Kunio Mikuriya, Secretary General, WCO

WCO
TRADE AND INVESTMENT
WCO
TRADE AND INVESTMENT
In support of TFA
implementation
If implemented, the World Trade Organization’s Trade
Facilitation Agreement (TFA) could give a significant boost
to international trade, says Kunio Mikuriya, Secretary
General, World Customs Organization
A
Kunio Mikuriya has been Secretary
General of the World Customs
Organization (WCO) since 2009.
Prior to joining the WCO, he worked
for Japan’s Ministry of Finance
for 25 years. There, he served
as Director of Enforcement, as
well as Director of Research and
International Affairs, paving the
way for the conclusion of the first
regional trade agreement for Japan.
In addition, he spent time as a
counsellor at Japan’s mission to the
World Trade Organization, and took
part in the General Agreement on
Tariffs and Trade (GATT) Uruguay
Round trade negotiations.
@WCO_OMD
www.wcoomd.org
134
t the ninth ministerial meeting
of the World Trade Organization
(WTO) in Bali, Indonesia, in
December 2013, ministers
adopted ‘the Bali Package’ under the
framework of the Doha Development
Agenda. The Bali Package included the
Trade Facilitation Agreement (TFA),
which consists of measures that would
increase the efficiency of border agencies
such as customs.
In July 2014, however, the future of
the TFA was thrown into doubt when WTO
members were unable to adopt the protocol
of amendment to insert the TFA into Annex
1A of the WTO Agreement.
Despite this setback, the World
Customs Organization (WCO) remains
committed to supporting customs
administrations worldwide with their
trade facilitation reforms, regardless
of what happens in Geneva. In addition,
as Secretary General of the WCO, I call
on G20 leaders to do their utmost to put
the TFA back on track. This article
outlines the WCO’s trade facilitation
strategy going forward.
TFA benefits and the WCO’s role
The WCO’s TFA strategy was set in Ireland
when the WCO Dublin Resolution was
adopted in December 2013. The Dublin Resolution
stipulates that the WCO will work in close coordination
with the WTO, provide technical assistance and capacitybuilding to customs administrations based on WCO
instruments and tools, and enhance communication
activities to trumpet the importance of trade facilitation
to policymakers and business leaders worldwide.
The potential gains from implementation of the
TFA are substantial, especially for countries that have
yet to apply its principles. According to some analysis,
G20 Australia Summit: Brisbane November 2014
Customs operations
in the Democratic
Republic of Congo
(left) and Denmark
(above). Customs
administrations
across the world
receive tailor-made
support via the
Mercator Programme
developing countries are expected to save around
$325 billion a year, including the acceleration of their
integration into global value chains. Moreover, according
to the Organisation for Economic Co-operation and
Development (OECD), developed countries stand to
gain a 10 per cent cut in their trade costs, including
easier trade flows for businesses.
The TFA thus presents a great opportunity for
modernising customs administrations, boosting
international trade and strengthening the economic
competitiveness of countries across the globe. The WCO
brings to the table international customs standards, an
understanding of divergent local conditions, the ability
to coordinate with relevant stakeholders, a worldwide
network of customs experts and long-standing support
for trade facilitation globally.
The role of the WCO is specifically recognised
in article 13.1 of section I of the TFA. It states that
the WTO Committee on Trade Facilitation shall
maintain close contact with the WCO “with the
objective of securing the best available advice for the
implementation and administration” of the TFA, and
“to ensure that unnecessary duplication is avoided”.
At the WCO, the practical aspects of meeting
expectations arising from the TFA discussions are being
taken up by the WCO Working Group on the WTO TFA,
with the goal of ensuring a harmonised approach by
customs in implementing the agreement. The group met
for the first time in March 2014. It brought together
delegates from WCO members’ customs
administrations, trade ministries and finance
ministries, as well as representatives from the WTO,
international organisations and the private sector, who
shared views on the implementation of the TFA.
WCO instruments and tools
WCO instruments and tools are fully consistent with the
TFA and would support its implementation. The WCO’s
Revised Kyoto Convention (RKC), the Harmonized
System and many tools provide for simplified customs
The TFA presents a great
opportunity for modernising
customs administrations
procedures and improved border-management
processes, as well as a more predictable and transparent
trade environment for legitimate cross-border trade.
To support an understanding of the linkages
between the TFA and WCO instruments and tools,
the WCO released an implementation guidance tool
on its website. For each TFA article, it contains the
following categories of information: overview, text
of the TFA article, relevant RKC standards and
FULL PUBLICATION:
g20.newsdeskmedia.com
RKC guidelines; other relevant WCO tools; member
practices; and performance indicators.
WCO instruments and tools support the adoption
of a coordinated approach through mechanisms such as
the ‘Single Window’ concept. Key tools in this domain
are the Time Release Study guidelines that identify
problem areas from the arrival of the goods to their
release, and the WCO data model, which facilitates the
efficient exchange of information between business and
governments by offering standardised data required by
customs and other border-control agencies.
Technical assistance and capacity-building
Section II of the TFA provides for assistance to be given to
developing and least-developed countries in the WTO
to support updating their infrastructure, training their
customs officials, and assisting them in any way that
would help in ensuring the implementation of the TFA.
The role of relevant international organisations,
including the WCO, in providing technical assistance
and capacity-building is also explicitly defined in the
TFA context. In this respect, the WCO has launched
the Mercator Programme, which is aimed at assisting
governments worldwide to implement trade facilitation
reforms by using core WCO instruments and tools. With
a wealth of expertise and experience in global customs
technical assistance and capacity-building, including a
network of experts at its disposal and comprehensive
donor-engagement mechanisms, the Mercator
Programme provides tailor-made support. Based on
a long-standing history of cooperation with the WTO,
other international organisations and the private sector,
it provides a consolidated platform for coordinating the
needs and priorities of all stakeholders.
Although, at the time of writing, the TFA is
regrettably in doubt, the WCO remains optimistic
that the logjam will be broken. Regardless of future
developments, the WCO will continue to provide
trade facilitation, technical assistance and capacitybuilding to customs administrations under the WCO
Mercator Programme.
G20 Australia Summit: Brisbane November 2014
135
SPONSORED FEATURE
SPONSORED FEATURE
The market for infrastructure financing
F
ounded in 2009, the
Long-Term Investors Club
(LTIC) has grown in the
past five years from 14 to
19 major financial institutions
and institutional investors from all over
the world, in particular from the G20
countries, representing a growth of the
combined balance sheet total from
$3.2 to $5.4 trillion. It aims to bring
together major worldwide institutions
– including sovereign wealth funds,
public- and private-sector pension funds
and development banks – to assert their
common identity as long-term investors
to promote long-term sustainable
investment among international
regulators and political stakeholders
and to facilitate greater cooperation
between members. The members
are convinced that long-term investors
play an essential role in contributing
to economic growth in the fields of
infrastructure, urban development,
renewable energies, small and mediumsized enterprises and innovation.
The Long-Term Investors
Club contribution
The Club has contributed to the
discussion around the green paper on
long-term financing of the European
Commission and to the high-level
principles of long-term investment
financing by institutional investors.
This was released by the OECD in the
framework of the G20 to adapt the
international and European regulatory
framework of accounting and prudential
standards to the specificities of longterm investments. Investors and
governments need to change their
behaviour to favour long-term
investment in the real economy:
¡ Governments should better consider
the impact of regulatory decisions
on long-term investments. They also
have a fundamental role in creating
the conditions to encourage the flow
of capital from savers to long-term
investments; and
¡ Investors have to promote
long-term strategies and align
their decision-making structures
with their long-term mandates, as
well as actively cooperating with
other long-term investors.
The support of the G20 members to
promote long-term behaviour is critical.
The LTIC’s activities are notably
focused on fulfilling the conditions for a
well-functioning market for infrastructure
finance. The Club has already developed
an active cooperation strategy in this
field and launched two infrastructure
investment initiatives:
¡ The EU 2020 Marguerite Fund1, to
support strategic investments in the
fields of energy, climate change and
transport infrastructure in the EU’s
27 Member States; and
¡ The Mediterranean InfraMed
Infrastructure Fund2, dedicated to
long-term investments in sustainable
transport, energy and urban
infrastructures in the countries of the
Mediterranean’s southern and eastern
shores. These funds are prototypes
of new platforms that allow public
investors to join the private sector to
finance long-term investments.
Databases on infrastructure finance
are underdeveloped so that infrastructure
is difficult to value as an asset class by
investors and the rating agencies. The
LTIC addresses this in a joint project with
the OECD, spearheaded by Algemene
Pensioen Groep (APG), analysing the
risk-return profile of LTIC members’
infrastructure portfolios. The results
can provide an important contribution
to improving the functioning of the
market for infrastructure investments.
Infrastructure finance is important
The LTIC puts great effort into these
activities, because sustainable
infrastructure projects are important
for the creation of jobs and growth.
Infrastructure can be a very interesting
investment for long-term investors due
to its long-term characteristic and
the illiquidity premium that raises the
return on these investments. With
the constraints on public budgets
and the retreat of banks from long-term
investment, the role of institutional
investors has become more important
than ever before. However, to be able
to raise capital for this type of long-term
investment, the market for financing
infrastructure projects needs to be
improved, especially in the eurozone.
In general, new prudential and
financial markets regulation should
provide long-term investors the
opportunity to invest more with a
long-term perspective. This issue is key.
More specifically, four conditions need
to be fulfilled to develop the market for
infrastructure investment finance.
The first condition is that public-private
partnership contracts, which stipulate the
obligations and rights of the participating
parties, are standardised. This would
make the market more transparent for
its participants and reduce the costs of
negotiation and acquiring information.
Secondly, procurement procedures
among the EU member states should
be harmonised, and thirdly, there should
be a pipeline of deals coming to the
market. A volume of future deals makes
it possible to do the investment with the
knowledge necessary. If the investment
in infrastructure is a unique event, the
The LTIC is
contributing to
financing jobs
and sustainable
economic growth
costs of negotiating the deal would be
high, because what is learnt cannot be put
into practice a second time. A repeated
game of negotiating infrastructure
projects diminishes the risk that lemons
are sold due to the reputations of the
negotiating parties at stake.
Finally, there should be databases
developed to analyse the properties of
infrastructure on which potential investors
and rating agencies can base their
opinions. This would make this market
more transparent and accessible for both
small and large long-term investors.
By pooling the resources of its
members and facing the cross-border
challenges of the real economy, the
LTIC is contributing to financing jobs
and sustainable economic growth.
CAISSE DES DÉPÔTS (CDC)
BANK GOSPODARSTWA
CASSA DEPOSITI E
KFW BANKENGRUPPE
CEO: Pierre-René Lemas
KRAJOWEGO (BGK)
PRESTITI (CDP)
CEO: Ulrich Schröder
Location: Paris
CEO: Dariusz Kacprzyk
President: Franco Bassanini
Location: Frankfurt
www.caissedesdepots.fr
Location: Warsaw
Location: Rome
www.kfw.de
www.bgk.pl
www.cassaddpp.it
TIAA-CREF
ALGEMENE PENSIOEN GROEP
EUROPEAN INVESTMENT
INSTITUTO DE CRÉDITO
CEO: Roger W. Ferguson
(APG)
BANK (EIB)
OFICIAL (ICO)
Location: Charlotte (US)
CEO: Dick Sluimers
President: Werner Hoyer
CEO: Irene Garrido
www.tiaa-cref.org
Location: Amsterdam
Location: Luxembourg
Location: Madrid
www.apg.nl
www.eib.org
www.ico.es
CAISSE DE DÉPÔT ET
IDFC
MUBADALA
TÜRKIYE SINAI KALKINMA
PLACEMENT
CEO: Dr Rajiv Lall
DEVELOPMENT COMPANY
BANKASI (TSKB)
DU QUÉBEC (CDPQ)
Location: Mumbai
CEO: H.E. Khaldoon Khalifa
CEO: Özcan Türkakin
Chairman: Robert Tessier
www.idfc.com
Al Mubarak
Location: Istanbul
Location: Montréal
Location: Abu Dhabi (UAE)
www.tskb.com.tr
www.lacaisse.com
www.mubadala.com
CAIXA ECONOMICA
FEDERAL (CEF)
CEO: Jorge Hereda
Location: Rio
www.caixa.gov.br
ONTARIO MUNICIPAL
VNESHECONOMBANK (VEB)
CHINA DEVELOPMENT
CAISSE DE DÉPÔT
EMPLOYEES RETIREMENT
CEO: Vladimir Dmitriev
BANK (CDB)
ET DE GESTION (CDG)
SYSTEM (OMERS)
Location: Moscow
Chairman: Hu Huaibang
CEO: Anass Houir Alami
CEO: Michael Latimer
www.veb.ru
Location: Beijing
Location: Rabat
www.cdb.com.cn
www.cdg.ma
Location: Toronto
www.omers.com
DEVELOPMENT BANK
JAPAN BANK FOR INTERNATIONAL
OF JAPAN
COOPERATION (JBIC)
CEO: Toru Hashimoto
CEO: Hiroshi Watanabe
1
www.margueritefund.eu
Location: Tokyo
Location: Tokyo
2
www.inframed.com
www.dbj.jp
www.jbic.go.jp
The President
Franco Bassanini
The Secretary-General
Mr. D. de Crayencour
[email protected]
www.ltic.org

Download Report