Finance Minister stresses on the importance of Trade Facilitation, in his opening address at 80th Session of Policy Commission

The Union Minister for Finance and Corporate Affairs,  Arun Jaitley has said that it is in the larger interest of every country to ensure that trade barriers are brought down and trade facilitation is done to the largest extent possible, within the domestic legal framework. Trade barriers will have an impact on transactional costs; any delay adds to the costs, takes away competitiveness, and domestic economies themselves start suffering, noted the Minister. He was addressing the opening session of the 80th Session of Policy Commission of World Customs Organization in Mumbai today December 3, 2018.  Jaitley joined the session from Delhi, through video conference. The three-day session is being organized by the WCO and hosted by the Central Board of Indirect Taxes and Customs (CBIC), India in Mumbai.

The Finance Minister recalled that there was a lack of clarity on the issue when trade facilitation came up initially in 1996 on the agenda of global trade talks. Despite this, every country was in due course compelled to realize that the matter needs attention. He expressed happiness that by 2014, most countries had come to agree on the importance of trade facilitation and that WTO had finally reached an agreement as regards trade facilitation.

Thanking WCO for inviting him to address the opening session,  Jaitley said that the Policy Commission is an extremely important forum of the WCO and that its role has been of great significance to the global economy. As the world economy grows, trade itself is going to increase immensely. He stated that trading across barriers of nations is an economic imperative of our times, which is going to increase in times to come. Further, increase in trade itself gives an impetus to global as well as national economies. Jaitley added that the single biggest factor that dominates global trade is the larger interest of consumers, who are entitled to the best and cost-effective goods and services.

The Finance Minister said that India has been at the forefront of improving its capacities, as reflected in India’s performance in the World Bank’s Ease of Doing Business rankings, which leapfrogged from 142 for 2014 to 77 for 2019. He observed that India’s ranking in the parameter “Trading across Borders” has improved greatly, from 146 to 80 in one year itself. Jaitley informed the gathering that India is investing in infrastructure, using technology to the best extent possible, and is willing to adopt global best practices. He expressed confidence that the Policy Commission meeting will be a great forum to discuss the future roadmap as regards trade facilitation and the policy changes required; nations would be able to learn from each other’s best practices and would stand better informed and educated by the discussions of the forum. He said that the deliberations would be useful not only to participating nations, but also to the WCO’s policy, which will thus be helpful to all emerging and developing countries as well.

Welcoming the delegates from various countries, Revenue Secretary,  A.B. Pandey said that right since India became a member of WCO in 1971, India and WCO have evolved towards generating, preserving and sustaining a momentum for promoting legitimate trade as a harbinger of growth. He said that this commonality of purpose has always led to a constructive relationship between India and the WCO.

He said that customs administrations globally envisage a digitally connected technology-driven paperless secure and high velocity customs. With the implementation of GST, India is at the cusp of a transformative moment. He said that the reforms made in Indian customs administration have become visible, with the improvement in India’s position in the World Bank’s Ease of Doing Business rankings.

Pandey highlighted that while continuing to perform its traditional role, Indian customs has reengineered its processes to enhance trade facilitation and ease of doing business in the country. There has been a heightened focus on improving efficiency, in reducing time and cost. He said that the trade initiatives have become fast-paced and aligned with WTO’s Trade Facilitation Agreement. As trade facilitation becomes a global priority, simplification of procedures and harmonisation of processes became the way forward for Indian customs. There has been a change in mindset – from that of a regulator, to that of a facilitator.

Focus of customs clearances is now on simplification in procedures, reduction in time and cost and transparency in rules. The WCO theme of “Smart Borders for Seamless Trade, Travel and Transport” aligns well with the whole-of-border approach that is shaping India’s current customs policy, said the Secretary. He underlined the critical importance of communication and collaboration among government agencies at the border, both within the country and between countries.

Pandey said that the key challenge for customs today is creating a convergence of facilitation and enforcement. Leveraging digitization and technology for non-intrusive operations is vital for a data-empowered and digitally enabled customs. Observing that the WCO has been at the forefront of using digital technologies, the Secretary said that the response of WCO in harnessing new technologies such as blockchain and big data should continue to be proactive.

In a media interaction after the opening session, Chairman, CBIC,  S. Ramesh informed that WCO is a representative body of 180 customs administrations, representing more than 90% of world trade. India has been an integral member of the organization. The 33 countries present for the meeting represent all 180 countries. He said that India has the unique privilege of hosting the 80th meeting of the Policy Commission, more so since India is at present the Vice-Chair of the Asia Pacific region. Recalling India’s improvement in “Trading across Borders” parameter in World Bank’s Ease of Doing Business Rankings, the Chairman said that the formulation of the National Trade Facilitation Action Plan and the Trade Facilitation Committee headed by Cabinet Secretary shows the Government of India’s commitment to advancing trade facilitation. The Policy Commission will discuss trade facilitation at length and ensure that all customs administrations are geared up on this front, he added.

India feels that it is very important to ensure that small island economies in the Asia Pacific region are brought into the mainstream and integrated into the global economy, said the Chairman. He informed that the Union Finance Minister has sanctioned a sum of 5 crore rupees towards capacity building in customs matters at the WCO; he said that this is the first ever contribution by India towards the Customs Appropriation Fund of the WCO.

Ramesh further informed that active discussion and dialogue with the World Bank on the subject of trade facilitation, for effective implementation of trade facilitation measures, is another discussion point of the meeting.

Chairperson, WCO Council, Mr. Enrique Canon said that the meeting will discuss and seek to agree on the future of customs, of trade and hence of the world. Speaking of the importance of keeping up with the pace of change, Mr. Canon said that technology is the most important change that is happening; if customs and WCO does not keep up to its pace, the people of the world will suffer. He expressed confidence that WCO will deal with the challenge successfully and come up with the best solutions for an ever-changing world.

Secretary General of WCO, Mr. Kunio Mikuriya said that improvement in India’s trade facilitation measures has been remarkable and that the Indian experience is going to be very significant for all members. He said that India has a comprehensive policy which goes beyond customs and trade facilitation. He complimented India’s contribution to the WCO, adding that in the era of knowledge-based customs, Indian professionals both inside and outside WCO have been playing an important role in disseminating knowledge on customs matters.

Mr. Mikuriya stated that consumer protection and security is an important element for competitiveness, which would be discussed at the forum. He informed the media that the meeting is a good opportunity for members, and that many bilateral agreements would be signed and built upon. He appreciated India’s hospitality and leadership, not only in Asia Pacific, but also in the global customs community and hoped that the meeting will be able to chart out a roadmap for the future.

Member, CBIC, Shri Pranab Kumar Das said that the meeting will witness the signing of a customs mutual assistance agreement between India and Peru and a joint action plan with Uganda. Bilateral talks would be held with various customs administrations including USA and Japan. Stating that the future of customs lies in collaboration and cooperation, he informed that the meeting will discuss how technology-driven customs administrations can march ahead.

Some of the important topics to be discussed during the meeting include trade facilitation, controlling illicit financial flow, performance measurement, challenges of small island economies, etc. Hosting of the Policy Commission session will give global presence and leadership role to the country in the area of customs procedures and will also give a boost to India’s thrust in facilitating trade.

***

DJM/RDS