Customs modernization: Americas must catch up to Asia

By: | at 07:00 PM | International Trade  

Governments should adopt trade facilitation mindset, says UPS exec

By Peter A. Buxbaum, AJOT

Automating Customs procedures and speeding the time it takes to release goods transported in international commerce not only facilitates trade but also stimulates economic growth. That was the message conveyed by Stephen Flowers, president of UPS Americas, at a Washington gathering of the American Chambers of Commerce in Latin America (AACCLA) earlier this month.

More progress is needed in this area in the Western Hemisphere, Flowers told the gathering, if it is to reach the levels of trade facilitation currently existing in Asia. Governments in the Americas need to adopt a mindset of trade facilitation, Flowers added, arguing that trade facilitation measures will motivate foreign direct investment, make products less costly for local populations, stimulate economic growth, and promote progress by making those countries more competitive.

Flowers congratulated AACCLA for developing a document called, ‘Declaration by Business Organizations of the Americas: A Call for Progress on Trade Facilitation,’ that was signed by 102 organizations in the Americas. The declaration was presented to thirty-four hemispheric leaders at the Summit of the Americas in Argentina last November.

‘These trade measures focus on Customs authorities reducing or progressively

changing bureaucratic measures that impede economic and business growth,’ Flowers explained. ‘Today’s economic environment is very different than it was twenty or thirty years ago when current customs laws were written.’

The thrust of the agreement, Flowers continued, was to press customs authorities in the Western Hemisphere to adapt to new ways of processing shipments. ‘The goal is to facilitate international trade and have our region be more competitive in the global marketplace,’ Flowers said.

The World Customs Organization, Flowers noted, an organization of 169 member nations, is preparing a study which will review clearance procedures in different countries and measure the average time for the release of goods by customs after their arrival. ‘The purpose of this study,’ Flowers noted, ‘is to identify for customs authorities the problem areas and potential corrective actions needed to increase their efficiency.’

Development of this framework was undertaken by the World Customs Organization to promote the implementation of progressive changes within its member countries, according to Flowers. These changes would provide a picture of how that nation measures up to its global neighbors.

The use of automation and other sophisticated selection methods can allow customs authorities to improve compliance while also improving and facilitating the entry of the majority of low-risk goods, Flowers contended. ‘Measuring the time taken for the release of goods also meets the concerns of business,’ he said. ‘It will help Customs respond to business requirements for just-in-time inventory systems that require forward planning and tight production schedules.’

The time required to release goods has increasingly become the measure by which the international trading community assesses the efficiency of a customs administration, according to Flowers. Guatemala, for example, forged a partnership between the government and private sector to seek needed changes in this area.

‘The partnership resulted in breaking down artificial trade barriers that were originally designed to provide better controls for Customs, but in reality only benefited a small sector, while increasing the costs of goods to the general public,’ Flowers explained. ‘Guatemala began its transformation by implementing Customs hours that would fit the needs of its users, in other words twenty-four hours a day, seven days a week. This change by itself resulted in the reduction of clearance time for a container from an ocean freighter from eight days to twenty-two hours.’

Asia’s commitment to trade facilitation

As a follow up to this measure, the Guatemalans


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