Trade officials negotiating the Transatlantic Trade and Investment Partnership (TTIP) should deliver a “one stop shop” to streamline customs procedures, which could be easily managed through a single IT interface used on both continents, said UPS’ Walter van der Meiren in an interview with EURACTIV.
Walter van der Meiren is Brokerage Division Manager at UPS and Chair of the AmCham EU Customs and Trade Facilitation Committee.
How can enhanced customs procedures in TTIP create benefits for EU businesses and consumers?
We do see in TTIP a tremendous opportunity to streamline and modernise customs practices to make doing business between the EU and US less costly. The transatlantic economy generates close to €5 trillion in commercial sales each year, so there is a lot at stake. The role of customs is to collect revenue and to protect the safety and security of citizens, by managing the flow of goods, people and data. This is possible when customs rules are simple and easy to apply. However, the current procedures that importers and exporters need to comply with are complex and cumbersome. That prevents many companies, especially small- and medium-sized businesses from trading.
If we were able to streamline those basic customs procedures, reduce the costs for EU companies to trade and open up the transatlantic market to thousands of small companies, we could see a real boost in the growth and competitiveness of our economy. This could give EU consumers more choice for the products they want to buy at more competitive prices. We really see it as a “win-win” for consumers and businesses great and small.
What can be done to simplify the procedures?
AmCham EU’s Customs Committee has outlined a number of key recommendations that we believe could improve the customs procedures. I will highlight just a few of the most important ones here.
First, the EU and the US should look to eliminate the remaining tariffs in transatlantic trade. Many of these tariffs are already low (on average around 2-3 percent), but they still represent an unnecessary burden for EU and US companies seeking to do business with each other and increase costs for consumers. For example, when importing t-shirts of US origin, the end consumer still pays 12% import duties on the value of the goods, plus VAT on these duties. TTIP should seek to eliminate or lower all remaining tariffs, which would result in immediate savings for businesses and consumers. It is a positive signal that both the Chief US Negotiator Dan Mullaney and Chief EU Negotiator Ignacio Garcia Bercero recently stated that their aim is to eliminate the vast majority of remaining transatlantic tariffs.
Meanwhile, express delivery services have become increasingly important to ensuring the continued global competitiveness of businesses of all sizes to reduce their inventory costs. We see in TTIP an opportunity to establish a separate and expedited customs procedure for express shipments, allowing the necessary information to be submitted and processed electronically before the shipment arrives, in order to facilitate the immediate release of these goods.
Let me give you a practical example of how the system could be improved: currently if a package is being shipped from the United States to Liege, it would be flown to our hub in Cologne, where it would be sorted overnight and delivered to Belgium the next day. The package must include a special transit customs document for its journey from Cologne to Belgium. Once in Belgium, it first stops in Brussels where it has to be presented to Belgian customs and released for final delivery. Only then can the package move to its final destination in Liege. A sensible improvement would be to allow the goods to be released at the first point of entry in the EU. In that case, the package could travel directly from Cologne to Liege, saving time and money, and saving on fuel too.
Do you think that the discussions in the negotiations on this issue are heading in the right direction? Are there are any stumbling blocks?
The 11th round of TTIP negotiations saw the US put forward proposals in the area of customs, trade facilitation and rules of origin, which are critical to making sure that goods can reach customers across the Atlantic quickly and easily. We welcome this progress and are really hopeful that the negotiators can agree on some common-sense measures. In general, we are optimistic that the EU and US can make real progress in the negotiations in the coming months.
That includes stepping up discussions on other issues, such as streamlining the import process by providing a “one stop shop”. That way various regulatory controls can be managed through a single IT interface that is mutually used and recognised in all Member States.
Is greater harmonisation of data set requirements between the EU and US realistic at a time when the two partners are at odds over information sharing, as seen in the recent European Court of Justice decision on Safe Harbour?
I think it’s important to distinguish between customs data and the collection and transfer of personal data, which is what is being talked about in the Safe Harbour debate.
What we want is simple: to reach a stage where the information we provide to customs authorities and other agencies about goods being imported or exported is the same on both sides of the Atlantic. This means filling out the same forms, using the same type of electronic data, and making sure that the format and amount of information you have to share is the same across the US and EU. We just want to make sure that these processes remain as simple as possible.
At the moment these requirements vary, and create an unnecessary burden for customs officers, whose job is to carry out security checks and ensure the safety of goods coming into the country. Our two systems working in harmony will immediately speed up commerce between the US and the EU and enable us to create a truly transatlantic supply chain.
The WTO recently agreed on an international Trade Facilitation Agreement (TFA). How far beyond this agreement can TTIP go to improve customs cooperation and facilitate trade?
The Trade Facilitation Agreement concluded recently by the World Trade Organization was a really important achievement. It’s particularly significant because the agreement will benefit developing countries the most. In fact, it’s expected that the agreement will lead to a reduction in total trade costs for low-income countries of roughly 14-15 percent. That’s a huge step.
It’s also important to note, however, that the EU and the US have comparatively very advanced customs procedures and a long-standing trading relationship. So we’re hoping that TTIP will go well beyond what was recently agreed in the WTO and could lay the foundation for a future Customs Union between the EU and the US.