WHAT IS INTERNATIONAL TRADE FACILITATION?

International trade facilitation is now a familiar term in international economic and political debate. For many years its three main manifestations have been:

In the last five years, however, there has been a flurry of activity under a constantly extended facilitation label, including �

The inclusion of Trade Facilitation in a small list of diverse subjects, for example, investment and procurement, for negotiation in the WTO. While this list, established in Singapore, failed, along with the rest of the WTIO agenda, to make any progress at Cancun, sufficient work had been done, particularly by the EU and US representatives to show that, in this forum, facilitation is equated with Customs reform. In any event the issue of �facilitation� is now highly politicised at the negotiating interface between developed and developing economies.

The establishment, by the World Bank, the WCO, the ICC, UNCTAD and UNECE of a Global Facilitation Partnership, occupies a uniquely advantageous position as a designated operational link between the long-standing Transport Division and the new trade Division.

Publication by the World Bank of a number of economic studies in which facilitation is seen and presented as bringing spectacular trade benefits. One of these papers, for example, estimates that in the APEC region alone, �facilitation� as extended by the authors to include, for example, improvement in port management, will bring an increase of US$280bn. in regional trade performance.

Invocation of �facilitation� by the US Customs and the WCO in the context of an entirely unproven and, in the light of US-led regulation, increasingly unlikely thesis that �facilitation and security are just two sides of the same coin�. No attempt has been made, by either institution, to sort out main strategic and operational facilitation/security relationships in the light of realistic and precise definitions of both terms.

Work in OECD on the measurement of �trade facilitation� performance and benefits. This has included some useful examination of existing definitions and assumption as to the nature of facilitation.

In the light of all these developments a review of the accepted definition of �facilitation� must be timely and probably overdue. In view of its now obvious confrontation, however defined, with current and emerging security requirements it will also be necessary to secure general agreement on a definition of �security�.

At the moment the only �respectable� definition of facilitation, minted by the UN/ECE and adopted in a number of recent publications by OECD, is �The simplification and harmonisation of international trade procedures and the information flows associated with them�.

At this same pedestrian level security could be defined as "The production and observance of a set of international procedures and practices designed to prevent the intrusion of illicit items into the international trade transaction or unauthorised access to and manipulation of controlling information systems".

It seems very unlikely, however, that the mutual accommodation of these two innocuous concept is what all this international fuss is about, or that all the political and institutional enthusiasm and calls for legislation now focused on both facilitation and security can be accommodated within these narrow limits without grave misunderstanding and very blurred conclusions.

It would be much more sensible, constructive and disciplined to redefine facilitation as, for example, �Measures to assist the development and expansion of international trade in response to business and governmental needs for a strategic global approach and activity over and above individual national external trade promotion policies and practices.

In much the same way security could be seen and treated as �Measures to ensure that the expansion and development of global commerce are consonant with and conform strictly and reliably to internationally agreed import and export control requirements.�

How can TIACA members gain access to world markets for their services and bring the benefits of fully competitive air transport to millions of potential customers especially in developing countries, across restrictive, even prohibitive national licensing regulations?

This raises major issues of air transport liberalisation, including the relationship between cargo and passenger operations. At the national level there are such additional problems as restrictions on wet-leasing and carriage of goods in tourist charters.

A second facilitation objective would be the ability, once admitted to a market, to operate there on �level playing field� terms. This will require examination and action in respect of such issues as the extent and exercise of official or commercial monopolies, unreasonable and preferential allocation of slots, licenses and permits, discrimination in the application of excessive ground handling, airport and other charges and any special privileges attached to official or parastatal agencies offering the same commercial services.

A third facilitation field will be the reduction and elimination of operational handicaps caused by inadequate understanding of, and facilities for, rapid reliable airborne deliveries.

Air cargo, moving only between airport and airport is only half the delivery tale. The overall origin-destination movement is inescapably multimodal, with road as the usual transport partner. The ability to put these elements together and manage the total activity as nearly as possible to an integrated seamless delivery service may be inhibited by inadequate legal provisions for through transport operators.

A fourth sector for TIACA intervention and improvement covers defects in administrative integrity. The pressures cast on air transport by tight timetables and the highly perishable nature of many consignments offer powerful and profitable incentives for officials to make arbitrary rulings, multiply occasions for intervention, raise technical disputes and, in a longer-term perspective, oppose and slow movements to such basic reforms as automated risk-assessment systems.

Finally there are still many classical �facilitation� needs in terms of simplification and harmonisation of profuse, non-standard documentation, the introduction of EDI standards, the promotion of such international instruments as the WCO Kyoto Convention and the WTO Valuation Agreement.

Both these latter requirements pose associated needs for technical assistance and capacity building. These will be met by international institutions with broader remits and resources than TIACA but the air cargo industry can and should find a role in identifying priorities and helping supply required expertise.

There are many peripheral factors that will affect and influence the pace and scope of improvement in all the above sectors.

Facilitation, even in its widest interpretation, is still about the invisible infrastructure of conventions, laws, rules, procedures, and controlling and enabling information interchanges. It extends, in practice, to the efficiency and integrity with which these are interpreted and applied, but this still leaves many external factors that have to be examined and approached under other headings.

These include the physical infrastructure of roads and airports, the educational facilities to provide suitable staff and workforce, the general political stability needed to carry forward reliable business/government understandings and the institutional network through which agreements can be negotiated and implemented.

TIACA is already moving to obtain and justify the status and engagements necessary to operate effectively on the many intergovernmental and trade bodies currently in action on this very varied and at some points patently confused scene.

It will have to work to a well-designed but constantly evolving strategic plan and while there may be other important components, there seems every likelihood that one major and rewarding objective would be to draw international attention to the need to review and revise the general understanding of trade facilitation and ensure that air transport plays a justifiably leading role in its future development.