Customs is mandated to contribute to socio-economic development by, on the one hand, facilitating legitimate trade and, on the other hand, protecting national economies and societies against risks. To respond proactively to the dynamic and rapidly changing environment in the 21st Century, Customs needs to identify and understand the key international, regional and national strategic drivers.
To this end, the 2012 edition of the Customs Environment Scan was released in June 2012. It described key emerging trends concerning global merchandise trade and transport; border rules and measures; business practices; trade facilitation; and Customs enforcement. The document "Customs Environment Scan 2013" refines and updates the earlier version with quantitative figures available up to mid-January 2013. It also briefly summarizes the potential impact on the Customs community from the emerging trends identified.
This summary has been extracted from Section 3 of the Environment Scan - Potential Impact on the Customs Community. It summarizes the content in terms of trends and considers the potential impact on Customs administrations.
World merchandise trade in general has recovered following the global financial crisis. It grew slower than the long-term average, and this trend will continue for near future. Nevertheless, it expanded more rapidly than world production and recorded the highest level in value terms. It is also expected to grow in the future. This infers that Customs in many Members is required to process more transactions with the same or less resources especially in times of fiscal austerity.
World merchandise trade has changed its patterns in recent decades. The share of developing countries in world merchandise trade has increased. At the same time, global production specialization has advanced, particularly in manufactured goods. The share of intermediate goods as a percentage of total global merchandise exports has greatly increased. The shift in trade patterns impacts the types of transactions processed by Customs.
The international supply chain requires goods to cross borders promptly and predictably. Unnecessary delays at borders increase trade costs, erode the competitiveness of traders, and damage the international supply chain. In addition, the rise in the express cargo industry requires swift release of time-sensitive goods at borders. The needs of modern international business models exert pressure on Customs to process goods effectively and efficiently and to minimize delays at borders.
The international community has increasingly focused on the resilience of the supply chain after terrorist attacks, natural disasters, or other incidents. Customs needs to prepare in such cases in order to better facilitate the movement of humanitarian goods by all transport modes and through better coordinated management with other government agencies.
With new border rules and measures, world merchandise trade is more complicated than in the past. A number of trade measures were recently introduced under the WTO/GATT rules. Recent proliferation of RTAs and EPZs adds further complexity to goods in terms of the geographic characteristics of international trade. Growing concerns regarding key Customs enforcement areas, such as drug enforcement; security; health, safety and IPRs; and the environment also resulted in new border rules and measures not only in importing countries but also in exporting countries. Once the WTO DDA negotiations are concluded, there are a number of areas that may impact Customs, including trade facilitation. Thus, Customs in importing and exporting countries is increasing its workload in order to implement new rules and measures at borders.
Trade facilitation has been repeatedly highlighted by a variety of high-level policy entities. A number of trade facilitation programmes are operating, or are expected to be initiated in the coming years, and Customs modernization is an important component of these programmes. Capacity building activities for Customs modernization are expected to increase within the framework of the Aid for Trade initiative and the future WTO Agreement on Trade Facilitation, amongst others. Customs is required to be involved in more technical assistance and capacity building on trade facilitation.
Domestic resource mobilization is a significant priority in many developing countries, and thus there is new pressure on States to ensure revenues are collected in a fair, effective, and efficient manner. Revenue loss significantly undermines national economic development and competitiveness. A comprehensive and innovative approach is necessary when trying to formalize informal trade by raising compliance with border requirements. As a major contributor to government tax revenue in many countries, Customs is required to collect revenue in a fair, effective, and efficient manner.
Last but not least, detailed and comprehensive trade data is needed when analysing global and regional trends and patterns of illicit trade, including dangerous goods and goods related to environmental crimes. Current trade statistics collected by Customs at borders fail to meet the demand when measuring values added to the goods, and capturing figures related to informal trade and intra-firm trade in most countries. Customs needs to revisit how best to capture trade data to meet demands in the international community.