WORLD TRADE
ORGANIZATIONG/C/W/465
10 June 2003
(03-3015)
Council for Trade in Goods Original:  English
INTERNATIONAL ARCHITECTURE ON TRADE FACILITATION
THE WTO AND INTERNATIONAL ORGANIZATIONS AND FRAMEWORK
Communication from Japan
The attached communication, dated 6 June 2003, has been received from the Permanent
Mission of Japan.
_______________
1. Introduction
This is the fourth paper prepared by Japan, which aims at contributing to the discussions of
the Council for Trade in Goods.  This paper attempts  to set out a lot of activities done by international
organizations in the field of trade facilitation1, and to indicate the reasons why the WTO needs to
engage in.  Japan recognizes the importance of trade facilitation when considering its merits in termsof the expansion of trade and investment, of improving government efficiency in collecting revenue
and in controlling cargoes, all of which have been presented in the previous Japanese contribution
paper
2. Any approach which improves trade procedures and their efficiency should be taken seriously
to realize the benefits of trade facilitation.
2. Three pillars of approach
One can find several different approaches to materialize the merits of trade facilitation.  Yet,
when looking more closely, it seems possible to sort them into three separate pillars of approach,
namely (a) the action programme; (b) capacity building; and (c) rule setting.
These three pillars are specifically distinct from each other.  Each pillar has its advantages
and disadvantages, which are also different from one another.
The first pillar is action programme, which is non-binding approach that enables participants
to promptly set out fairly idealistic objectives without any serious concerns of failure. This approach
needs to keep motivations of participants alive th roughout the whole process. Otherwise, due to a lack
of binding obligations and high level objectives, the realization of objectives could become seemingly
long-term, and one may even result in  frequent ly witnessing a continual failure to meet the
objectives. In short, whatever the achievements may be, they will no doubt be fragile since
participants are free to  withdraw them at any time.
The second approach is capacity building, which could contain both technical assistance and
other forms of assistance. This would indeed help countries to improve their trade procedures and
                                                     
1 G/C/W/80 and G/C/W/80/Add.1 present several activities pertinent to trade facilitation conducted by
other international organizations.
2 G/C/W/401 "Improvements of GATT Article VIII" was submitted to the July 2002 meeting of the
Council for Trade in Goods for discussion.G/C/W/465
Page 2
expand their capacity.  The efficiency of capacity building might, however, be low if there is no
motivation or any benchmark, as explained in the previous Japanese contribution3.
The third pillar is rule setting which provides legal stability and predictability.  As one always
faces the risk of a lack of capacity for complying with the rules, the objectives tend to be limited to
the challenging but achievable ones, and the process of agreeing upon the rules tends to be lengthy.
Due to the binding nature of rule setting, a follow-up framework to ensure that participants are in
conformity with the rules would be necessary.
Chart 1:  Three pillars
Three pillarsRule settingRule setting
WCO, WTO, 
FTA
CapacityCapacity
BuildingBuilding 　　
UNCTAD, 　　
WCO, WB 　　　ActionAction
ProgrammeProgramme
APEC,　　　
ASEM　　
complementary
synergycomplementary
synergycomplementarysynergy
Trade FacilitationTrade Facilitation
3. Complementarity and synergy
As mentioned above, the three pillars have both their advantages and disadvantages, one pillar
could complement others, and a synergy effect can be expected when the pillars are to work together.
For example, the achieved and achievable objectives in the action programme could be strengthenedby adding legal stability and predictability when set as the rules.  As for capacity building, this would
build up a participant’s capacity to observe the rules and its motivation to set objectives.  High
objectives, such as long-term objectives in the action programme, might indicate a future set of rules
to be established.  The objectives in the action programme and in the rules would become tangible
benchmarks t o improve the efficiency of capacity building and the motivation of participants to build
up their capacity.  The expected synergy effects are wide; therefore the lack of one pillar would
undermine the fruit of the benefits of trade facilitation.
                                                     
3 G/C/W/420 "Technical Assistance – Trade Facilitation" was submitted to the October 2002 meeting
of the Council for Trade in Goods for discussion.G/C/W/465
Page 3
Chart 2:  Examples pillars
Inadequate capacity for participation 
and implementation
Setting benchmarkImproved capacity for 
participation and 
implementation
Capacity
Programme
Confidence buildingAction
Programme
Rule setting
Improved motivation for both activities
4. Comparative advantages of international organizations
Every international organization or framework ha s its own establishment agreement, or terms
of reference, that characterizes the organizational expertise and raison d’etre .  When considering the
complementarity and synergy effects, it is quite important to emphasize that the relevant international
organizations and frameworks should work within  their expertise in a cooperative manner.  With
regard to the WTO’s expertise, it is to set multilateral rules on trade regulations and the institution,and it is less likely that it has comparative advantages in the action programme or in capacity building
(besides capacity building on the participation of ne gotiations).  When considering complementarity
and synergy, it is hardly appropriate to argue that improvements in infrastructure, technical assistance
or computerization/EDI alone would be sufficient to  fully realize the benefits of trade facilitation.
The absence of rule setting might lessen the efficiency and output of the action programmes andcapacity building.  In this context, the WTO must contribute its own expertise.  The relationship
between the WTO, the APEC, the UNCTAD and the World Bank could thus be sorted among the
three pillars.
5. Sectoral approach and horizontal approach
The rule setting approach could cover the technical rules and standards that are set by
international specialized organizations, such as those in the field of customs procedures, port
procedures, or electronic messages.  It could also cover the cross sectoral rules, such as those
contained in the WTO provisions.  In this context, the division of labour, based on the organization’s
expertise , is vital.  International specialized organizations, such as the WCO and the UN/ECE, could
establish, maintain and diffuse (including the providing of technical assistance) sector-specifictechnical rules and standards.  The WTO could provide those international specialized organizations
with a common direction for their work, as well as a framework to address cooperation and
coordination, such as through a single-window, among the different sectors and international
specialized organizations.  By specializing themselves in an area where they have to be (i.e. where
they have expertise), the work of trade facilitation will become efficient.  In this context, the work ofthe WTO on trade facilitation should not narrowly limit the scope to customs procedures alone.
Members should recall that Article VIII of the GATT 1994, for example, carefully uses a general
terminology, such as formalities connected with importation and exportation.  This has been rightlyG/C/W/465
Page 4
pointed out by the European Communities4.  In addition, as the sector-specific issues tend to be
technical and the expertise belongs to international specialized organizations, they are unlikely to
generally exist in the WTO; thus the establishment of a WTO Trade Facilitation Technical
Committee, which could be comprised of all Members and the international specialized organizations,
might be an appropriate framework to review the technical aspects of the possible WTO rules.
6. Regional initiatives and multilateral initiatives
The evolution of a regional trade framework, either binding or non-binding, attracts much
more attention than before, and trade facilitation is not an exception in this movement.  The recent
binding of regional agreements, such as bilateral free trade agreements, tends to have provisions on
trade facilitation. Non-binding regional frameworks , such as the APEC and the ASEM have a strong
record of commitment to trade facilitation initiatives.  Some of the reasons for evolving towards a
regional approach might also be applicable to trade facilitation, namely, a regional framework enables
participants to establish faster a higher quality of rules.  However, regional approaches always contain
a risk of comparative discrimination to non-participants and a possible discrepancy among the
different regional approaches.  The WTO, as the international organization setting universal rulesapplicable to different regions, can complement the deficiencies of regional approaches by indicating
a common direction.  Regional approaches would, in turn, provide the WTO with several valuable
experiences, which could act as bases for possible multilateral common disciplines in the future.
Chart 3:  Regional and Multilateral initiatives
MultilateralRegionalBilateralNationalCapacity Building APEC’s IAP
FTA, Economic 
Partnership Agreement
APEC’s CAP 、TFAP
ASEM’s TFAP
WCO（Kyoto Convention ）
WTO（preparatory work ）e.g.
Complementarity, Synergy
7. Consideration of possible WTO rules and existing international commitments
The idea of simply picking out pieces of existing international commitments should be
carefully addressed. This approach can be observed in the TRIPs Agreement when addressing some of
the provisions of the WIPO agreements.  The reason for this is as follows: firstly there should be a
division of labor between the WTO and the international specialized organizations, the former
addressing universal disciplines and the latter addressing technical rules and standards.  Secondly,
                                                     
4 G/C/W/394 (the relevant part is also reproduced on page 11 of the Secretariat's compilation paper
G/C/W/434).G/C/W/465
Page 5
there is a risk that if the WTO picks out some pieces  of an agreement to be incorporated in a new rule,
countries would have less motivation to subscribe to the full existing agreement in question. The
importance of using internationally-accepted standards is commonly recognized, in order to reduce
the business trader’s burden to comply with trade pr ocedures.  The EC also points this out in its
previous contribution5.   One of appropriate approaches is to address a soft relationship between the
possible WTO rules on trade facilitation and the existing international commitments. An example of
such relationship can be found Article 2.4 of the TBT Agreement which is reproduced as follows:
“TBT Agreement
“Article 2: Preparation, Adoption and Application of Technical Regulations by Central Government
Bodies
“With respect to their central government bodies:
…
“2.4 Where technical regulations are required and relevant international standards exist or
their completion is imminent, Members shall use them, or the relevant parts of them, as a
basis for their technical regulations except when such international standards or relevant parts
would be an ineffective or inappropriate means for the fulfillment of the legitimate objectives
pursued, for instance because of fundamental climatic or geographical factors or fundamental
technological problems.”
8. Concluding remarks
As described above, WTO Members should recall the WTO’s characteristics and expertise.
The key words are: rule setting, cross sectoral and multilateral, which are not to replace the terms
capacity building or action programme, but rather, are to strengthen them.  As such, the WTO has a
unique role and it is unlikely that there exists much room for duplication with other organizations.
__________
                                                     
5 G/C/W/394 (the relevant part is reproduced on page 12 of the Secretariat's compilation paper
G/C/W/434).