WORLD TRADE  
ORGANIZATION  TN/TF/W/28 
22 April 2005 
 
 (05-1655) 
Negotiating Group on Trade Facilitation Original:   English 
  
COMMUNICATION FROM BOLIVIA, MONGOLIA AND PARAGUAY 
 
  The following communication, dated 21 Apr il 2005, from the delegations of Bolivia, 
Mongolia and Paraguay, is being circulated in a dvance of the Negotiating Group meeting of 2-4 May. 
 
 
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TRADE FACILITATION: IMPROVEM ENT OF CERTAIN ELEMENTS  
CONTAINED IN GATT ARTICLE V 
  I. INTRODUCTION 
1. This proposal aims to clarify and improve GATT Article V with a view to further expediting 
the movement of goods in transit in accordance wi th Annex D of the July Package and the Doha 
mandate.  It intends to address issues that are of special relevance to landlocked Members and, 
therefore, important to all WTO Members, since trade facilitation will bring along global benefits. 
2. The following proposals are not exhaustive and we  reserve the right to make further proposals 
on this subject in the future. 
II. PROBLEM RELATED TO ARTICLE V 
3. Traders in a landlocked Member face different transit formalities with neighbouring Members 
and even between federal states of the same Me mber, generating unnecessary cost to comply with 
differing transit requirements for imports and expor ts.  These formalities include additional controls 
and checks as well as excessive security measures applie d on goods in transit.  Furthermore, excessive 
documentation requirements for transit are burdensome in terms of money and time for traders.  In 
addition, traders in a landlocked Member are faced  with unpublished and unreasonably high transit 
charges in neighbouring Members.  Finally, lack of effective cooperation and coordination among the 
landlocked Member and its neighbour ing Members makes it difficult to introduce more streamlined 
transit procedures. 
4. In importing or exporting goods, landlocked Members are at a disadvantage due to the fact 
that they have to transit the goods through the terr itories of their neighbouring Members.  Therefore 
they incur an additional cost of transport in comp arison with other Members who can ship their export 
goods without transiting another Member's territo ry.  Such disadvantages are exacerbated when 
landlocked Members face differing formalities for transit, burdens ome documentation requirements, 
unreasonably high transit charges, etc. as men tioned above, which generate an additional and 
unnecessary cost on traders in landlocked Members, esp ecially SMEs.  Such an increase in cost would 
inevitably make the price of exported goods  higher, making goods from landlocked Members 
uncompetitive in international mark ets.  For the neighbouring Members, if one Member introduces 
more streamlined transit procedures compared with  the others, the flow of transit goods would TN/TF/W/28 
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 inevitably concentrate on those streamlined trans it procedures, depriving the other neighbouring 
Members of their opportunities for economic deve lopment through the increased flow of transit 
goods. 
III. IMPROVEMENT OF CERTAIN ELEMENTS CONTAINED IN GATT ARTICLE V 
5. Solving these problems and streamlining transit procedures, within the scope of Members' 
legitimate policy objectives, would contribute to accelerate landlocked Members' economic 
development through the expansion of their trade.  Also, it would bring along benefits to developed 
Members whose enterprises keep productive structures in landlocked Members.  To achieve this goal, 
we propose the introduction of the following measure s, covering the issues of non-discrimination, fees 
and charges imposed with respect to transit, form alities for transit, documentation requirements for 
transit and cooperation among authorities and the private sector.  While the specific measures 
proposed by Members to date relating to the cl arification and improvement of GATT Articles VIII 
and X are also applicable for Article V, the pr oposed measures in this paper have been narrowed 
down to those that are considered to be vital for the further clarification and improvement of 
Article V: 
1. Non-discrimination 
-  Non-discrimination between modes of transport, origin and destination, carriers, 
 routes and goods  
 
 Ensuring non-discrimination between mod es of transport used for transit of goods, 
the origin or destination of goods in tr ansit, carriers of goods in transit, the route 
chosen and the particulars of the goods themsel ves. This is without prejudice to the 
commitments in force involving land locked Members. Transit Members are 
encouraged to provide landlocked developi ng Members with national treatment. 
 
2. Fees and charges imposed with respect to transit 
- Publication of fees and charges  
 
In order to have transparency and predict ability, publication an d broad diffusion of 
fees and charges imposed in respect of transit and prohibiting the collection of fees and charges with no legal basis.  Officials in charge must exhibit the legal instrument 
by which these fees and charges are im posed, when requested by a user. 
 
 - Periodic review of fees and charges
 
 
Periodic self-review of the appropriateness of  the amount and the number of fees and 
charges imposed in connection with transit.   For this purpose, a permanent review 
mechanism, such as a commission formed by representatives of the sectors involved, 
could be encouraged. 
 
 - Periodic meeting of neighbouring Members' authorities  
 
Periodic meeting of neighbouring authoriti es with the aim to discuss new fees and 
charges imposed in connection with transit as  well as their modification, prior to 
their entering into force. 
  TN/TF/W/28 
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 3. Formalities for transit 
 - Reasonable transit formalities and a periodic review  
 
Maintain reasonable transit formalities, with  a view to minimizing unnecessary delays 
or restrictions on traffic in transit.  Peri odically self-review transit formalities based 
on comments from the private sector and other parties. 
 
 - Use of international standards for transit formalities  
 
Use of international standards applied in most WTO Members to the extent possible, 
where other relevant international organiza tions already have set up international 
standards, with a view to minimizing unnecessa ry delays or restrictions on traffic in 
transit. 
 
 - Bonded transport regime  
 
Introduction of a bonded transport regime that would allow goods to be transited in a 
territory of a Member without payment of customs duties, transit duties or other charges, accompanied with a pr ovision of appropriate security. 
 
 - Simplified and preferential clearance treatment for perishable goods in transit
 
 
Introduction of a simplified and preferential treatment for perishable goods to be 
transited in a territory of a Member, in order for these goods to be able to leave 
customs and control areas as soon as possible. 
 
4. Documentation requirements for transit 
 - Reasonable transit documentation requirements and a periodic review  
 
Maintain reasonable transit documentation requi rements, with a view to minimizing 
unnecessary delays or restrictions on traffic in transit.  Periodically self-review 
transit documentation requirements based on comments from the private sector and 
other parties. 
 
 - Coordination of documentation re quirements among relevant authorities  
 
Coordination of documentation requirements  among all the authorities involved in 
traffic in transit, within each Member. 
 
 - Use of international standards for transit documentation requirements  
 
Use of international standards applied in most WTO Members to the extent possible, 
where other relevant international organiza tions already have set up international 
standards, with a view to minimizing unnecessa ry delays or restrictions on traffic in 
transit.  
 TN/TF/W/28 
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 5. Cooperation among authorities and the private sector 
 - Establishment of cross border cooperation scheme
 
 
Establishment of a cross border cooperati on scheme that would enable landlocked 
Members and their neighbouring Members to consult and cooperate on the issue of 
traffic in transit (including, to the ext ent possible, the establishment of a common 
border check point to minimize the possibility of duplicated formalities pertaining to traffic in transit). 
 
 - Public-private consultation
 
 
Providing opportunities for the private sector  to comment on the transit regime, with 
a view to minimizing unnecessary delays or restrictions on traffic in transit. 
 
IV. CONSIDERATION OF DEVELOPING MEMBERS' CONCERNS 
6. Special and differential treatment, technical a ssistance and support for capacity building, and 
cost implications of proposed measures are also important elements for the negotiations as agreed by 
Members in Annex D of the July Package, in particular for landlocked Members.  For the measures proposed above, granting a transition period in acco rdance with developing Members' implementation 
capacity or support/assistance based on the coordina tion among relevant international organizations 
(IMF, OECD, UNCTAD, WCO and World Bank) may be  taken into consideration.  In addition, 
enabling developing Members to consult the implem entation capacities together with experts from 
relevant international organi zations may be useful measures for Members to consider. 
7. In the area of technical assistance, the follo wing suggestions could be taken into account, 
based on the collaborative efforts among relevant international organizations, including the IMF, 
OECD, UNCTAD, WCO and the World Bank: 
- Improving measures to ensure impartial implementation of provisions and 
procedures in force; 
- Improving border operations and coope rating to fight against illicit trade; 
- Exchanging experiences on techniques to improve the control of bulk cargoes; - Conducting studies on transit related conditions with the aim of finding a way to 
minimize transit costs;  and 
- Transferring technology and info rmation to reduce the costs. 
 
 
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