./.WORLD TRADE
ORGANIZATIONWT/GC/W/190
1 June 1999
(99-2205)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
EC Approach to Trade Facilitation
Communication from the European Communities
The following communication, dated 28 May 1999, has been received from the Permanent
Delegation of the European Commission.
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1. Inefficient and unnecessary import and export procedures impede trade flows.  Industry
worldwide is looking to the WTO to simplify, harmonize and automate procedures, reduce
documentation, and increase transparency.  Gains will be especially great for small companies and
developing countries, for whom costs of compliance with procedures are proportionately higher anddeter exports.  Simple procedures also improve the investment climate and allow service sectors  like
transport and distribution to compete efficiently.  They help governments improve administration,
reduce operating costs, increase revenue and detect illicit transactions.  Against limited government
resources, but rapidly growing trade volumes, simplification is thus a must.
2. The WTO, as  the main organization for internatio nal trade, has a natural role in setting rules
in this field.  A rules-based approach will guarante e transparency and predictability for traders, ensure
political commitment to reforms, and ensure that appropriate measures are introduced.   A WTO
framework can provide confidence to the private sector and international institutions to invest in
necessary capacity building and assistance.  It will also ensure regional initiatives develop in the same
direction and reduce, not create new, barriers.  A WTO framework should also draw on, while not
duplicate, standards developed by other specialist organizations.
3. The Community therefore advocates developing a framework of WTO commitments to
simplify and harmonize trade procedures, that could encompass the following:
- Application of key WTO principles
Application to trade procedures of WTO principles of non-discrimination and
national treatment, together with transparency and the concept of proportionality – sothat procedural requirements do not create unnecessary obstacles.  Provisions should
be developed to ensure that small- and medium-sized companies fully benefit from
simplified procedures.
- Harmonization and simplification of documents and data
Commitments to simplify and harmonize trade and transport documents and data,
drawing on international standards, and re lying on commercial information.  This will
reduce delays and costs to traders, and assist introduction of automated procedures.WT/GC/W/190
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- Modern customs and management techniques
Commitments to progressively introduce modern customs techniques designed to
strengthen compliance and control while speeding release of legitimate goods, e.g.
pre-arrival processing, post-release payment, time-limits for release, facilities forauthorized traders, efficiency benchmarking, and cooperation with business, drawing
on the WCO’s Kyoto Convention.  Over ti me, PSI systems should be replaced by
functioning customs administrations operating to these principles.
- Automation and convergence of official controls
Commitments to progressively introduce automation and EDI – at the level of
customs and other agencies – to replace paper procedures for export and import.  This
will speed up transactions, improve controls, and facilitate "seamless integrated
transactions" between exporting and importing administrations.  Such provisions and
other simplification measures should also be considered in existing WTO agreements
such as import licensing, customs valuation etc.  Measures could also be developed tofacilitate convergence of official controls on border crossing goods, to reduce the
incidence of delays through separate, uncoordinated official interventions.
- Development
Coordinated capacity building is needed to strengthen human and physical
infrastructure and improve import and export management in developing countries.
Such capacity building should go beyond conventional WTO technical cooperation
and involve, within a broad framework of coherence, strategic cooperation between
key international organizations – notably UNCTAD, ITC, the World Bank, the IMF,and WCO.  It should also involve the private sector which benefits from
simplification and which constitutes the interface with governments.  Provisions on
development and capacity building should be integrated into a trade facilitation
framework.  Countries should be given not only support but also time to introduce
commitments.
- Other issues
Members could also consider the scope for provisions to ensure banking and payment
transactions are conducted smoothly to the benefit of traders.  In the longer term there
would be merit in reviewing multimodal rules affecting goods trade.
Conclusion
4. The task for WTO Members is to develop a balanced set of commitments in these areas that
correspond to Members’ needs and that will bring all Members benefits.  Those benefits should
accrue to large and small traders, and ultimately the consumer, through reduced costs and delays, andto governments and taxpayers through better controls, higher revenue intakes, more efficient
management, and a better investment climate.
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