signed 12 agreements with countries to exchange information. With Argentina we have developed interesting cooperations such as the Indira System, the Sintia System, assistance for tourists, among others. Customs-Customs and Customs-Private cooperation is essential to optimize control.
What requirements must be met to be considered a 21st century Customs?
Fabian: The WCO recommends working in terms of public-private partnerships. Chile has taken this as essential, since the private sector's business is to conduct legitimate business. To this end, we created a Public-Private Customs Council in 2013, which involves all the players in the foreign trade chain. We ask about problems, solve them, streamline operations and work on the common goal: "Promote legitimate foreign trade."
Is a regulatory change necessary that can be aligned with the computer system and the advancement of the Internet?
Fabian: The Chilean customs regulatory body is made up of two fundamental laws: the Customs Law and the Organic Law, which summarize the agency's powers in foreign trade. Regarding the Tax Reform, we are introducing important reforms that will reduce evasion and automate some processes. We will also incorporate new ideas related to compliance with the norm. To do this, we must train, educate and establish benefits for those who comply voluntarily. We must incentivize, since Customs is not only there to sanction, but to facilitate foreign trade for those who comply with the norms.
Chile has an important policy on free trade zones and the Pacific Alliance (PA) seeks integration through cooperation. Is a free trade zone made up of PA members possible?
Fabian: The most novel feature of the AP (made up of Mexico, Colombia, Peru and Chile) is the possibility of accumulating Origin rather than building a free trade zone. This accumulation of origin is similar to what Asia does in ASEAN. There, the degree of integration and trade is 50% more relevant than that of Latin America due to the value chains. Therefore, when we talk about integration we must refer to the integration of the value chains in the productive processes.
So what impact does the customs agreement signed with the US have on Chile?
Fabian: The United States is an important partner, even though China has become the largest buyer in recent years. However, the United States is Chile's second largest buyer and largest supplier. President Michel Bachellet's visit to the United States was to strengthen our commercial alliance. Just as in 2013 we worked on the Visa Waiver for individuals, recently, the Customs Mutual Assistance Agreement aims to lay the foundations for cooperation between Customs for trade. Our products do not compete for quality but for opportunity cost. This was the purpose that our Minister of Finance pursued when signing the customs agreement.
However, Chile is also important for the US. Why did it ask for its collaboration to enter the Trans-Pacific Partnership?
Fabian: The Trans-Pacific Partnership (TPP) dates back to 2005, signed by Brunei, Chile, New Zealand and Singapore. It was later extended to the Pacific Rim. Today it is made up of twelve countries (Australia, Canada, the United States, Japan, Malaysia, Mexico, Peru and Vietnam). Hence its importance. It is a process that has been delayed by the issue of intellectual property, which is very relevant for North America. It has very high standards in this matter, which must be discussed. For this negotiation, the collaboration of Chile and Mexico is valued. Chile has an open economy and in Latin America it is a good example of free trade.
How do you define Chilean Customs?
Fabian: Chilean Customs is a customs office open to change and modernization. Modernization is a dynamic thing. Chile's growth depends 70 percent on foreign trade and, consequently, Customs is a key player. In addition, Customs has two functions: 1) to protect citizens from dangerous goods and 2) to turn Chile into a business platform for foreign trade because it is the engine of our country.
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.
