Literature Review - Trade Facilitation as an Imperative for the Eac Customs Union

Topics: International trade, World Trade Organization, East African Community Pages: 18 (5590 words) Published: March 28, 2011
LITERATURE REVIEW: TRADE FACILITATION AS AN IMPERATIVE FOR THE EAC CUSTOMS UNION

Abstract

The global economy has made considerable progress in the last two decades in easing border restrictions on merchandise trade, by addressing trade-protective measures of non-tariff barriers and high tariffs, through the implementation of structural reform programmes as well as commitments undertaken under the multilateral framework of the GATT/WTO. With the passage of such ‘first generation’ trade policy reforms, attention has focused increasingly on other direct and indirect impacts of domestic regulatory regimes on international trade, the so-called ‘second generation’ trade issues concerned with behind-border measures that fall under the heading of trade facilitation. Broadly defined, these measures include anything from institutional and regulatory reform to customs and port efficiency and are inherently far more complex and costly to implement.

This paper makes an objective evaluation on the contribution of Customs to trade facilitation within the East African Community (EAC) by reviewing literature on the subject from various sources. The paper is developed against the background of trade facilitation as understood by the World Trade Organization (WTO). The paper therefore examines how and to what extent the trade facilitation-related aspects of the WTO are (or are not) reflected in the EAC customs law and administration. The World Customs Organization’s Trade facilitation instruments, particularly the Revised Kyoto Convention, are also considered. After examining the EAC customs law and administration, suggestions are made for better coordination, harmonisation and simplification of international trade/customs procedures within the East African Community.

Further examination of literature on the subject of the effects and impacts of trade facilitation on its current operative form and on reform provides scope for evaluation of the economic effects and development outputs of the current EAC Customs Union trade facilitation measures in place and practical suggestions on how it can be further refined and reformed for optimal outputs to enhance national and regional economic development objectives and priorities.

Introduction

According to the EAC Treaty - 1999, Article 74, one of the major pillars upon which the East African Community (EAC) was founded is cooperation in matters of trade liberalization and development. Article 5 on Page 15 of the same EAC Treaty - 1999, goes further to state that the EAC Partner States at that time agreed in principle ‘to establish among themselves…a Customs Union, a Common Market, subsequently a Monetary Union and ultimately, a Political Federation’. The East African Community Customs Union (EACCU) commenced its operations within Kenya, Tanzania and Uganda on 1 January 2005 with Burundi and Rwanda acceding to the EAC in July 2007. The East African Common Market Protocol encompassing all the five Partner States was eventually ratified in July 2010.

In compatibility with the definition of Customs in Chapter 2 of the General Annex to the Revised Kyoto Convention the EAC, as in many other countries, Customs is on the forefront of the various agencies that intervene in international trade in goods. Customs is, for instance, deeply involved in controlling goods which cross borders, determining goods’ nomenclature and origin, and collecting revenue as well as administering trade policies. Hence, the manner in which Customs operates highly affects international trade either negatively or positively. In other words, the manner in which Customs operates can either complicate or simplify the international trade in goods. And this introduces us to the concept of trade facilitation.

There are a number of definitions of trade facilitation used by different authors and different organisations. The United Nations Economic Commission for Europe (UN/ECE), for instance, defines it as a...

References: Asian Development Bank (2009): Designing and Implementing Trade Facilitation in Asia and the Pacific
B
C. Ferreira, et al (2007 article): ‘Challenges of Combating Corruption in Customs Administration’, in J.E. Edgardo and S. Pradhan (eds) – The Many Faces of Corruption
D
D. Hummels (2007): – “Time as Trade Barrier” notes.
Diodorus Buberwa Kamala (2006) – The Achievements and Challenges of the New East African Community Cooperation
EAC Treaty, 1999
EAC Treaty, 2001
EAC Customs Management Act, 2004.
Eduardo Bianchi (July 2004): Final Report for the International Working Group on the Doha Agenda II – Argentina’s National Experience with Trade Facilitation
G
General Annex to the Revised Kyoto Convention
International Trade Centre/UNCTAD/WTO (2005 Technical Paper): – WTO Negotiations on Trade Facilitation
Michael Lane’s (1998): Working Paper for Transparency International
MJ Trebilcock and R Howse (1999): – The Regulation of International Trade, 3rd Edition
OECD (2002): Business Benefits of Trade Facilitation
OECD (2005 Policy Brief): – The Costs and Benefits of Trade Facilitation
OECD (2009 Trade Policy Studies): – Overcoming Border Bottlenecks: The Costs and Benefits of Trade Facilitation, the
Swedish Trade Procedures Council (SWEPRO), National Board of Trade (2002 publication): – Trade Facilitation Impact and Potential Gains,
Transparency International Corruption Perception Index (2008)
UNCTAD Trade Facilitation Handbook Part II: Technical Notes on Essential Trade Facilitation Measures published in 2008
The UN Economic and Social Commission for Asia and the Pacific (ESCAP): – Trade Facilitation Framework: a Guiding Tool
World Bank (2008): – Doing Business Reports 2009
The World Trade Organization (2002): – Trade Facilitation – Overview of Trade Facilitation Work
WTO Discussion Paper (July 2007): Updated International Chamber of Commerce Recommendations for an Agreement on Trade Facilitation.
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