Trade facilitation and customs valuation

This publication is a collaboration between the WCO and the WTO to gain a better understanding of how the latest advanced technologies can help customs authorities to contribute to trade facilitation and to shed light on the opportunities and challenges customs authorities face when deploying blockchain the internet of things big data data analytics artificial intelligence and machine learning.

The survey shows a high level of interest and activity in the testing and implementation of the three areas of advanced technology in customs authorities worldwide. Over half of respondents report using IoT AI and machine learning while only Argentina and Uruguay are currently deploying blockchain.

Blockchain and DLT are still in an experimental phase for many customs authorities with around a third testing it through proofs of concept (PoCs) and pilot projects using mainly permissioned (i.e. private) blockchains. Only Argentina and Uruguay report full deployment of this technology.

The WCO and the WTO jointly designed questions on advanced technologies to enhance the 2021 WCO Annual Consolidated Survey (ACS) which was distributed to 183 WCO members to provide a snapshot of the level of implementation by customs authorities of advanced technologies. This annex contains the eighteen questions which formed chapter 4 of the 2021 ACS.

The TFA contains several provisions for expediting the movement release and clearance of goods including goods in transit and easing trade bottlenecks at borders. It sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. A key pillar of the TFA is a series of provisions for technical assistance and capacity building (TACB). Entering into force on 22 February 2017 all 26 LLDCs who are WTO members have completed their domestic ratification process.

Countries have put in place a range of restrictions on the movement of persons across borders especially for non-essential purposes as well as export prohibitions on essential goods and food. There has been a proliferation of measures banning the export of essential medical supplies as well as food paired with measures to facilitate the import of the same types of product (i.e. value added tax and import duty exemptions).

Without direct access to a sea or ocean and isolated from the world’s largest markets landlocked developing countries (LLDCs) face many challenges to integrate into global supply chains. This report identifies specific trade bottlenecks in LLDCs which have increased trading costs lengthened the time to process goods at the border and restricted the movement of goods across borders. Compounded by the devastating effect of the COVID-19 pandemic LLDCs have seen trade decline more sharply and for longer than the rest of the world. The report demonstrates the vital role the WTO Trade Facilitation Agreement (TFA) can play in boosting output and facilitating world trade by simplifying modernizing and harmonizing the movement release and clearance of goods. Participation in the TFA can broaden the opportunities for developing countries – and LLDCs in particular – to participate more fully in global value chains. The report concludes with recommendations on the steps that LLDCs neighbouring transit countries and international organizations can undertake to ease trade bottlenecks to keep trade flowing smoothly and to make trade more inclusive.

Among the outreach activities I have undertaken since becoming Director-General have been very detailed and substantive meetings with landlocked developing countries (LLDCs). They have told me how the particular barriers they face due to a lack of territorial access to the sea and isolation from the world’s largest markets restrict the free flow of trade and impose constraints on their socio-economic development. The COVID-19 pandemic has been especially damaging to their fragile economies which has brought new challenges such as container shortages high shipping costs and the closure of borders to stop the spread of COVID-19. In response I requested the WTO Secretariat to conduct this study on the logistical constraints impacting the trade performance of LLDCs and how trade bottlenecks could be reduced. I am very happy that the study has been produced in such a short time.