Jana Adopting a Harmonized Regional Approach to Customs Regulation for the Tripartite Free Trade Agreement

1. Auflage 2018
ISBN: 978-3-96067-690-4
Verlag: Diplomica Verlag
Format: PDF
Kopierschutz: 0 - No protection

E-Book, Englisch, 111 Seiten

The three regional economic communities (RECs) in Eastern and Southern Africa are the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC). Together, they have recognised the need to work towards regional cooperation aimed at the eventual creation of a single regional economic community or Tripartite Free Trade Agreement (TFTA). This will replace the existent RECs in Eastern and Southern Africa to which the member states of these two regions have multiple membership. The TFTA region comprises a total of 27 member states which have a combined population of 527 million people and a combined gross domestic product (GDP) of USD 624 billion. These statistics translate into a potential regional economic powerhouse for Eastern and Southern Africa.
One of the major goals of the TFTA is to harmonise trade arrangements among the three RECs, improve the movement of goods and persons within the single integrated region, facilitate the joint implementation of regional infrastructure projects and enhance co-operation of member states. This is a laudable initiative by the member states of the three RECs and it is recognised that regional integration is the first step towards integration into a multilateral trading system. For the TFTA member states, it is crucial that there is an awareness to move towards a review of domestic customs legislation and policy and to develop regional, supranational legislation and regulations in order to gain a stronger competitive edge in the global market.
This study shies away from proposing a „quick fix? or „instant benefit? to the harmonisation of TFTA member states customs legislative frameworks and policies and the development of a single automated, interoperable electronic customs system. Rather, it places its focus on long-term sustainable benefits which will be realised over time. The harmonisation of TFTA member state customs legislative policies and the resultant Information and Communications Technology (ICT) reforms to the customs processes of the TFTA member states, though not immediate or short-term, will strategically position the region to conduct business in an increasingly volume driven, fast paced, electronic global economy.

Autoren/Hrsg.

Jana, Vimbai Lisa Michelle

Fachgebiete

• Rechtswissenschaften Ausländisches Recht Afrika (außer Südafrika)
• Rechtswissenschaften Internationales Recht und Europarecht Internationales Recht Internationales Handels-, Wirtschafts- und Gesellschaftsrecht
• Wirtschaftswissenschaften Volkswirtschaftslehre Internationale Wirtschaft Handelsabkommen, Wirtschaftsorganisationen

Leseproben

Text Sample:

CHAPTER 3: AN ANALYSIS OF TFTA EFFORTS TO HARMONISE CUSTOMS LAWS AND POLICIES:

3.1 BACKGROUND:

The decision to negotiate an agreement for the creation of a Tripartite Free Trade Agreement (TFTA) was sanctioned by heads of government for the Common Market for East and Southern Africa (COMESA), East Africa Community (EAC), and Southern African Development Community (SADC) Regional Economic Communities (REC’s) at the first tripartite summit which was held in Kampala, Uganda in 2008.
At the tripartite summit the importance of the envisaged tripartite agreement as a crucial stepping stone towards the eventual achievement of the African Economic Community (AEC) was emphasised as it is acknowledged that the TFTA is part of the pan-African vision towards one continental economic grouping. This vision is a product of the Abuja treaty (1991) which was signed by several Organisation of African Union (OAU) heads of state and government. The Abuja treaty laid the groundwork for the creation of the AEC, with the REC’s serving as building blocks for the envisaged continental community.
The TFTA is based on three main pillars which are identified as market integration, infrastructure development and industrial development. These three pillars further devolve to encompass other sub-areas which are in turn more specifically directed towards particular areas of negotiation. The area of customs harmonisation falls under the pillar of market integration. The developments which have taken place to date or are currently underway or planned for under this pillar are then critically analysed in this chapter.
At the inaugural tripartite summit there also were established, tripartite sectoral ministerial committees on trade, finance, customs, economic matters and home/internal affairs and a further sectoral ministerial committee on legal affairs. Moreover, it was approved that these ministerial committees would convene annually at the least and their implementing bodies which would assume the form of a tripartite taskforce of the secretariats of the three REC’s would meet at least bi-annually.
To date, the secretariats of the three REC’s have successfully managed to complete a study aimed at the formation of a road map for establishing the TFTA, together with the legal and institutional framework to be developed for the region. A draft report and draft instruments were also circulated to the member states of the proposed TFTA. The draft instruments which were developed consist of the TFTA agreement and its supporting annexures, tariff liberalisation modalities, rules of origin, the road map and the negotiating timetable.
Of relevance to this theme will be the fact that the secretariats have held meetings on customs cooperation and as a result thereof, efforts to finalise a tripartite work programme in this area are at an advanced stage though they are not yet finalised. These meetings include the 11th meeting of the subcommittee on customs and trade of the COMESA-EAC-SADC tripartite task force where it was reiterated that the three REC’s should adopt harmonised standards and also work towards the development of a single regional framework for cooperation and mutual agreement.
The draft TFTA agreement contains an annexure which specifically addresses the subject of the simplification and harmonisation of trade documentation and procedures in customs. This annexure to Article 14 of the draft TFTA agreement seeks to address this matter and states its objective as that of promoting cooperation among member states within the TFTA to simplify and harmonise trade documentation and procedures in order to facilitate intra-tripartite trade.
This annexure is a clear translation of the theory that the harmonisation of customs legislation, policies and data is the key towards developing successful customs modernisation initiatives and is the solution to unlocking and accelerating regional economic growth for the TFTA. It is also of importance to take note of the fact that, since the inception of the TFTA, the three REC’s have executed lone and fragmented attempts towards the coordination and harmonisation of their members’ trade rules including the simplification of customs procedures and documentation, citing for example, the standardisation of the COMESA and SADC customs bond guarantee schemes.
In addition the three REC’s have, in their individual capacities also focused on the advancement of customs training and capacity building schemes, coordination of institutional frameworks, and the establishment of One Stop Border Posts (OSBP). A particular success story in the implementation of an OSBP is that of the Chirundu OSBP which is shared by Zimbabwe and Zambia. The implementation of the OSBP concept at Chirundu has reaped a number of positive benefits to the trading community as well as the governments involved.
These benefits include a significant reduction in the prevalence and occurrence of fraudulent activities and rapid clearance of goods as trucks only stop once for all formalities resulting in the reduction of the cost of trade. While in the past vehicle clearance time took an average of four days from arrival to departure at Chirundu border, clearance time has been reduced down to twenty four hours on the proviso that all documents will be in order and the client is able to pay the requisite taxes immediately the assessment is issued. With the implementation of the OSBP at Chirundu, there has also been a related increase in intra-regional competitiveness attributable to the reduced costs of clearing of goods at the border.
It is acknowledged that the TFTA is an ambitious proposal and therefore, it was agreed at the tripartite summit that it would be negotiated in two phases. The first phase is of relevance to this chapter. The first phase of the negotiation process specifically focused on addressing matters which include the harmonisation of rules and regulations on goods, rules of origin, dispute resolution, customs procedures and the simplification of customs documentation and transit procedures. This negotiating stratagem inexorably raises a number of multifaceted issues as each identified issue is without doubt interlinked or connected to other issues identified in the phase.
The objective of the tripartite is to deal with the heterogeneity existent within national policy objectives, the alignment of standards and conformity assessment procedures, trade facilitation, the state of regional bloc progress and compliance to multilateral rules amongst others. Any failure therefore by the tripartite to generate substantive progress towards the attainment of the phase one issues may well endanger the transition to negotiating a successful agreement encompassing the phase two issues.
Customs was identified in the phase one issues and its value and relevance to the success of the TFTA cannot be overemphasised. Thus far, the three secretariats of the REC’s have been cooperating in an untailored framework through the tripartite task force, in the harmonisation and rationalisation of programs and instruments in respect of a number of essential areas of cooperation earmarked as programs of harmonisation of trade regimes of the three REC’s and in the united implementation of regional projects and legal and institutional activities for regional cooperation.
3.2 TRIPARTITE DEVELOPMENTS IN CUSTOMS POLICY AND LEGISLATIVE HARMONISATION:

To date, substantial support has been extended to the tripartite in support of various customs reform and modernisation programs by the World Bank and United States Agency for International Development (USAID) at the national and regional level. In this regard, the Comprehensive Tripartite Trade and Transport Facilitation Programme (CTTTFP) is the over-arching project through which a number of other tripartite projects are being administered.
In terms of the CTTTFP, regulatory and policy reforms which promote the harmonisation and adoption of international instruments and best practices in the area of customs by member states have been developed. These regulatory and policy reforms take account of efforts at national and regional level which are targeted at facilitating cross-border movements. The CTTTFP has also sought to address assorted issues through its projects including customs legislation and procedures, the efficient management of border posts, the development of a single administrative customs document, cooperation on customs enforcement and the design and implementation of a harmonised regional customs bond.
The CTTTFP as an umbrella programme involves a number of diverse initiatives from the three REC’s which have been brought together and are now administered under one over-arching integrated trade facilitation programme. This programme encompasses initiatives in the areas of border and customs procedures as well as OSBP projects, integrated border management and regional customs bonds. The objectives to be addressed through the CTTTFP are aimed towards; a) increasing trade and promoting economic growth in Eastern and Southern Africa through supporting developments in regional policies and in the regional regulatory and economic environment; b) reducing the high costs of trade associated with conducting business in the region and to assist national administrations, working through the REC’s, to address barriers to economic growth; and c) dropping the transit times and transaction costs along the principal corridors in Eastern and Southern Africa through faster border crossings and harmonised trade and transit regulations.
The CTTTFP has achieved considerable progress in a number of areas and programmes which include customs information communications technology (ICT) policies, integrated border management and regulatory reforms. These developmental strides are critically discussed in more detail below.
3.2.1 Customs Information Communications Technology Policy and Connectivity:

The importance of having an effective and efficient ICT processing system in customs cannot be overstated. It is vital for the successful operation of a whole host of modern customs operations including customs automation, cargo tracking, pre-arrival clearances, risk analysis, the electronic submission of documents; information management and electronic single windows. Not only does an efficient ICT system enable faster processing times but it also increases revenue collection, reduces red tape and increases capacity and efficiency through the introduction of new and innovative systems which would otherwise be impractical to introduce in the absence of an efficient ICT system.
In the realm of ICT, the tripartite approved the provision of much needed support for transit trade facilitation and develop a joint programme for the implementation of an accelerated, seamless inter-regional ICT broadband infrastructure network including a harmonised policy and regulatory framework which will govern ICT development in the three REC’s.
Further to this, at a REC level, in the Southern African Development Community (SADC) REC, the first live display of an end to end customs connectivity solution was effectively conducted in Windhoek, Namibia on the 12th of December 2012. Customs connectivity facilitates the sharing of information across borders and between customs administrations from various countries in a seamless manner. This decreases processing times and increases access to reliable real time statistics.
The demonstration involved the movement of information from an Automated Systems for Customs Data (ASYCUDA) World entry in Botswana through a cloud-based user portal to an ASYCUDA World entry in Namibia. This was also effectively, a demonstration of how traders would administer the flow of their information through a safe regional online user portal. This innovative form of regional customs connectivity illustrates the potential of engaging revolutionary technology and modern tools to facilitate trade across the TFTA region as a whole.
The pilot project put into operation by Botswana and Namibia could well be extended across the entire TFTA region once it proves successful. This project is a successful example of work in progress towards regional integration in the area of customs. It is envisaged that the system, which works through cloud computing will be able to maintain enormous volumes of transit data which will assist in future planning.
At the moment however, the model is still under improvement as there remain fragmentary technical issues to be addressed including matters of ownership rights to access, and integrity of use of information.In addition it yet to be thoroughly understood how the system will be able to address issues relating to the integration of customs information, as there is considered to be a shortfall in the designing process in the sense that the end users in the form of the business community were not fully involved in the scope, proof of concept or design of the system.
To date no automated system has been able to share customs information between countries in the three REC’s making up the TFTA. In customs operations, large quantities of the same information are required to prepare export documentation in one country and import documentation in another country for cross-border shipments, and due to lack of shared or connected customs processing systems across the region, all information and processes must be duplicated, effectively increasing the costs of trade and making African goods uncompetitive. This negative predicament could otherwise be avoided if the customs systems were interconnected.
Customs connectivity reduces repetitive data entry, opportunities for errors and fraudulent declarations, and in due course reduces the costs of exports and imports. It ameliorates the compilation of standardised trade statistics for customs administrations and allows greater visibility of the cross-border trade process. It can also facilitate planning and risk assessment before goods arrive at the border and increase revenues through reducing duty avoidance. The connectivity pilot project has been designed in a manner where it will have minimal impact on current customs operations and minimal implementation costs for end users as traders can make use of an online portal to transfer export declaration data across borders and retrieve import declaration data through the existing ASYCUDA world user interface. In turn, customs officials are able to access trade and performance statistics through an online console.
The cloud connectivity approach taken by the Botswana United Revenue Service and Namibian Customs eradicates the encumbrance of maintaining hardware or a regional data centre for the cloud-hosted processes. Cloud-based connectivity can also be further upgraded to provide more ICT resources swiftly as demand increases or as other service functions are developed. Disaster recovery is also efficiently and automatically handled by the cloud platform, improving the continuity of operations.