The World Trade Organization’s Trade Facilitation Agreement (TFA), which came into effect in 2017, has defined a new set of principles to make international trade more accessible and efficient. A new study by the UPU shows that, while the agreement has implications for UPU members, the UPU is already well situated to support member countries’ compliance with the obligations in the TFA.
The TFA aims to remove the “red tape” barriers imposed on cross-border trade, striving to reduce costs and delays at customs points and to harmonize customs procedures globally. It also addresses issues of transparency, standardization and simplification of these procedures, for example, by obliging trade-relevant authorities to accept electronic copies of customs declarations. It also sets new standards on transparency by requiring the publication of procedures, fees and tariffs so that a trader is able to come prepared to send his or her shipment immediately.
After the WTO members ratified the TFA, the UPU’s Council of Administration (CA) instructed the UPU’s International Bureau to review the obligations the TFA would impose on UPU members and the role of the UPU and the Posts in its implementation. The CA welcomed the results of that study during its April 2019 session.
Promoting trade for development
The UPU-WTO relationship has been historically limited to the issue of defining postal services in the WTO services agreement.
“With the growth of e-commerce and the tsunami of packages being sent across borders via the Post, the UPU rules, standards, programs and tools help member countries facilitate trade, especially of micro, small, and medium enterprises (MSMES),” says Paul Donohoe, who manages the UPU’s Digital Economy and Trade Programme.
“This means that our dialogue with WTO is expanding to also relate to e-commerce and trade issues,” he adds.
According to the United Nations, MSMEs comprise more than 90 percent of global businesses and account for 50-60 percent of employment, making them a key partner for economic growth and the provision of decent work.
The postal network allows MSMEs to participate in e-commerce, giving them an affordable and direct means to ship merchandise to customers, reducing the need to cooperate with distributors, customs brokers and retailers.
The UPU is working with its members and supply-chain partners to modernize the network, as well as postal rules and processes, to ensure it is “fit for purpose” in this e-commerce world.
While the TFA could impose increased responsibilities and obligations on designated postal operators, the study also found that the UPU is in an excellent position to help member countries meet these obligations more easily.
“Many of the obligations on member countries under the UPU Acts automatically align Posts with the TFA,” explains Mohamad Fakhreddin, a PhD student in international trade law and economics at the University of Hamburg, who is currently working on the study as an intern at the UPU.
The Acts of the Union comprise a set of permanent and non-permanent rules and regulations on postal services decided and adhered to by UPU member countries.
For example, the UPU has done extensive work to develop new standards and regulations that enable an efficient global postal supply chain model, which includes exchanging information between partners in the supply chain: Posts, transportation, and Customs. The model is facilitated by the UPU’s technical solutions for exchanging electronic advance data (EAD), which address many TFA obligations, such as the request for advance rulings, pre-arrival processing, Customs cooperation and acceptance of copies, among others.
“The UPU goes one-step further than the TFA requirements and takes a more advanced digital approach to the implementation of these obligations, with its provision of electronic data exchange tools such as International Postal System (IPS) and Customs Declaration System (CDS) to facilitate real-time exchanges of data between Posts and Customs,” says Fakhreddin.
UPU’s Easy Export programme supports the TFA’s vision for a “single window” where traders can submit all required documentation and data to participating supply chain authorities and agencies, helping member countries develop their postal network as a “one stop shop” export service for MSMEs.
Moreover, the UPU supports the implementation of TFA obligations on transparency, with the publication of compendia that contain relevant information on member countries exportation procedures via the Post, as well as relevant conditions and rates.
The UPU’s technical assistance and capacity-building activities directed at improving the Post’s operational readiness for e-commerce are also assisting member countries to meet their TFA obligations via the Post.
The study also recommends that member countries take steps to integrate their postal authorities into the National Trade Facilitation Committees (NTFCs) so that they consider the opportunities the postal network brings in their TFA implementation plans.
The study will raise awareness about the TFA within the postal sector and provide recommendations on enforcing or amending the UPU Acts in line with the TFA, and providing technical assistance to ensure that Posts and their supply chain partners are equipped to implement the TFA.
The results of the study will soon be published as an implementation guide.