Mr. Alexander Šafarík-Pštrosz,
Chairperson of the Committee on Trade
Mr. Šafarík-Pštrosz, can you explain to a layperson
what "trade facilitation" is about?
“Trade facilitation” covers all the measures that can be taken
to smooth and simplify the
flow of trade. These measures include most of the activities, practices
and formalities involved
in collecting, presenting, communicating and processing data for moving
goods in international
trade. Goods, as you know, cannot move faster than the information
that accompanies them.
Now, national regulatory authorities often amend or add formalities
without considering what
effect this might have on the overall trading system. Traders then
find themselves confronted
with outmoded, incompatible and inefficient regulations and procedures.
All of this significantly
increases transaction costs. It also discourages participation in international
trade, especially by
small and medium-sized enterprises. According to estimates, the additional
costs can easily reach
4 to 6 per cent of the total value of world trade. “Trade facilitation” measures,
therefore, aim at
removing procedural barriers and consequently reduce transaction costs
for traders.
Isn't trade facilitation one of the so-called "Singapore Issues" of the WTO?
Why, then, is the Committee involved?
Yes, trade facilitation is under negotiation in the WTO, exactly because
of its relevance for
global trade. The trade facilitation activities of the WTO and of
the Committee are, in fact,
complementary. We provide the norms and standards to enable the rules
negotiated at the WTO
to be implemented. And we do this through our Centre for Trade Facilitation
and Electronic Business (UN/CEFACT). What the WTO does is ensure the necessary political
will by Governments
to implement these international trade facilitation measures.
UNECE has a long-standing history in facilitating international trade.
It has been doing this
since its inception in 1964. Today, with all the advance information
requirements imposed by
security measures, with the growing complexity of international
supply chains and the incredible
geographical extension of the production of goods, international
traders are confronted with
ever-increasing demands and challenges. UN/CEFACT already offers
the norms, standards and
recommendations to solve many of these problems. The Centre places
great emphasis on sharing
the gains of globalization and involving the private sector in
the development of UN/CEFACT
instruments.
How can you justify allocating UN resources to support UN/CEFACT
trade facilitation activities?
International standards, such as those developed by UN/CEFACT,
have the characteristic of a
public good and are often expensive to develop. Such public goods
benefit all users in terms of
lower costs – whether or not they contributed financially to
their development. As the private
sector cannot gain a competitive advantage from freely available public
goods, we can hardly
expect them to finance them, thus it falls to Governments and intergovernmental
organizations
to take on the task of developing them. Hence the justification for supporting
the valuable work
that UN/CEFACT is doing.
In fact, many countries and companies around the
world have built their trade facilitation
systems based on UN/CEFACT instruments. The World Customs Organization
(WCO) for example,
recommends the use of the UN/EDIFACT standard for all data exchange
between Customs
administrations and trade.
Any reduction in resources would have serious implications for
those countries and companies
that rely on UN/CEFACT’s instruments for conducting their
day-to-day business.
What will be the future developments in trade facilitation from
UN/CEFACT's perspective?
At least for the near future, UN/CEFACT will continue to build
upon its existing products, for example the United Nations electronic
Trade Documents (UNeDocs) project, which is developing standardized
trade documents that can be easily transferred between paper
and a variety of electronic formats. UN/CEFACT also has an important
new standard called the Core Components Library. This standard
will provide a vocabulary for exchanging data across computer
systems – regardless of the format or system used.
Another major recommendation concerns setting up a “Single Window” facility
for completing export and import procedures. This will also be further
developed by looking at what common standards might be used for exchanging
information between Single Windows in different countries. And, of course,
standards for electronic data interchange, like UN/EDIFACT, will continue
to be maintained and developed.
Also, as you can imagine, unless they are actually being used, international
standards are of no value at all. To encourage countries to use them, UN/CEFACT
will continue providing capacity-building to explain the standards and recommendations
to countries, particularly the relevance they have for enterprise development.
You may know that in the current WTO negotiations on trade facilitation, technical
assistance is a key element of the negotiations. We certainly have our work
cut out for us!
How do you see the future of regulatory convergence in the UNECE
region and at the global level?
Regulatory convergence should be seen as a tool to help countries
develop their regulatory framework for supporting business and trade
among countries, including with less economically developed countries.
Such convergence needs to be further developed in the region because
it allows for the exchange of safe and reliable products and services
without creating unnecessary trade obstacles or restrictions.
In the UNECE region, we have seen concrete results from our work
in this area. In particular, we drew up a Recommendation for an “International
Model”, which provides a well-defined framework for sectoral agreements
on the harmonization of technical regulations based on standards. Numerous
countries and organizations have expressed an interest in using the Model,
including the CIS countries, the African Regional Standardization Organization
and a number of Asian countries.
The UNECE’s work on regulatory convergence under both the Committee
on Trade, Industry and Enterprise Development and the Working Party
on Regulatory Cooperation and Standardization Policies is still developing.
Further work will be done in the future on identifying the most efficient
ways and tools for its implementation. Harmonized regulations, based
on international standards are particularly important for the less economically
developed countries and I see this as a very significant area for future
work.
Why do we need regulatory convergence?
Let me try to answer this question by rewording it. Do we need to better
assimilate countries into regional and global trade and other economic integration
processes? Do we need a more harmonized regulatory environment for commerce
and business? Do we need a simplified, more efficient, more open, equitable,
rule-based, predictable and non-discriminatory multilateral trading system?
Do we need worldwide-implemented measures for trade of goods and services
that protect health, life, environment and property? I believe that the answer
to all of these questions is yes, from the UNECE and, in fact, all UN Member
States as well as from consumers and, as a result, they have shown a great
interest in this UNECE activity.
How do you see the impact of regulatory convergence on the
agricultural sector in the UNECE region?
Sanitary measures and technical regulations on quality need not
always constitute unnecessary barriers to trade. If countries apply
UNECE agricultural quality standards, they have a better chance
of selling their produce abroad, within the region and internationally.
And given the importance of the agricultural sector in many UNECE
countries, particularly in South-East Europe and the CIS, increasing
the export of agricultural products may help these countries to
create new businesses and jobs, thus increasing the well-being of
their populations.
Don't you think that the current trend in international trade
is towards an increasing number of "procedures", which are
going to act as invisible trade barriers? What solutions do you
see to this?
First of all, I don’t think this is a trend. If we’re talking
about technical barriers to trade which originate in legally binding instruments,
these barriers are not invisible ones. You can see them in the respective
technical regulations, you can see them in the procedures that national authorities
apply. But yes, you are right – a number of countries are indeed
using these procedures as technical barriers to protect their domestic
markets.
UNECE carries out different activities that help to reduce or
remove such barriers. In addition to trade facilitation measures,
there are a number of good practices that can and should be promoted.
For instance, Mutual Recognition Agreements (MRAs) among countries
or economic regions. These support a wide acceptance of conformity-assessment
[test] results for consumer and industrial products. Another example
is the exchange of information on nationally developed technical
regulations, which can prevent the creation of technical barriers
to trade. Sharing best practices for assessing the impact of regulatory
changes on business and trade is an area that we may focus more
on in the future. Through our work in exchanging experiences, sharing
information, as well as promoting good regulatory practices and
recommendations, we pursue the goal of helping our member countries
and economic regions to improve their regulatory policies and practices,
thus achieving the goals of the main mandate for greater economic
integration that we have received from our member States.