WORLD TRADE  
ORGANIZATION  TN/TF/W/46 
9 June 2005 
 
 (05-2368) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM THE EUROPEAN COMMUNITIES 
  
 The following communication, dated 8 June 2005, from the Delegation of the European 
Communities, is being circulated in advance of the Negotiating Group meeting of 13-14 June. 
 
 
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IMPROVEMENTS TO GATT ARTICLE VIII ON FORMALITIES AND  
REQUIREMENTS CONNECTED WITH IMPORTATION AND EXPORTATION  
AND RELATED PROPOSALS ON SPECIAL AND DIFFERENTIAL TREATMENT  
AND TECHNICAL ASSISTANCE 
  
EXECUTIVE SUMMARY 
 
 This submission is in two parts. First, it  sets out why and how GATT Article VIII could be 
improved and made more operational in order to simplify international trade procedures. Secondly, it 
addresses the future modalities for addressing related special and differential treatment and technical 
assistance. The proposals in the submission cover: 
 
PART 1:  Proposals to Make GATT Article VIII More Operational 
 
- General commitments reflecting WTO principles : 
 (1)  Non-discrimination 
(2)  Avoidance of  unnecessary barriers to trade  
(3)  Periodic review of procedures and requirements  (4)  Use of international standards  
 
-  Provisions relating to document and data formalities :  
(5)  Simplification and reduction of documentation and data requirements  
(6)  Introduction of a uniform customs code or aligned customs legislation 
 (7)  Single, one-time presentation of all docu ments and data requirements, to the extent 
possible 
 
- Provisions relating to customs and rel ated import and export procedures : 
(8)  Simplified and standardised procedures and standard processing times (9)  Non-discrimination in rela tion to modes of transportation 
(10) Phasing out mandatory use of customs brokers (11) Simplified customs release and clearance procedures (12) Use of Risk analysis and introduction of authorised trader systems 
(13) Convergence and co-ordination of official controls TN/TF/W/46 
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 (14) Application of objective criteria for tariff classification 
(15)  Elimination of pre-shipment inspection 
  Proposals on GATT Article VIII provisions on fees and charges have been treated in an earlier submission from the EC and Austra lia (ref. TN/TF/W/23 of 18 March 2005). 
 
PART 2:  Special and differential treatment and technical assistance 
 
 These proposals are for their part aimed at ensu ring that developing countries are helped in 
implementing progressively any commitments that, however beneficial per se , need time or resources. 
Specific ideas are put forward for (1) targeted sp ecial and differential treatment, (2) transitional 
periods and (3) technical assistance and capacity building measures. 
 
I. INTRODUCTION 
1. The WTO's work on Trade Facilitation in the l ast few years has led to agreement on the 
benefits of measures to simplify import and export procedures. Members have stressed the importance 
of trade facilitation in increasing their capacity to trade and better integrate into the international 
economy, and recognized the complementary nature of facilitation measures and the improvement of 
border controls and revenue coll ection. The business community – large companies and SMEs, traders 
in both developed and developing regions, and representatives of both goods and services sectors – 
have all emphasized the need to simplify trade proc edures so as to reduce costs and delays, as well as 
to improve the investment climate. Small traders ar e in a particularly strong position to benefit from 
facilitation measures, since excessive data and documentation requirement s or burdensome border 
procedures impose on them disproportionate manpower  and resource demands, and act as a fixed cost 
regardless of trade volumes. The benefits for governments of simpler procedures are also 
considerable: trade facilitation enables cost savings , greater efficiency of border management, and 
higher rates of revenue collection.  
2. Article VIII is quite broad in scope, extending to  all fees and charges of whatever character, 
formalities as well as requirements imposed by governments in relation to importation and 
exportation. In other words it is not limited simply to procedures but also to requirements applied by 
governments to trade transactions. Yet, despite th is broad scope, GATT Article VIII is not fully 
operational. While Article VIII:1(c) recognises the need for
 minimizing the incidence and complexity 
of import and export formalities and for decreasi ng and simplifying import and export documentation 
requirements, it does not require  any such reduction nor indicates how to achieve it. The absence of 
any operational WTO requirements to simplify or reduce formalities – notably unjustifiably burdensome customs procedures – remains a signifi cant weakness in the WTO rule book which, as 
tariffs are progressively reduced, has become more and more in need of attention.  
3. The EC therefore proposes to clarify and improve GATT Article VIII to make it more 
effective and operational in the same way that, in recent years, Members have made more specific and operational GATT Articles and provisions relating, for example, to customs valuation, import 
licensing and technical barriers to trade. The trad ing community and many Members are keen to see 
the establishment of a set of WTO provisions on GATT Article VIII that would set all WTO Members 
on an agreed path of modern and simplified pro cedures, taking full account of international standards 
and work done in other international organizations.  
4. In making proposals, the EC seeks to ensure th at basic GATT principles are applied to trade 
facilitation, that any measures proposed restrict tr ade as little as possible – without obviously in any 
way affecting the right of Members to achieve ot her legitimate policy objectives, related for example 
to national security, health, safety and the envir onment – and that as far as possible the standards 
drawn up by other international organizations are used.   TN/TF/W/46 
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 PART 1:  PROPOSALS TO MAKE GATT ARTICLE VIII   
MORE OPERATIONAL 
 
 A. S
UGGESTED GENERAL COMMITMENTS  
1. Non discrimination in the design, application and effect  of export and import procedures and 
formalities imposed on the goods of all Members.  
Comments: The applicability of GATT Article I to all import and export formalities may be worth underlining, 
as is the case in for example the TBT Agreement, th e Agreement on Import Licensing Procedures and other 
similar sets of WTO rules. The principle of non-discrimination should not of course interfere with Members' 
rights to treat consignments differently according to objective risk assessment criteria . 
 
2. Avoidance of unnecessary barriers  to trade in the design, application and effect of import 
and export procedures, and in particular to ensu re that such procedures do not unduly slow down the 
movement or release of goods. This would be done  by ensuring that import and export procedures 
shall not be more trade restrictive th an necessary to fulfil legitimate objectives . 
Comments: A basic discipline to ensure that regulatory authorities – customs etc. – consciously make efforts to 
design and implement procedures that are in proportion to the objectives sought, that take account of the needs 
of traders, and that facilitate trade as far as possible . 
 
3. Periodic Review.  A provision whereby Members should no longer maintain a procedure or 
requirement if the circumstances giving rise to its introduction no longer exist or if the changed 
circumstances or objectives can be addressed  in a less trade restrictive manner. 
Comments: A commitment modelled on already existing prov isions in e.g., the TBT Agreement, that requires 
public authorities regularly to review their regulations with a view to introducing better and less burdensome 
practice.     
 
4. Use of relevant International Standards and Instruments . Members should agree to use 
international standards and instruments as the basis for their import and export procedures and 
requirements, except where such international stan dards would be an ineffective or inappropriate 
means to fulfil the legitimate objectives sought.  
Comments: Use of international standards ensures a common basis for the measures applied by different WTO 
members, which in turn improves transparency and pred ictability, and lowers costs fo r traders for example in 
preparation of trade documents and data. Obviously, if each Member or regional grouping were to introduce 
their own (varying) standards, the result would be a pr oliferation of incompatible requirements in different 
markets, adding to traders’ costs. It will be desirable to identify and agree which international standards and 
instruments should be referred to, the circumstances and on what basis Members can deviate from them, and to 
decide how to take account of subsequent amendment or updating of such standards and instruments . 
 
B. SUGGESTED PROVISIONS ON DATA AND DOCUMENTARY REQUIREMENTS  
 Excessive and non-standardized documentation and data requirements for border crossing 
trade are, according to representativ es of the trade community, an important obstacle to trade. Small- 
and medium-sized companies are particularly affected by unduly burdensome procedures, since they drain manpower and resources which SMEs cannot afford to give up. Evidence suggests that 
excessive export procedures are as troublesome and costly as excessive import bureaucracy. Many such requirements – which have accrued over tim e – are unnecessary and can be simplified and 
reduced. One could therefore consider a number of  ways to make these requirements more focussed TN/TF/W/46 
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 and simple and in so doing create a more hospitable cl imate for international trade. In particular, there 
would be merit in improving GATT Article VIII by commitments such as the following:  5. Commitment by Members to simplify and  reduce documentation and data requirements  
to the absolute minimum,  consistent with the need to enforce legitimate policies, and in doing so to 
use international standards as a basis for documenta tion and data requirements (both for format and 
content of documents and data). The data set de veloped within the WCO data model, UN EDIFACT 
(UN Electronic Data Interchange for Administratio n, Commerce and Transport) and the UN Layout 
Key could be identified as basic reference points/ standards in this regard, and WTO Members may 
wish to identify others. Further simplification c ould also be achieved where WTO Members identify 
the cases in which copies and not originals of docum ents are accepted. Simplification could also be 
served by permitting the acceptance routinely of re levant commercially-available information.  
Comments: Through the above proposal Members would ma ke a commitment to begin to simplify procedures, 
basing their domestic efforts on the international instruments of the WCO and UN and possibly other bodies.     
 
6. Introduction by each WTO Member, or customs union (between two or more Members), of a 
uniform customs code  or aligned customs legislation, as well as a single import and export 
declaration, administrative message or data set.  
Comments:  It is essential for transparency, and for effic ient administration of customs to have a coherent body 
of legislation, regulations etc. Trad ers are keen to have simple, standardized  documents or data sets, as this 
reduces errors and processing times. 
 
7. Progressive implementation of the principle of a single, one-time  presentation to one 
agency, normally the customs,  of all documentation and data re quirements for export or import, 
subject to any exceptions to be identified.  Th is should be a best endeavour provision and the 
commitment would be to making progressive effo rts, rather than to any fixed deadline.  
Comments: The concept of a Single Window for filing of data/documents is an important facilitation measure, 
enabling traders to avoid multiple and time-consuming procedures, but flexibility will be needed – especially for 
some developing countries since Sing le Window operations, however desi rable,  take time to implement. 
 
C. SUGGESTED PROVISIONS ON CUSTOMS AND RELATED IMPORT AND EXPORT PROCEDURES  
 Cumbersome border crossing procedures act as a brake on trade and investment, and hamper 
exports as well as imports, in partic ular for small-and medium-sized companies. Simplification of 
trade formalities and requirements is an important and low-cost way to improve trade and investment 
flows. It has also been shown to result in higher revenue collection rates, be tter enforcement of border 
controls, and greater efficiency and morale of cu stoms administrations. The EC proposes, therefore, 
the establishment of a number of commitments to  simplify import and export procedures, which 
would be applicable to all Members. These co mmitments would make GATT Article VIII:1(c) – 
which calls for the simplification of procedures – more operational. The provisions proposed below 
would again steer WTO Members in a common direc tion, through the progressive adoption of simpler 
and more internationally-standardized procedures dr awing on good administrative practices gaining 
currency worldwide. The following proposals are therefore made: 
 8. Progressive implementation of simplified and standardized import and export 
procedures, based on international standards and instru ments, including the WCO Kyoto Convention. 
As part of such a provision, the EC proposes that each Member would establish and agree 
progressively to reduce, its domestic standard processing times  for goods release and clearance, 
based on a common instrument such as the WCO Time Release Study.  TN/TF/W/46 
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 Comments: The EC does not think that Members should be bound via WTO formally to adhere to instruments 
(such as the Kyoto Convention) negotiated elsewhere, but suggests that such instruments be implemented in substance or be given a privileged status, as is the case with standards in other WTO agreements.  Standard 
processing times can function as useful benchmarks. Publication of standard processing times would ensure 
that such times are in the first place established, and then efforts made to reduce them. Relatively high risk 
consignments would naturally tend to have longer processing times than the standard.  
 
9. A commitment to non-discrimination in terms of  requirements and procedures applicable to 
like products irrespective of their mode of transportation .  
Comments: Procedures for different modes of transportation are unlikely to be identical but they should not give 
rise to discriminatory treatment. 
 
10. Non-discriminatory rules should apply in respec t of licensing of customs brokers, together 
with an undertaking to phase out over time any requirements for the mandatory use of customs 
brokers . 
Comments: Regarding customs brokers, in many countries they perform the all important role of interface, 
between the trader and the administration, particularly for SMEs. There is, however, concern from traders over 
the role and influence of brokers and the fact that in many countries their use is mandatory. Licensing of 
brokers should be carried out transparently and fairly, so as to enable competition, and companies should, if they prefer, be able to manage the transaction themselves. 
 
11. A commitment by each member to introduce simplified customs release and clearance 
procedures  including the possibility of:  pre-arrival processing of documentation; rapid release 
procedures based, for example, on the submission of  a simplified document and mechanisms for post-
release reconciliation of documentation and duties pa yable; the possibility of customs clearance or 
relevant export control at an impor ter's or exporter's premises; and th e possibility of periodical audit 
and duty payment rather than duty payment on the basis of individual transactions.   
Comments: Regarding simplified release and clearance procedures, most WTO Members are now starting to 
operate different forms of simplified procedure. Given th e economic importance of such procedures, it seems to 
the EC essential that they be reflected in terms of WTO commitments so as to reduce costs and delays and bring 
greater predictability to traders, although without being too prescriptive. Simplified procedures do not 
necessarily require computerized cust oms systems although in some cases th is makes them easi er to operate. 
Having said this, customs automation is an important facilitation tool, aiding, in particular, higher rates of 
tariff collection and enforcement,  the implementation of simplified release procedures delinked from duty 
payments, and the coordination of official controls.  Al most all developing countries have in the past few years 
introduced automation (e.g., using UNCTAD’s ASYCUDA programmes), increasing efficiency and trade flows, 
and rapidly recouping investments.  
 
12. Use of risk analysis  methods based, as appropriate, on rele vant international standards and 
practices. Risk analysis procedures should not be u sed as, or have the effect of creating, disguised 
obstacles to trade. They should be objective and appl ied for legitimate purposes. In addition, it would 
be useful if Members were to make a commitment to introduce systems of authorised traders , using 
transparent, objective and non-discriminatory criteria. Such systems should not exclude the participation of small- and medium-sized enterprises.   
Comments: In practice no WTO Member can physically inspect 100% of all consignments and should not. Risk 
analysis procedures allow customs etc to concentrate their limited resources on targeting the most suspect shipments while facilitating trade for co mpliant traders. As trade flows expand  but customs’ resources shrink or 
remain static, such selectivity becomes even more es sential. The proposal on authorized traders would 
encourage all Members to implement procedures that identify and reward efficient and compliant traders with additional facilitation measures. Given that so far such arrangements are being mainly used by larger 
companies, it seems crucial to us to ensure that such systems be equally available to (equally compliant and 
trustworthy) smaller traders. TN/TF/W/46 
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 13. Convergence of official controls  in a "one-stop shop" . Where documentary or physical 
verification of consignments by more than one ag ency is necessary this should be carried out at a 
single place and one time only, to the extent possible,  and at hours that meet the needs of traders.  
Comments: A major concern of traders relates to excessive delays in getting goods rele ased due to the absence 
of coordinated border controls betw een different agencies within a Mem ber. Developing co untries have drawn 
attention to the incidence of multiple inspections for different control purposes in their major export markets. The EC believes that Members should make a commitm ent, towards greater coordination of controls, 
recognising that developed countries must lead the way here, and that fo r developing countries this may take 
some time to accomplish.    
  
14. Requirement to apply  objective criteria for tariff classification of goods .  
Comments: This could be achieved thro ugh the use for all trade by all Me mbers of the WCO HS Convention: a 
further international standard. 
 
15. Elimination of  Pre-Shipment Inspection Arrangements .  
Comments: Official PSI systems impose considerable burdens on business and are costly to governments. 
Experience suggests that in some cases, far from being a temporary measure pending improvements to domestic 
customs services, they are tending to become a semi-perma nent alternative. The EC suggests that Members set a 
deadline for the elimination of PSI where it substitutes for functioning customs services, and use the time available to ensure that the domestic customs administrations become more fully functional and PSI 
progressively phased out. The EC also suggests that during the transition period Members commit not to 
introduce new PSI arrangements.  
 
 
PART 2:  SPECIAL AND DIFFERENTIAL TREATMENT AND  
COORDINATION OF TECHNICAL ASSISTANCE 
 
 The biggest long term beneficiaries of simplif ied procedures should be developing countries, 
whose future trading performance a nd attractiveness to foreign invest ment will improve if they can 
provide and maintain a simple, transparent tradi ng environment. By entering into commitments, 
developing countries can go a long way towards promoting their integration in the global trading system. Failure to do so can have the opposite effect. Currently it is their typically small- and medium-sized enterprises which suffer more fro m burdensome export and import procedures and non-
transparent and excessive duties and taxes. Simplif ication can go a long way in facilitating South-
South trade, as well as helping North-South trad e. However, simplification cannot be achieved 
overnight and any provisions on GATT Article VIII should recognize the needs and difficulties faced 
by developing countries, especially the least devel oped, and provide practical means to assist their 
development.   Taking in account the views expressed on this i ssue over the last three years, the EC suggests 
that any future WTO provisions should therefore incl ude a range of special and differential treatment 
provisions, including less onerous commitments for poor er developing countries, transitional periods 
for the assumption of commitments, and provisions regarding improvements in the supply of technical assistance. Each of these elements is set out below.  1. Targeted special and differential treatment 
1. As noted throughout this proposal, certain comm itments may imply resources – at least in the 
short to medium term – and may thus be beyond the means of least-developed countries and possibly 
other low income countries.  This is notably the case with those simplified procedures that are easiest 
to apply via automated systems, as well as tho se proposals that presuppose broader customs reform.  TN/TF/W/46 
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 Any such commitments should not apply until such time  as the Member in question is in a position to 
implement them, a principle recognized in the negotiating modalities. It is therefore proposed that least-developed countries be exempted from such provisions until such time as they are able to 
implement them, and that in the meantime technical  assistance should be directed to helping them 
build up the necessary domestic capacities. Deve loped-country Members and intergovernmental 
organizations should commit to the provision of such  technical assistance in the manner set out below. 
2. Transition periods 
2. Some of the commitments suggested in this pa per will take time to implement. For example, 
reviewing legislation or aligning doc uments and data requirements to international norms can in some 
cases be a lengthy process. Introducing simplified procedures for goods release presupposes some re-
formulation of customs processes and training of officials. Introducing an authorized trader system 
also needs time as Members have to determine what  system best suits their trade patterns and then 
prepare the necessary rules. In many cases these refo rms, and therefore potentially assistance, need to 
go ahead in tandem.  
3. Transitional periods should be available to en able developing countries to implement specific 
commitments in a progressive or staged manner. These could be based on each Member’s individual 
needs and situation, or generalized, but should be linked to any reform or modernization programme 
under way in a Member as well as  to technical assistance progra mming. More general commitments 
on transparency, non-discrimination, the avoi dance of unnecessary barriers, and any other 
commitments that do not imply many resources, should however be implemented immediately.  
3. Technical Assistance and Capacity Building Measures 
4. The EC already dedicates considerable developm ent assistance to trade facilitation, both at a 
national and regional level, and intends to cont inue to do so in the framework of the EC’s 
development assistance, particularly if a set of WTO provisions, setting common standards to which assistance can in future be progressively targeted, can  be established. In particular, as part of its 
efforts to meet the UN Millennium Development Goal s targets for aid, the EC plans to increase its 
volume of development aid, including in the trad e area, and some of this increased aid can, if 
requested by development partners in their deve lopment cooperation discussions with the EC, be 
directed to implementing trade facilitation measu res, in both the narrow (WTO) and the broader 
(building up infrastructure for trade) sense. 
5. Turning to the needs of WTO Members as e xpressed in the Negotiating Group, the EC 
believes that some more specific arrangements shoul d be put in place in order to strengthen the link 
between the negotiation and implementation of any fu ture commitments and the provision of technical 
assistance and capacity building. In accordance with the mandate, the EC proposes therefore the 
following arrangements for the improved provision and coordination of assistance in the field of trade 
facilitation:  TN/TF/W/46 
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 (a) Members should signal readiness to increase the level and quality of technical assistance for 
trade facilitation. Where competing requests for assistance are made, priority should be given 
to those countries whose needs are objectively th e greatest and which have demonstrated clear 
commitment to carrying out simplification measures.  
(b) Where a Member, as part of its development aid, is providing trade-related technical 
assistance to another Member it should, if request ed by that other Member, as far as possible 
include in such assistance trade facilitation s upport. This would help ensure that where a 
recipient Member does seek support on trade f acilitation, it can be provided as part of any 
TRA programme – the concept of "demand-driv en" aid and can take account of the overall 
developmental framework of recipient countries and regions.   
(c) The WTO and other organizations (the Worl d Bank, WCO, UNCTAD, and others) should, 
well in advance of the implementation of the r esults of the negotiations, establish and operate 
jointly a platform for international cooperation and coordination of technical assistance in the field of trade facilitation, bringing together  donor Members and recipient Members, regional 
groupings, as well as other intergovernmental orga nizations with a role to play (e.g., OECD, 
UN regional economic commissions etc.).  
(d) The function of this platform would be to help  ensure the transparency, coherence and, where 
necessary, coordination of assistance between donors and recipients, that assistance is directed, among other things, to implementing WTO commitments, that recipients’ needs are matched with donors, and that potential gaps are filled. A role could be provided too for 
national and international trade federations in such transparency and coordination efforts, 
given that many trade federations are already providing assistance or investment in trade 
facilitation, are interested in doing so, or are of ten directly affected by measures. The platform 
should not duplicate the activities of existi ng coordination mechanisms, such as the 
WTO/OECD DAC database on technical assistance, but coordinate with them and use such instruments to help it fulfil its functions. The platform must also not detract from but support 
coordination and cooperation on the ground in reci pient countries, which is fundamental to 
ensuring the effective delivery of assistance.  
(e) This platform should be set up once the scope of the future trade facilitation provisions is 
clearer. The first and most important task of the platform could be to take stock of individual 
Members’ trade facilitation needs in relation to  the provisions emerging, making full use of 
existing diagnostic tools and assessments, and then help to identify, with donors, what kind of 
technical assistance, if any, w ould be needed to support implem entation, and within what kind 
of timeframes. It would also be important early on to deve lop a common understanding on the 
appropriate sequencing of assist ance for implementation, give n that some trade facilitation 
measures – e.g., review and simplification of re gulations – needs to take place before other 
measures.  
(f) On this basis individual developing-country members would then be in a better position to 
determine what kind of transitional periods may be necessary in order to implement the results of the negotiations. 
 
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