RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/211
6 June 2000
(00-2215)
Council for Trade in Goods Original:  English
BASIC GATT/WTO PRINCIPLES AS APPLIED TO TRADE FACILITATION
Communication from the European Communities
The following communication, dated 5 June 2000, has been received from the delegation of
the European Communities.
_______________
I. INTRODUCTION
The mandate for the WTO is to assess the scop e for WTO rules on trade facilitation. The EC
is among those delegations that has argued for the development of such a set of WTO rules. This is
something the business community strongly supports in order to reduce and simplify import, export
and other trade procedures. Simplification and modernisation of procedures is also a growing need if
all WTO Members are to benefit from the advantages of the information society and the neweconomy.
In the preparatory process for the Seattle Ministerial Conference the EC suggested that
negotiations on trade facilitation should cover a number of key elements, including: the application of
basic GATT/WTO principles to trade facilitation measures; measures to reduce data anddocumentation requirements; measures to streamline and automate customs and other official
interventions; and measures to build capacity in developing countries.
The present note considers the first of these areas i.e. the application of basic GATT/WTO
principles to trade facilitation. The EU considers it self-evident that any future WTO rules should
integrate basic GATT principles in order to ensure the compatibility of such rules with existing WTO
rules, and to provide a balanced framework of rights and obligations. Such principles would in
themselves constitute an important part of any future framework of rules. We see this approach
already in agreements like the Agreement on Import Licensing Procedures or the Agreement on
Technical Barriers to Trade, both of which extend basic GATT/WTO principles such as transparencyand non-discrimination to their specific subject matter.
Below we identify some of the basic GATT/WTO principles that should be an integral part of
any future WTO commitments on simplified trade procedures.
II. TRANSPARENCY AND DUE PROCESS
One of the biggest concerns of the business community is the lack of transparency and
predictability of Members’ rules and regulations governing import and export procedures, in spite of
the provisions of Article X GATT. This lack of transparency creates delays and additional costs for
traders, and allows discretionary practises to flourish. Arbitrary or sudden changes in practices cause
further disruptions. The EC considers that a part of any future WTO facilitation régime could be toG/C/W/211
Page 2
expand upon the concepts in Article X and other WTO Agreements to provide, at a minimum, the
following:
• Availability of Information.  The requirement to publish or make publicly available, in a manner
that allows traders easily to access them, all rules, regulations and administrative guidelines
relating to official trade procedures and requirements. This should include all fees and charges.Any action taken which is not based on such a published legal requirement should, in principle, be
prohibited.
• Enquiry Point.  The requirement to have an enquiry point regarding trade procedures, of the kind
that is provided for in other WTO Agreements such as TBT. A single point is the only way in
which to ensure the necessary level of transparency and simplicity (because otherwise traders
would have to contact several different bodies), and would imply coordination between different
government agencies.
• Predictability. New procedures or changes to be published well in advance of introduction and
adequate time provided for comments/consultation with interested parties (as in the TBT and
Licensing Agreements).  Predictability would also be enhanced by a requirement to provide
traders with advance rulings on tariff classification, applicable duties and taxes, forms of customs
treatment etc, similar to provisions found already in the Agreement on Rules of Origin.
• Due Process.  Business has called on governments to establish a right of independent judicial or
administrative review of customs decisions. GATT Article X:3 already requires WTO Members
to install «judicial, arbitral or administrative tribunals for the purpose, inter alia, of administrative
action relating to customs matters», but this does not apply to agencies other than customs, and
arguably does not provide adequate assurances for traders (eg the need for procedures to be rapidenough to safeguard commercial interests). There may be merit therefore in developing further the
basic concept in Article X:3, and we could begin by studying the way in which this provision has
been interpreted and applied by WTO Members.
• Other Measures To Improve Transparency  A number of substantive trade facilitation measures
would also further improve transparency. Thes e include the «single window» concept, and the
concentration of official controls in the hands of one agency, or coordination of controls in time
and place (it being easier to understand a set of procedures applied in one time and place as
opposed to multiple procedures applied differently by different agencies); simplification and
reduction of the amount of data and information required (without this, transparency is difficult to
achieve); use of international standards; and automation (which makes it much easier to provideand access information).
III. NON-DISCRIMINATION
Non-discrimination is the cornerstone of the GATT and the WTO and as such should be a
basic obligation in any trade facilitation framework, so  as to ensure that all traders and their goods are
treated in a fair and equal manner. In the EU ’s view, the non-discrimination principle would be
applicable to import, export and customs procedures in a variety of circumstances.
• To ensure that all traders and consignments that  comply with the requirements of a Member are
treated uniformly and impartially. All traders should be subject to the same substantive
procedures and requirements, and subject to the same rights and obligations, where the same
conditions prevail. Such provisions would not, of c ourse, preclude differential treatment of traders
or consignments on the basis of objective  criteria used in areas such as risk assessment.G/C/W/211
Page 3
• To ensure that import, export, customs and other trade procedures are designed to ensure equal
access to international trade for all enterprises including small or medium sized enterprises.  Thiswould mean, for example, that measures that privileged certain traders (authorised traders,
premium procedures, other means to provide less burdensome procedures for traders with a good
track record of compliance), or requirements for IT-based systems, should be non-discriminatory
and not act to exclude certain kinds of companies.  Provisions of this kind will help to reduce the
risk of practices which would favour or privilege certain companies in a discretionary manner.
• To ensure that procedures applied to transit, import and export do not discriminate between
different modes of transport, taking account where necessary of GATS commitments.
A prime example of how the principle of non-discrimination can be applied in detail to trade
procedures can be found in the Agreement on Import Licensing Procedures. The same approaches
could be applied to other trade procedures not yet under the scope of WTO rules.
IV. THE PRINCIPLE OF «LEAST TRADE RESTRICTIVENESS»
The concept of least trade restrictiveness is found throughout the WTO Agreements and is a
key to ensuring that any restrictions on trade imposed for what are considered legitimate reasons are
kept to the minimum necessary to carry out those legitimate objectives.  This means that disciplinesmust be established which apply both to the objectives themselves (i.e. to ensure that the stated
objectives are indeed legitimate) and the procedural means to apply them.
One of the key objectives of WTO rules on trade facilitation would be to ensure that import,
export and customs procedures are indeed limited to the absolute minimum needed to carry out publicpolicy objectives.  Translated into practical terms, the EC would see this principle being reflected in,
for example, the following ways (there are obviously others):
• Identification of what could constitute the legitimate objectives that would underlie the imposition
of procedural requirements.
• General requirements to reduce formalities and procedures to the minimum and a requirement to
continually review the procedures and their underlying policy objectives in order to ensure theycontinue to represent the minimum level of restriction needed.  GATT Article VIII recognises the
need to reduce formalities to the minimum but ne ither requires it nor indicates how it could be
done.  A substantial part of any rules on trade facilitation would be to do this.
• Requirements to reduce and simplify trade and transport data and documentation to the minimum,
commensurate with legitimate official requiremen ts.  Any commitments in this regard should,
again, identify what would be legitimate and what would not be.
• Use of relevant international standards and inst ruments for documentation, data, IT based systems
etc, such as those developed by the UN, WC O, the ICC and others.  As in other WTO
Agreements, it may be possible to recognise that application of agreed international standardswould create the presumption of no unnecessary restriction on trade.
• Measures to simplify and reduce as far as possible, the procedural burden on traders of customs
and other official interventions, including the use of pre-arrival processing of consignments, rapidrelease of goods, auditing, granting of premium procedures or fast track facilities for authorised
traders, concentration of official controls in the hands of a single agency, use of automation andIT in customs processing etc.  These are all ways of minimising restrictions on trade.  As notedG/C/W/211
Page 4
before, any rules in these areas should be designed with the particular needs of small and medium
sized enterprises in mind.
The concept of proportionality is also relevant to trade facilitation, including in circumstances
where the objective of least trade restrictiveness is either not possible to attain (eg due to resourceconstraints),or where it is not relevant. One familiar example is the requirement that all fees and
charges be commensurate with (i.e. proportionate to) the service rendered. Another would be that
deposits, bonds or other securities be not unreasonably required, and when they are strictly necessary,
be readily available and on reasonable terms proportionate to the risk being covered.
V. BETTER INTEGRATION OF DEVELOPING COUNTRIES IN THE
INTERNATIONAL TRADING SYSTEM
The need for positive efforts in favour of Developing Countries is mentioned in the preamble
to the Marrakesh Agreement as one of the fundamental principles underlying the establishment of the
WTO. This principle should also guide any futu re work aiming at developing rules on trade
facilitation.
• Special and Differential Treatment (S&DT)  provisions exist in GATT/WTO, eg to give
developing countries extra time to comply, obligations (either hard rules or best endeavours) ondeveloped countries to treat developing country goods and services in a particular way and non-
reciprocity in terms of developing countries’ market access and other commitments.
In the area of trade facilitation, S&DT could result inter alia  in transitional periods for assuming
commitments with significant resource implications. A distinction should be made between
commitments which could require time and resources for compliance, and commitments whose
introduction would not be resource intensive or where any outlay is recouped through efficiency
gains or increased revenue. For example there is no reason why a non-discrimination requirement
or a commitment to abolish unnecessary red tape should be subject to a lengthy transitionalperiod.
• Positive Measures  should also be taken by developed country Members to ensure that their
import and export formalities facilitate the trade of developing countries. This could coverprovision of information, or additional time for consultation in areas of interest to developing
country traders.
• A Programme of Capacity Building in Developing Countries. It seems generally accepted that
a part of any WTO trade facilitation agreement would be parallel measures to build capacity,
involving not only WTO but cooperation with bilateral donors and other international bodies, in
particular UNCTAD, the World Bank and IMF, and the WCO.  Such assistance would help
developing countries meet the requirements in question, while the commitments themselves
would constitute targets of that assistance.
VI. CONCLUSION
The above elaboration of relevant WTO principles is not necessarily exhaustive. Other WTO
Members may wish to supplement it with other WTO principles and there may be different views on
their scope of application. The EC believes however that the argument for applying WTO principles
to trade procedures is clear, and that there is a genuine need to develop rules that would bring suchprocedures firmly inside the GATT/WTO framework. The EC submits this paper as a contribution to
the mandate of the group which is to «assess the scope for WTO rules» to simplify trade procedures. G/C/W/211
Page 5
The EC expects to make further contributions on other aspects of trade facilitation in future
discussions in the Council on Trade in Goods.
__________