In this global economy, the flow of goods and services across borders, otherwise known as trade, is a critical factor to the health and growth of a country’s economy. Yet many developing countries struggle with legal, institutional, and operational constraints that impede trade expansion.
In order for developing countries to address these issues and thereby capitalize on world trade, countries must cultivate facilitative environments.
The laws, regulations, and decrees play a great role in cultivating an environment conducive to trade and must contain the following:
- Adequate and coherent authority structure for the essential trade-related institutions
- Clearly stated regulations and procedures that adequately balance facilitation and control
- The means to legally employ modern risk management techniques utilizing selective inspections and post-release audits to accomplish their respective missions
- A productive environment of cooperation and procedural coherence with the other government agencies with border control responsibilities.
Among the many laws necessary for effective trade, the establishment of customs law is critical to increased flow of goods and services and to World Trade Organization (WTO) accession. Countries striving for WTO accession must enact compliant customs laws based on various GATT agreements pertinent to customs administrations. The laws should reflect an effective modern customs practices such as organizational structure, seizure and penalty authority for customs violations, collection of foreign trade statistics, joint facilities with neighboring countries, and the acceptance and use of electronic data for customs documentation. The customs department, which is the principal government agency responsible for border control, should have an effective management, well-trained staff, modern equipment, modern facilitative procedures, and an active dialogue with traders respond timely and predictably to issues while efficiently guarding public security.
In addition to the customs department, an efficient trading system depends on an interdependent process that includes other sound trade-related public sector institutions, trade service providers, and the traders themselves. The private sector trade community should contribute expert legal and logistical knowledge to the import/export process and is critical to the efficiency of and overall compliance of international trade movements. Implementation of trade facilitation is a long and complex process that only evolves through strong local ownership and consensus building. If commitment to this reform process is weak, there is a real possibility that the result will be a changed process that does not deliver real reform.
