Legal Thoughts on How to Merge Trade Facilitation and Safety & Security

Abstract

Trade facilitation, understood as the simplification, standardisation and harmonisation of procedures and associated information flows required to move goods from seller to buyer and to make payment, has a lot to do with security of the global trade supply chain. Different international bodies interested in trade matters have come up with various rules, regulations, guidelines and other instruments intended to enhance trade facilitation and safety and security. This multiplicity of regulations causes some duplication and redundancies which may ultimately complicate the implementation of trade facilitation and supply chain security measures. As a solution, this paper explores the possibility of merging trade facilitation and safety and security by means of a single binding agreement under the auspices of either the World Trade Organization (WTO) or the World Customs Organization (WCO). Cognizant of the recently concluded Agreement on Trade Facilitation (WTO 2013d, WT/MIN(13)/36, WT/L/911), we further explore how the WCO can use its expertise and tools in this field to gradually enrich the Agreement in content, implementation and administration. This is in conformity with the ‘Dublin Resolution’ of the WCO Policy Commission (WCO 2013) which re-emphasised the centrality of the WCO in the implementation and administration of the Agreement on Trade Facilitation. The preference for a single binding agreement is based on the contention that ‘hard law’ (as opposed to ‘soft law’) is more likely to be effective particularly with regard to the implementation of trade facilitation and security-related provisions. And this is because ‘hard law’ tends to increase states’ commitment to international agreements, can be self-executing or require domestic legal enactment, and foresees dispute settlement mechanisms which aid enforcement. By comparing the various trade facilitation and safety and security instruments under the WCO, particularly the Revised Kyoto Convention and the SAFE Framework, it is evidenced that trade facilitation and supply chain security are just different sides of the same coin. In other words, the trade facilitation principles and standards contained in the Revised Kyoto Convention are the basis of the safety and security provisions. Moreover, it is shown that some provisions of the SAFE Framework are similar in content to those of the Revised Kyoto Convention. It is therefore argued that these two instruments would need to be merged as an all-encompassing agreement under the auspices of the WCO. For better implementation, however, this should concurrently go with the institution of an effective dispute settlement system within the WCO. The WTO Agreement on Trade Facilitation is also discussed and it is observed that it falls short on adequately addressing the safety and security issues – which issues have a strong impact on trade facilitation. Thus, as a way forward, it is suggested that the WCO needs to make good use of Article 13 (especially paragraphs 1.5. and 1.6) of the Agreement on Trade Facilitation. By using its expertise and different tools for trade facilitation, the WCO can certainly influence the implementation and administration of the Agreement on Trade Facilitation. The periodical reviews of the Agreement as per Article 13, paragraph 1.6 may, for instance, be a good medium through which the idea of a substantial merging of trade facilitation and safety and security can be introduced.