Trade Facilitation

Despite the lack of progress towards a new multilateral agreement on market access for maritime services at the World Trade Organization (WTO), ICS has welcomed the entry into force, in February 2017, of the WTO Trade Facilitation Agreement (TFA). 

This is an important global trade agreement which, according to the International Chamber of Commerce (ICC) – of which ICS is a member – could provide a boost to global trade flows of over US$1 trillion. The TFA now becomes an official part of the multilateral trading system which covers more than 96% of global GDP.

By reducing unnecessary ‘red tape’ at borders, the TFA will hopefully have a significant effect on the ability of small and medium size businesses in developing countries to have greater access to global markets, which should have a positive impact on demand for maritime services. The ICC estimates that the TFA could increase SME exports by up to 80% in some developing nations’ economies.

ICC is actively supporting the implementation of the TFA through the Global Alliance for Trade Facilitation, an initiative which ICS also fully supports. 

Meanwhile, in 2016, IMO adopted some substantial amendments to the IMO Facilitation Convention, following a comprehensive review in which ICS had been involved closely throughout a process lasting several years.

The purpose of the IMO Convention on Facilitation of International Maritime Traffic (FAL) is to assist maritime transport by reducing paper work, simplifying formalities, documentary requirements and procedures associated with the arrival, stay and departure of ships engaged on international voyages.

FAL is perhaps an unusual IMO instrument as it is intended to make life easier for ships and their crews by reducing reporting formalities and administrative burdens, rather than adding to them. A major challenge throughout the revision process was to ensure that the Convention’s provisions were not unwittingly watered down by Customs and immigration authorities. 

One difficult issue that was satisfactorily resolved, following an ICS submission made jointly with the World Shipping Council and BIMCO, concerned the date by which time governments should establish systems for the electronic exchange of information. The industry submission highlighted the many cost and efficiency benefits of electronic data exchange, both to industry and government, with a view to encouraging adoption of the earliest agreeable implementation date for the mandatory use of electronic systems, in line with the recommendations of the World Customs Organization. 

It is important that governments focus on the benefits that electronic exchange of information will bring, rather than the initial cost of establishing the necessary infrastructure. Within the European Union, for example, the successful implementation of the ‘single window concept’ by EU Member States still remains disappointing slow.

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