RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/149
14 April 1999
(99-1490)
Council for Trade in Goods
TRADE FACILITATION - CONTRIBUTIONS RECEIVED FROM
OTHER WTO BODIES
Note by the Secretariat
I. INTRODUCTION1. On 8 July 1998, the Council for Trade in Goods agreed to carry out its further work on trade
facilitation as set out in a Chairman’s proposal on future work (contained in G/C/M/34).  Paragraph 3of the Chairman’s proposal states:
“Furthermore, the Chairman of the CTG will invite the Chairpersons of the Committees on
Customs Valuation , Import Licensing,  Rules of Origin, Sanitary and Phytosanitary Measures,
Technical Barriers to Trade, the Chairperson of the  Working Party on Preshipment Inspection  and,
as appropriate, the Chairpersons of other subsidiary bodies of the CTG to propose an item "trade
facilitation" for inclusion in the agenda of their meetings.  Under this agenda item, these bodies
will henceforth address those aspects of trade facilitation which they regard as being related to the
respective agreements with a view to introducing the results of these discussions into the informal
CTG discussions on trade facilitation in March 1999.  The Chairman of the CTG will also contact
the Chairpersons of the Council for Trade in Services and the Council for TRIPS as well as the
Chairperson of the Committee on Trade and Development to suggest that these bodies make asimilar contribution.”
2. On 1 September 1998, the Chairman of the CTG wrote a letter to the Chairpersons of the
bodies mentioned above, requesting them to address those aspects of trade facilitation which they regard
as being related to the respective agreements and areas of work, with a view to introducing the results ofthese discussions into the informal CTG discussions on trade facilitation in March 1999
1.
3. In conducting their work, the Council for TRIPS, the Committee on Trade and Development,
and the Committee on Customs Valuation requested the Secretariat to prepare background notes on
the relationship between their respective areas of work and trade facilitation.  The papers prepared inthis context carry the symbols IP/C/W/123 (TRIPS Council), WT/COMTD/W/57 (Committee on
Trade and Development), and G/VAL/W/32 (Customs Valuation).  Also, the Secretariat circulated an
informal note on the GATS and trade facilitation (Job  No. 5156) at a meeting of the Council for Trade
in Services on 14 October 1998.
4. The following responses have been received from those WTO bodies mentioned in paragraph 3
of the Chairman’s proposal on future work:
                                                     
1  The informal meeting initially foreseen for March has been postponed to 19 and 20 April 1999.G/C/W/149
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II. COMMITTEE ON TECHNICAL BARRIERS TO TRADE
5. The  Committee on Technical Barriers to Trade  held discussions on trade facilitation at its
meetings of 20 November 1998 and 31 March 1999, and will continue its discussions on this matter at its
next meeting in June 1999.  Records of the discussions of the November meeting are contained indocument G/TBT/M/14.  On behalf of the Committee, the Chairman submitted a note with the following
content to the Chairman of the Council for Trade in Goods:
“The objective of the Agreement on Technical Barriers to Trade is to minimize
technical barriers to trade.  The text of th e Agreement recognizes the importance of trade
facilitation  It is reflected, for example, in the provisions related to non-discrimination, the
avoidance of unnecessary obstacles of trade, encouragement of harmonization, the concept ofequivalence, mutual recognition and transparency.  In particular, under the transparency
provisions of the Agreement, industries and traders can obtain standard related information
from national enquiry points, and opportunities are provided for Members to comment on
other Members' draft technical regulations and conformity assessment procedures to avoid
unnecessary trade obstacles.
In accordance with Article 13.1 of the Agreement, each Member has the opportunity
of consulting in the Committee any matters relating to the operation of the Agreement to the
furtherance of its objective.  At each regular meeting, the Committee hears statements on the
implementation and administration of the Agreement.  Measures have been brought to theattention of the Committee by Members who raise concerns about the potential adverse trade
effects or inconsistency with the Agreement of those measures.  Under Article 15.2 of the
Agreement, Members have informed the Committee of measures taken to ensure the
implementation and administration of the Agreement.
Article 15.4 of the Agreement provides that the Committee review the operation and
implementation of the Agreement every three years.  The First Triennial Review was
conducted at the end of 1997.  The Committee reiterated the importance of the prevention and
elimination of technical barriers to trade and the essential role of the Agreement furthering
these objectives.  The Committee noted, however, that certain difficulties or problems existed
in a number of areas regarding the operation and implementation of the Agreement
(G/TBT/5).  The Committee started its programme of work arising from the First TriennialReview at the beginning of 1998.  This is providing Members further opportunities to hold
discussions on elements in relation to trade facilitation.
To conclude, the provisions of the TBT Agreement are by their very nature relevant
to trade facilitation.  Issues related to this matter have therefore been a regular feature of thework of the TBT Committee.  They are being addressed regularly, in particular, under the
agenda item ‘Statements on Implementation and Administration of the Agreement’.”
III. COMMITTEE ON SANITARY AND PHYTOSANITARY MEASURES
6. The Chairman of the Committee on Sanitary and Phytosanitary Measures reported that the
SPS Committee had met informally to discuss problems related to trade facilitation and the request of
the Council for Trade in Goods on this matter.  The Chairman had been asked by the Committee to
submit the following response:
“Introduction
The text of the Agreement on the Application of Sanitary and Phytosanitary Measures
(SPS  Agreement) recognizes the importance of trade facilitation.  The preamble to the SPSG/C/W/149
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Agreement emphasizes the desirability of harmonizing sanitary and phytosanitary measures
between Members and notes the important contribution that international standards,
guidelines and recommendations can make in this regard.  Two aspects of the SPS
Committee's work are particularly relevant to trade facilitation, notably (i) the regular
provision of information from Members on the implementation of the SPS Agreement, andthe (ii) SPS Committee's work related to the international standard-setting organizations.
Information from Members on the implementation of the SPS Agreement
At each regular SPS Committee meeting, Members are given the opportunity to
provide any information with regard to the im plementation of the SPS Agreement.  Under this
agenda item, which has been widely used, Members have raised issues regarding specific
trade concerns, matters related to the operation of the transparency provisions of the
Agreement and other relevant matters.  Issues raised in 1998 include: bilateral agreements andconsultations between Members; the recognition of the disease- or pest-free status of
countries;  and the use of international standards.  In respect of concerns of a more specific
nature, the Committee has examined, inter alia , measures related to BSE;  measures related to
maximum levels of aflatoxins in food;  measures related to establishments operating in the
animal feed sector;  measures related to food and food ingredients treated with ionizingradiation;  measures affecting apples, pears, quinces, ware potatoes, meat and livestock
products, pork and pork products, poultry products, dairy products, milled rice, coconut palms
and related products, and fish products.  In most cases, the purpose of raising these issues in
the context of the SPS Committee meetings has been to facilitate trade by way of identifying,
clarifying and, where feasible, resolving specific matters.  The Committee has also discusseddevelopments in relation to the recognition of pest- or disease-free areas and the recognition
of equivalence of SPS measures.  The summary reports of each meeting record the issues
considered and the work of the Committee in this regard (G/SPS/R/ series).
The transparency provisions of the Agreement also are of cardinal importance for
facilitating trade.  Members must give notice in advance of the implementation of new, ormodification of existing, sanitary or phytosanitary measures, except in situations of
emergency actions.  This procedure affords Members the opportunity to comment on and seek
changes in the proposed measures before their implementation.  Since the entry into force of
the SPS Agreement, over 1,000 notifications have been circulated.  The obligation for
Members to identify a national notification authority and to establish an enquiry point to
respond to requests for information on SPS measures requires coordination among the various
national agencies with responsibility for sanitary and phytosanitary measures.  Suchcoordination, along with the information provided, is important for trade facilitation.  As part
of the review provided for in Article 12.7 of the SPS Agreement, a number of specific
proposals have been made to improve the functioning of the transparency and notification
procedures.  The proposals are reflected in the draft report on the review exercise currently
under consideration by the Committee (G/SPS/W/92).  Although the operation of nationalenquiry points is generally satisfactory, coordination among domestic agencies could be
improved.  The notification of bilateral equivalency recognition agreements has also been
suggested.
The SPS Committee's work related to the international standard-setting organizations
Under the SPS Agreement, Members are encouraged to play a full part in the work of
the relevant international organizations and in their subsidiary bodies, in particular the
FAO/WHO Codex Alimentarius Commission (Codex), the Office international des épizooties
(OIE) and the FAO International Plant Protection Convention (IPPC).  These organizationsG/C/W/149
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are observers in the SPS Committee. They regularly report on any activities that are relevant
to the work of the SPS Committee, such as the status of international standards.
One of the specific tasks of the SPS Committee, as set out in Articles 3.5 and 12.4 of
the SPS Agreement, is to develop a procedure to monitor the process of international
harmonization and coordinate efforts in this regard with the relevant internationalorganizations.  A provisional procedure to th is effect was implemented on the basis of a
decision by the Committee in October 1997 and is currently a regular agenda item in the work
of the Committee (G/SPS/11, dated 22 October 1997, refers).  The purpose of this procedure
is to identify cases where non-use of international standards, guidelines or recommendations
results in a major impact on trade and to determine the reasons for the non-use of the
standards, guidelines or recommendation concerned.  According to this procedure, Members
are invited to submit, in advance of each regula r meeting, examples of what they consider to
be problems with significant trade impact which they believe are related to the use or non-use
of a relevant international standard, guideline or recommendation.  The submissions are
compiled by the Secretariat.  In accordance with this procedure, the Secretariat has drafted the
first annual report on the standards identified and comments made on these, which is under
consideration by the Committee (G/SPS/W/94).  When agreed, this report will be transmittedto the international organizations responsible for developing the relevant sanitary and
phytosanitary standard, guideline or recommendation. To date the Committee has discussed
submissions of this nature from four Members (G/SPS/W/87, G/SPS/W/89, G/SPS/W/91  and
G/SPS/W/96  refer).
As part of its review of the Agreement in terms of Article 12.7, the Committee is
examining concerns with implementation of various provisions.  Many of these have
implications for trade facilitation.  The issues and proposals considered will be reflected in the
report on the review exercise.
Conclusion
The provisions of the SPS Agreement are by their very nature relevant to trade
facilitation. Issues related to this matter have therefore been a regular feature of the work of
the SPS Committee.  They are being addressed particularly under three  regular  agenda items:
(i) implementation of the Agreement (including specific trade concerns);  (ii) matters of
interest arising from the work of observer organizations;  and (iii) monitoring the use of
international standards.  In light of this, the SPS Committee does not consider it necessary to
add an additional agenda item entitled "Trade Facilitation" as part of its regular agenda.”
IV. COMMITTEE ON IMPORT LICENSING
7. The following information was received from the Chairperson of the Committee on Import
Licensing:
“The Committee on Import Licensing, at its meeting on 20 October 1998 and at
informal consultations held on 16 February and 8 March 1999, discussed those aspects of
trade facilitation which it regarded as being related to the Agreement on Import Licensing
Procedures.
Some delegations observed that the Agreement recognized the importance of trade
facilitation and that it embodied concepts and principles which were important to facilitate
trade.  The Preamble of the Agreement recognized that "the flow of international trade could be
impeded by the inappropriate use of import licensing procedures" and the desire of Members toG/C/W/149
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"simplify, and bring transparency to, the ad ministrative procedures and practices used in
international trade, and to ensure the fair a nd equitable application and administration of such
procedures and practices".  Thus the Agreement aimed to ensure that the administrative
procedures applied for granting import licences did not in themselves have restrictive or
distortive effects on imports;  were simple, transparent, predictable, impartially applied andadministered; and were not more administratively burdensome than necessary.
Some delegations highlighted the important link between trade facilitation and the
Agreement and considered that transparency and the rapid release of goods, which were the
objectives of trade facilitation, could be better accomplished if Members were more diligent
with respect to implementing the obligations of the Agreement.  The obligation for timely
notification played an important role in enhancing transparency of import licensingprocedures.  In this context, one delegation  suggested that notifications be made more
accessible to the private sector, and that the Secretariat play a role in ensuring greater
distribution of information by creating a linkage between the WTO's Internet site and national
sites containing information on import regulations.  This delegation proposed that the aspects
related to import licensing as mentioned in paragraph 12 of document G/C/W/114 beconsidered.
Some delegations also stated that while the disciplines of the Agreement were
designed to ensure that no additional procedural obstacles were created in administering
import licensing policies, its purpose was the avoidance of barriers rather than the facilitationof trade per se .  One delegation, in its communication (G/C/W/136), noted that  procedures for
granting import licences could be improved by making them an integral part of simplified
trade procedures.  Its proposals included the reduction of data requirements to a minimum
necessary for effective controls, harmonization of data and documentation requirements, the
need to apply to a single agency for the issuing of an import licence ("single-window"
principle), and automation and moderniza tion of import licensing management and
verification operations.  This delegation was of the view that the adoption of these
innovations, as a component of WTO rules to simplify trade procedures, would bring
identifiable benefits for traders through reduced costs and delays, and would improve control
capabilities of governments using import licensing, at a lower cost.  Some delegations also
highlighted the linkage between trade facilita tion and development including with respect to
matters relating to technical cooperation and assistance to developing countries in the area ofimport licensing procedures.
Some delegations were of the view that appeal and review procedures as well as prior
notification of changes to import licensing procedures were areas where rules of the
Agreement might be improved to further reduce the unintended disruptions to trade that maybe caused by the issuance of import licences.
Some delegations were of the view that the WTO's work on trade facilitation should
not duplicate that of other organizations and fora such as the WCO and APEC.”
V. COMMITTEE ON RULES OF ORIGIN
8. The following reply was received from the Chairperson of the Committee on Rules of Origin:
“The Committee on Rules of Origin (CRO), at its meetings on 15 October 1998 and
22 February 1999, discussed those aspects of trade facilitation which it regarded as being
related to the Agreement on Rules of Origin (the Agreement).G/C/W/149
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It should be noted that the Preamble of the Agreement recognizes that “clear and
predictable rules of origin and their application facilitate the flow of international trade”, and
that the clarity and predictability of rules of origin, in turn, is to be ensured when the
Agreement itself is fully implemented by all Members.  The following aspects of the
Agreement are particularly relevant for trade facilitation:  (i) implementation of Article 2 andparagraph 3 of Annex II of the Agreement;  and (ii) harmonization of non-preferential rules of
origin .  Some delegations observed that the concept of trade facilitation may extend beyond
the present provisions of the Agreement, for example, to administrative aspects of the
application of the harmonized rules of origin .
Implementation of Article 2 and paragraph 3 of Annex II of the Agreement
Article 2 of the Agreement establishes disciplines which Members should fulfil
during the transition period.  Similar disciplines are also provided for in paragraph 3 of
Annex II of the Agreement.  These disciplines include several procedural provisions which
lead to simplification of trade procedures if they are fully implemented:  (i) prompt
publication of rules (Article 2(g) and paragraph 3(c) of Annex II);  (ii) advance bindingassessment of origin (Article 2(h) and paragraph 3(d) of Annex II);  (iii) non-retroactivity of
the rule application (Article 2(i) and paragraph 3(e) of Annex II);  (iv) availability of judicial
review of administrative action (Article 2(j) and paragraph 3(f) of Annex II);  and (v)
confidentiality of information (Article 2(k) and paragraph 3(g) of Annex II).
In this context, attention is drawn in particular to the advance binding assessment of
origin.  The CRO, at its meeting on 3 October 1997, mandated the Secretariat to conduct a
survey of Members’ practices with reference to Article 2(h) as well as paragraph 3(d) of
Annex II of the Agreement.  The Secretariat has circulated information provided by 33
Members in documents G/RO/W/26 and G/RO/W/26/Add.1.  On the basis of thesesubmissions, it appears that 13 of these 33 Members implement Article 2(h) and
paragraph 3(d) of Annex II of the Agreement.  It should also be noted that 37 Members have
notified the Secretariat that they do not have non-preferential rules of origin (see documents
G/RO/N/1-24).
It should further be noted that some Members have stated that, although they have not
established an explicit procedure, they, by way of administrative means, are fulfilling theobligations as provided for under Article 2(h) of the Agreement.
Finally, as concerns the implementation of paragraph 3(d) of Annex II of the
Agreement, some Members, in their responses to the Secretariat’s enquiry, pointed out  that
preferential trade regimes are managed by specific certificate-of-origin schemes applicable tothose preferential transactions.
Harmonization of non-preferential rules of origin
One of the objectives of the Agreement is to harmonize and clarify non-preferential
rules of origin; i.e. to establish an international common system of non-preferential rules of
origin which will provide more certainty in the conduct of world trade.  Pursuant to
Article 3(a) of the Agreement, upon completion of the HWP, Members should apply the
harmonized rules of origin as defined in Article 1.1 equally for all purposes as set out in
Article 1.2 of the Agreement.   The harmonized rules of origin should also be “objective,
understandable and predictable”, and “should be administrable in a consistent, uniform,
impartial and reasonable manner” (see Article 9.1(c) and (e) of the Agreement).G/C/W/149
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Due to the complexity of these issues, the HWP, which was launched in July 1995,
was not completed within three years of its initiation as foreseen in the Agreement.  In July
1998, Members agreed to extend the deadline, and to commit themselves to make their best
endeavours to complete the HWP by November 1999 (see G/RO/25).”
VI. COMMITTEE ON CUSTOMS VALUATION
9. The following letter was received from the Chairman of the Committee on Customs
Valuation:
“The Committee [on Customs Valuation] started discussions on the relationship
between trade facilitation and the Customs Valuation Agreement at its meeting of 13
November 1998 where a preliminary exchange of views was held.  To assist the Committee's
discussions, the Secretariat prepared a paper, contained in G/VAL/W/32, on the linkages
between trade facilitation and the Agreement on Customs Valuation.
The discussion of trade facilitation and customs matters covers an extremely wide
breadth of economic activity.  The Report by the Secretariat of the WTO Trade Facilitation
Symposium (G/C/W/115) held 9-10 March 1998, highlights many of the areas and issues that
arise from this relationship through the presentations that were made by the participants of
their experiences.  While many of these presentations cover customs procedures, the WTOAgreement on Customs Valuation deals exclusively with valuation of imports for customs
purposes.  It was observed that the procedures used by customs administrations and their
organization and administration are strongly linked to the effective implementation of the
Agreement, and its contribution towards facilitating trade.  However, the mandate of the
Agreement limits the Committee's role in customs matters to those relating to valuation.  Inthis context, it has been observed in the communication from the European Communities
(G/C/W/136) that introduction of some trade fa cilitation rules would improve the capacity of
WTO Members to apply the Agreement properly.  This communication stated, for example,
that pre-arrival processing of electronically transferred data from traders to customs
administrations reduces error levels, speeds up processing of declarations, and frees customs
resources to apply correctly the provisions of the Agreement.  This could be a major benefit
for those WTO Members who are now preparing to apply the Agreement in full for the firsttime.  Further, modern customs techniques of risk assessment, auditing and rapid release
facilities for authorised traders similarly enables customs to concentrate expertise and
resources on targeting higher risk consignments and thus reduce fraud carried out be
undervaluation or misclassification of goods.
At its meeting of 13 November 1998, the Committee on Customs Valuation took up
the item trade facilitation in a preliminary exchan ge of views.  The report of this meeting is
contained in document G/VAL/M/9.  Some delegations highlighted the important link
between trade facilitation and the Agreement on Customs Valuation.  In fact, some considered
that valuation of imported goods and the effective implementation of the Agreement were oneof the most important contributions to the trade transaction process and therefore to the
facilitation of trade.  Some delegations noted several reasons for the importance of this link.
First, full implementation of the Agreement would assist in greater uniformity and certainty of
implementation of tariff commitments when valuation was conducted according to the
multilaterally agreed rules in the Agreement.  Second, the Agreement was about improvedoperation of instruments and improved operation and organization of valuation issues.
It was also mentioned that some  specific aspects of the Agreement related to trade
facilitation and were commonly considered to be "best customs practices".  This included, forG/C/W/149
Page 8
example, the provisions in Article 11 stipulating that the legislation of each Member shall
provide for the right to appeal any determina tion of customs value by the importer or any
other person liable for the payment to an authority within customs and ultimately to a judicial
body; in Article 12 requiring the publication of all laws, regulations, judicial decisions and
administrative rulings of general application giving effect to the Agreement, in accordancewith Article X of GATT 1994; and in Article 13 which requires that Member's legislation
make provision for the right of importers to withdraw imported goods, pending any final
determination of customs value, with provision of a sufficient guarantee in the form of a
surety, a deposit or some other appropriate instrument.  It was mentioned that the release of
goods prior to clearance had been an internationally recognized "best customs practice".  One
proposal, supported by some delegations, was that part of the further work on trade
facilitation could examine the implementation of these three provisions.
Several delegations highlighted the need to be mindful, in any discussion of trade
facilitation, of the differences in economic and commercial developments as well as the use of
information technology.  In this regard, they noted the great need for technical assistance to
increase capacity in terms of both infrastructure and human resource development.  It wasalso noted that the Agreement on Customs Valuation provides several special and differential
treatment provisions for developing countries in Article 20 and Annex III of the Agreement.
In particular, attention should be drawn to Article 20.1 of the Agreement which foresees the
possibility for a developing country Member to delay implementing the Agreement for a
period not exceeding five years.  This period of time is to be used by the Member to make thetransition to the Customs Valuation Agreement.  In addition, Article 20.3 provides that
"developed country Members furnish, on mutually agreed terms, technical assistance to
developing country Members that so request.  On  this basis, developed country Members shall
draw up programmes of technical assistance which may include, inter alia, training of
personnel, assistance in preparing implementation measures, access to sources of informationregarding customs valuation methodology, and advice on the application of the provisions of
the Agreement".  Some fifty-three developing country Members have invoked the delay
period which will expire within the followin g one to two years.  For this reason, the
Committee agreed to engage more actively in the area of technical assistance.
It was agreed that technical assistance should be tailored to the specific needs of the
Member concerned.  Identification of those needs was assisted by a questionnaire, theresponses to which have assisted in the  establishment by the Secretariat of a Programme of
Technical Assistance, which has already benefitted fourteen Members.  In addition, some
developed country Members informed the Committee of the technical assistance activities
they had conducted or were conducting.  Some delegations pointed out the benefit of
developing a framework for trade facilitation th at would ensure coherent cooperation between
relevant international organizations in the field of technical assistance and capacity building.
The Committee also agreed that the responses to the questionnaire (G/VAL/W/24/Rev.1)
should be forwarded by a senior WTO official to other international organizations in order to
draw their attention to the needs identified in developing country Members with respect to
this Agreement and its implementation.   Such a letter, it was felt, would serve to better
coordinate the efforts of all the organizations and to avoid duplication in any of the technical
assistance provided.”
VII. WORKING PARTY ON PRESHIPMENT INSPECTION
10. Considerations on the relationship between the Agreement on Preshipment Inspection and trade
facilitation are contained in paragraph 20 the Working Party’s final report (G/L/300).  The paragraph
reads as follows:G/C/W/149
Page 9
“The Working Party discussed this issue in response to a request from the Council for
Trade in Goods, at its meeting of 5 June and 8 July, that its sub-committees and working
parties add this item on to their formal agenda.  From these discussions in the informal group,
two themes emerged.  The first is that any improvement to the efficient functioning of the
Agreement, as identified above, will in itself help to facilitate trade.  The second is thatfacilitation measures, notably the modernisation and reform of customs procedure, through
the adoption of international standards and practises for documentation and data, coupled with
introduction of modern customs techniques by national customs authorities, will make it
easier for countries to move away from PSI systems, leading ultimately to better use of
resources, improved revenue collection and control, and greater facilitation of trade.”
VIII. COUNCIL FOR TRADE IN SERVICES
11. The following reply was received from the Chairman of the Council for Trade in Services:
“Informal consultations [of the Council for Trade in Services] were held on
6 October 1998, to provide for an initial exchange of views on the subject of trade facilitationas it relates to the GATS.  On this occasion, several delegations expressed the view that trade
facilitation in services should not be discussed in the CTS as a separate item, but should rather
be taken up as it relates to individual services sectors in the context of the exchange of
information exercise.  One delegation also sugge sted that issues relating to Electronic Data
Interchange (EDI) be taken up in the context of the Work Programme on ElectronicCommerce.
At the Services Council meeting of 14 October 1998 the Secretariat circulated an
Informal Note dated 24 September 1998 (Job No. 5156) containing a short paper on the
GATS and Trade Facilitation, which had been originally prepared as an input to the WTOSymposium on Trade Facilitation held in March 1998.  The Note focused on the role of
services liberalisation under the GATS in facilitating trade in goods, while it did not take up
the issue of whether the concept of trade facilita tion as originally raised in relation to trade in
goods was applicable to trade in services under the GATS.
The sense of discussions held in the CTS was that the concept of trade facilitation as
originally raised in the context of trade in goods, i.e. mainly concerned with simplifying,
streamlining and modernising customs formalities and administrative procedures, was not as
such applicable to trade in services.  However, in  a broader sense, it was felt that liberalisation
of trade in services could play an important role in facilitating trade in goods.  For example, as
internationally traded goods are physically transported across national borders, transport
services provide the essential infrastructure for cross-border trade.  In the sectoral discussionon maritime transport services, which took place at the Services Council meeting of 9
December 1998, delegations underlined the importance of coordinating work in this sector
with the work on trade facilitation taking  place in the Council for Trade in Goods.
Competition in transport services is likely to bring down costs and improve the quality and
choice of transport services available to importers of goods.  Another service sector of evenmore direct relevance to trade facilitation in goods is Electronic Data Interchange (EDI).
Also, telecommunication technology can facilitate trade, by allowing for faster and more
efficient communication between traders, businesses and government agencies, thus reducing
delays at borders and complicated and unnecessary documentation.  EDI significantly reduces
waiting times for traders as it allows them to provide different government agencies with allthe necessary documentation for clearance at the borders and to obtain the necessary
approvals through the network.”G/C/W/149
Page 10
IX. COUNCIL FOR TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY
RIGHTS
12. The following letter was received from the Chairman of the TRIPS Council:
“The Council for TRIPS took up the issue of trade facilitation in response to this
request at its meeting of 1-2 December 1998 and 17 February 1999.  At its meeting in
February 1999, the Council had before it a non-paper submitted by the European
Communities and their member States, Job No. 7109, as well as a Secretariat background note
on the relationship between the TRIPS Agreement and trade facilitation, document
IP/C/W/123.  The Council agreed that its Chai r should convey to the Council for Trade in
Goods the record of the discussions that it had held on this agenda item, as reflected in theminutes of the Council, together with copies of the papers that had been presented to the
Council on this matter.”
The discussions of the Council are reflected in the minutes with the following
symbols: IP/C/M/20, IP/C/M/21, IP/C/M/22.  The non-paper submitted by the EuropeanCommunities is attached in an Annex to this document.
X. COMMITTEE ON TRADE AND DEVELOPMENT
13. The following letter was received from the Chairman of the Committee on Trade and
Development:
“First, CTD Members began with an extensive informal and valuable extensive
exchange of views on the subject.  Second, fo llowing this exchange, the Secretariat was
formally requested by CTD Members to produce a paper entitled: "Development Aspects of
Trade Facilitation" .  This paper, contained in document WT/COMTD/W/57, was requested
by Members, to assist in framing their further exchange of views and discussions on the
subject.  Third, these further exchange of views took place amongst Members formally and
informally.  The notes of the formal meetings of the CTD underscore the richness of the
debate on the subject.  These are contained in documents WT/COMTD/M/22,
WT/COMTD/M/23/, and, WT/COMTD/M/24 – yet to be issued.
Fourth, I would like to draw your at tention to the presentation by UNCTAD,
represented by Mr. Maxence Orthlieb, on the subject, following a request by Members.  The
presentation by UNCTAD was made on 2 November 1998.
Finally, following the understanding that emerged in Informal Consultations in the
CTD, most recently on 1 April 1999, I am pleased to attach herewith, a list of issues,
contained in an Issues Paper, prepared by the Secretariat on its own responsibility
2.  This
Issues Paper reflects the main points that were evident in the course of statements made at the
CTD while considering this important subject.  In conveying this paper, it is necessary to
emphasise that the attached list of issues was neither negotiated nor do they necessarily reflectcommon or agreed positions of Members of the CTD."
                                                     
2  contained in Annex II.G/C/W/149
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ANNEX I
Job. 7109
Council for Trade-Related Aspects
of Intellectual Property Rights
23 December 1998
TRADE FACILITATION
Discussion Paper from the European Communities and their member States
The present document reproduces the text of an informal discussion paper on trade facilitation
and border infringement of intellectual property rights made available by the European Communitiesand their member States at the informal meeting of the TRIPS Council on 1 December 1998.
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TRADE FACILITATION AND BORDER ENFORCEMENT OF
INTELLECTUAL PROPERTY RIGHTS
I. INTRODUCTION
The Singapore Ministerial Meeting mandated the WTO Council on Trade in Goods (CTG) to
carry out "analytical work on the simplification of trade procedures . . . in order to assess the scope for
WTO rules in this area".  That work is now underway in the CTG.  As part of its mandate the CTG
has also invited other WTO bodies to consider the relevance of trade facilitation to their work.  Hence
the invitation to the TRIPS Council, which has placed trade facilitation on its agenda.
II. SIMPLIFICATION AND MODERNIZATION OF CUSTOMS PROCEDURES
Much of the discussions in the CTG have been on customs related issues, notably on the
scope for WTO rules to modernize and improve customs rules and procedures in order to facilitate
legitimate border-crossing trade.  The Community, among others, has made a comprehensive
submission on this subject arguing the case for WTO rules on customs and other issues (G/C/W/122
of 22 September 1998).  Among other things, we have proposed that any future WTO rule-making inthis area should include commitments to introduce modern customs procedures and techniques, such
as pre-arrival processing of data and documentation; risk assessment techniques as opposed to
inspection of individual consignments, rapid, "green channel" release of goods of authorized traders
with a known compliance record; automated transfer of data from importers to customs
administrations and so on.  Several of these modern customs techniques are being promoted by theWorld Customs Organisation as part of the revision of the Kyoto Convention.
III. THE TRIPS DIMENSION
In the TRIPS field customs reform is obviously relevant.  Modern and simplified procedures
based on risk assessment and profiling not only facilitate legitimate trade but also permitimprovements in control and compliance levels, and overall efficiency of customs.  A recentG/C/W/149
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Symposium on Trade Facilitation held in the WTO in March heard several interesting examples from
both developed and developing countries of how simplifying and modernizing customs procedures
had not only benefited bona fide traders but also improved border control and enforcement, and
enabled customs administrations to reduce inciden ces of underdeclaration, leading to higher revenue
intakes.
The World Customs Organisation, in its own programme for Customs Reform and
Modernization (CRM), recognizes the positive relationship between trade facilitation, trader
compliance and improved customs controls, including controls on restricted goods.  We recall that a
recurrent concern of some WTO Members has been over how to ensure compliance with the border
enforcement provisions of the TRIPS Agreement against a background of static or dwindling
resources.  Introduction of modern, trade facilitating customs techniques – such as those introducedby several Latin American countries recently (and which were presented at the WTO March
Symposium), or those set out in the WCO's CRM Pr ogramme – enable customs to focus resources on
increasing detection levels of prohibited or restricted goods (e.g. IPR-infringing goods), ensure better
compliance with regulations and hence fewer offences, and improve the cost-efficiency of customs
administrations.  As we saw from examples given in the WTO Symposium, any additional resourcesneeded for training and reorganisation of customs can be recouped quite rapidly through higher rates
of revenue/duty collection, and gains in efficiency.
IV. CONCLUSION
The Community therefore considers that successful implementation of the border
enforcement provisions and Article 69 ("International Cooperation") of the TRIPS Agreement can
only be enhanced through measures to simplify and modernize customs procedures and to activate
international cooperation within an overall framewor k of trade facilitation.  This strengthens in our
view the already good case for developing, within th e WTO, appropriate trade facilitation rules which
would create momentum for customs modernization and reform.G/C/W/149
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ANNEX II
Issues Paper - Trade Facilitation  and Development
Points raised in the context of the CTD
Trade Facilitation and Development
The issues listed in subsequent paragraphs have been compiled by the Secretariat from
statements made by Members in the course of informal consultations as well as formal meetings in the
Committee on Trade and Development (CTD) on the item entitled, "Trade Facilitation:
Contributions By the CTD to the Work Programm e of the Council for Trade in Goods (CTG)".
These issues which were evident in the discussions were, however, neither negotiated nor do they
necessarily reflect common or agreed positions of Members of the CTD.  They are as hereunder:
1. Vigorous and continuing promotion of trade facilitation, in all its aspects, is an indispensable
element for any development policy.  The establishment of more rational trade procedures will lead tothe reduction of excessive costs, rational allocation of resources and encouragement of trade and
investment.  Although it was evident that all participants would gain from facilitation of trade and
there were overall positive benefits, nonetheless, there could be short-term costs.
2. Issues identified as central to trade facilitation in development include:
- simplification and greater transparency in official documentation, through simplification of
documentary requirements, simplification and/or harmonization of packaging, labelling,
standards and health/sanitary requirements, and transparency of information;
- increased transparency and predictability of legislation and regulations, through publication,
appropriate and stable application of such laws and rules and the minimization of
administrative discretion;  harmonization of tariff structures;
- streamlining of official controls and procedures, including Customs and international
payments procedures, by such means as pre-arrival Customs processing, "green-channel"
processing, self-assessment of trusted traders, advance duty settlement procedures, and
payment guarantees.  To this end, rapid release of goods was important for development and
encouraged investment;
- facilitation of trade procedures through increased use of information technology;
- harmonization and simplification of regulations relating to the transport and transit of goods,
including development and acceptance of appropriate international rules; and
- simplification, acceleration, harmonization, greater security in and lower-cost structures of
payments procedures;  strengthening of export credit facilities and mechanisms.
3. The Columbus Declaration (made at the United Nations International Symposium on Trade
Efficiency (UNISTE) in Columbus, Ohio, in 1994) identifies several areas in which measures couldbe taken to improve trade in many developing countries.  These areas are:  customs; transport;
banking and insurance; business information for trade; business practices; and telecommunications.G/C/W/149
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4. Trade should take advantage of new technologies to achieve simplification, standardization, and
harmonization of operations, documentation and practices.  Automation and electronic means of
delivery are important and strongly connected and complementary to trade facilitation.
5. The need for technical assistance in many of these areas is recognized, as is the work that is
carried out by a number of intergovernmental or business-related organizations.
6. Trade facilitation is a win-win situation and a factor in economic development.
7. Nonetheless, import and export procedures serve functions of social importance.  These include
the control of socially illicit or intellectual property  rights infringing goods at the border or to ensure
citizens safety.  The objective, therefore, would be to strike a balance between attaining accelerated
import/export procedures, on the one hand, and at the same securing important social functions, on the
other.
National Trade Facilitation Committees
8. Due to the diversity amongst countries, it is necessary in each country to begin by identifying key
issues in trade facilitation.  In this connection, National Trade Facilitation Committees may be
important as fora for identifying issues, exchan ging views, searching for solutions, and raising
awareness on trade facilitation-related issues.  Several considered that this identification of key issues
required emphasis and further analysis as did National Trade Facilitation Committees.
9. National Trade Facilitation Committees (sometimes referred to as National Trade Facilitation and
Transport Committees (NTTFC)) may serve to brin g together all the key parties and interests in
international trade, including users and providers of services in the public and private sectors.  Such
fora might thus include the ministries of trade, finance, transport and national planning, as well as
transport operators, banks, insurance companies, customs, etc.
The Private Sector
10. Trade facilitation requires synergy between the public and the private sectors, particularly in the
fields of transport, trade, finance and customs.  Trade facilitation needs to support private initiatives.
Conversely, the private sector needs to support trade facilitation.
11. The development of electronic trade and payments facilities may have important effects on trade
facilitation in developing countries.
International Cooperation
12. A variety of views were expressed on the need to  supplement rules on trade facilitation.  While
some felt that there was a  need for explicit WTO rules on trade facilitation, others were yet to be
convinced of the need for rules in this area, citing the second bullet of paragraph 21 of the Singapore
Ministerial Declaration that directed the Counci l for Trade in Goods to undertake exploratory and
analytical work, drawing on the work of other relevant international organizations, on thesimplification of trade procedures in order to assess the scope for WTO rules in this area.
13. A need has also been identified for closer cooperation between the WTO and other international
agencies operating in the field, including UNCTAD, UNECE, WCO, the IMF and the World Bank.
There is overlap and duplication in some trade facilitation activities of international agencies and the
need for a more integrated structure of coordination that identifies more clearly the work that can beundertaken by each organization, including the WTO.G/C/W/149
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For least-developed countries, it has been suggested that assistance for trade facilitation should be
carried out under the Integrated Framework  for Trade-related Technical Assistance.  However, not
only least developed countries can benefit from assistance in this field and technical assistance efforts
should not be limited only to LDCs.  The private sector can also contribute to technical assistance.
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