WCO, WTO, and You!

Recently, I attended the ASAPRA Annual Conference, which is the association of international trade Forwarders and Brokers of South and Central America.  It was here that I had the good fortune to hear a representative from the World Customs Organization (WCO) address the conference attendees.  During his presentation he spoke not only of the work of the WCO but also of the work being done by the World Trade Organization (WTO).  While listening to the presentation, I realized how much the decisions made at these global organizations affect the trade as well as the livelihood of the trade community, including service providers.  We should make sure we stay informed on the work being done in the global trade arena because eventually it comes back to affect how we accomplish our jobs within our own countries.

In my mind, I was always trying to distinguish the difference between the WCO and the WTO when it came to the effects it would have on my business as a service provider. In brief, the difference between the WCO and the WTO is the following:

The WCO is comprised of Customs Authorities within countries around the world (179 Members, three-quarters of which are developing countries and are responsible for managing more than 98% of world trade).They deal mostly with procedures to streamline the process of customs clearance in the global market while improving security and improving transparency and predictability in the customs clearance process.

World Customs Organization HQ

The WTO has 160 members as of June 2014 and is an organization where countries negotiate trade agreements, settle trade disputes, and operates a system of trade rules. In a nut shell, the WTO is a place where member governments try to sort out trade problems they may have with each other, creating rules which are transparent and predictable for global trade.

World Trade Organization

From this group come some WTO agreements we have all heard of regarding international trade such as the General Agreement on Tariffs and Trade (GATT) agreement.  These agreements are essentially contracts binding governments to keep their trade policies within agreed limits.  The goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives.  This process is in place to help trade flow as freely as possible, thus improving the economic growth of the global economy.

One of the latest agreements being discussed at the WTO is the Bali Package, which was adopted on December 7th, 2013.  While you may initially think that this package is not important to our daily jobs and work, when you read through the agreement, which is being deliberated and adopted by the member countries, you will see statements  addressing the importance of services providers such as brokers and forwarders in the process of international trade.  We should never take for granted the work being done by the WTO as well as the WCO because the recommendations being made by these global organizations will eventually be adopted by our own governments. In turn, directly influencing our daily work.

Never forget the pivotal role we play in the movement of International goods as well as the importance of being well informed on what is being agreed to, decided, or changed within our industry.  We can only be effective if we stay informed and are part of the process.  Be proud of what you do for the global economy.

Coming Together: Private and Public Sectors Collaborating for a More Efficient and Safe International Trade Process

In many of my previous posts, I often speak of the ever-shrinking globe we live in and the complexity of safely moving goods across international borders. I’ve also spoken about intellectual property rights issues and the need for a better understanding of the rules on engagement for those who participate in the Global market.  This fact cannot be denied.  The world’s global economies have seen this trend as well, and to address the issue in 1952, the Customs Co-operative Council was established, today known as the World Customs Organization (WCO).  This independent intergovernmental body is charged with enhancing the effectiveness and efficiency of customs administrations around the world. 

PC: blog.amberroad.com

Today, the WCO represents 179 customs administrations across the globe, which collectively processes 98% of world trade and jointly establishes guidelines to accomplish their mission.

The WCO Goals are as follows:

  • Promote the security and facilitation of international trade, including simplification and harmonization of Customs procedures = Economic Competitiveness Package
  • Promote fair, efficient, and effective Revenue collection = Revenue Package
  • Protect society, public health and safety = Compliance and Enforcement Package
  • Strengthen Capacity Building = Organizational Development Package
  • Promote information exchange between all stakeholders
  • Raise the performance and profile of Customs
  • Conduct Research and Analysis

The process of achieving these goals is done through open dialogue and the exchange of experiences between national customs delegates from around the world, which the WCO offers its members. 

While no national customs administration is obligated to follow the models which are set out by the WCO, its members see the benefits of coordinating efforts while having a more structured approach for secured international trade practices.  When we talk about international security, the WCO created a document called the SAFE framework of standards to Secure and Facilitate Global Trade , which many countries have adopted for their security enforcement efforts, especially after the tragic events of September 11. Through this document, we have seen many advances in items such as mutual recognition (countries recognizing the security efforts of another country in regards to trade with one other).

The WCO also recognizes the importance of a well-educated trade community, not only from the private sector but also from the public sector. This is done by encouraging education and understanding through capacity building efforts in regions where a well-established customs clearance practice by its national agencies have not been established while educating the trade community in those countries the requirements to engage in international trade.  The premise is similar to that of the NEI, which believes having everyone involved in the movement of international trade with a clear understanding of what it takes to move merchandise across international borders in a safe and efficient way.  To do so, this requires a good understanding of the complex process involved with such activities.

We continue to provide a single window of endless opportunities for people who are seeking knowledge on matters of international trade through our distance-learning offerings.  As always, be proud of your profession and the role you play in our global economy