Reducing impacts on trade
G20 Issue

Reducing impacts on trade

There are measures that customs can take to mitigate the effects of the COVID-19 pandemic – from electronic clearance of goods to data-based risk management – and the World Customs Organization stands ready to support these efforts

The COVID-19 pandemic, although primarily a public health crisis, has created unprecedented social and economic challenges around the world. Emergency measures to curb the spread of the disease have had an unintended impact on borders and thereby on trade, transport and travel. According to the World Trade Organization’s Trade Forecast 2020, world trade in goods is set to plummet by between 13% and 32% in 2020 due to the COVID-19 pandemic.

As a standards-setting body, the World Customs Organization develops conventions, frameworks for standards, guidelines and compendia based on its members’ best practices. These instruments are approved by the WCO Council, the organisation’s highest decision-making body. If required, WCO members can obtain support with implementation of these global standards, including those covering disaster relief. Indeed, the Revised Kyoto Convention, one of the key WCO instruments, promotes trade facilitation and effective controls through its legal provisions describing the application of simple yet efficient procedures. The convention also contains a dedicated chapter regulating relief consignments, which is particularly important given the current pandemic.

In addition, the concept of coordinated border management is very high on the WCO’s agenda. As part of a whole-of-government response, customs is among the best-placed government authorities to offer and implement measures to facilitate the cross-border movement of relief and essential supplies and to ensure continuity in supply chains. Coordination with neighbouring countries is also vital, especially regarding measures restricting the cross-border movement of people and goods.

The Harmonized System Convention is another WCO flagship instrument, and forms the universal ‘language’ for classifying goods in international trade. In the wake of the COVID-19 pandemic, and in addition to compiling a repository of existing instruments and tools to help shape disaster response by customs administrations worldwide, the WCO has developed new guidance documents drawing on the HS and has shared its members’ practices.

Offering guidance

Three new guidance documents are worth highlighting. The first is a secretariat note for members on how to draw up and use lists of essential goods during a disaster. The other two are an HS classification reference for COVID-19 medical supplies and a list of priority medicines, developed in cooperation with the World Health Organization, to assist customs and economic operators in classifying certain medicines and medical supplies at the international level and to ensure that these essential goods are cleared through borders as swiftly as possible. The WCO has also worked with its private-sector stakeholders through the Private Sector Consultative Group and other international organisations to address any trade and transport challenges and to maintain supply chain continuity.

The pandemic has also led to a surge in counterfeit and substandard medicines and medical equipment. The WCO is helping its members fight this scourge by providing a platform for sharing information and by conducting global enforcement.

Customs’ practices in response to the pandemic, as submitted by 114 WCO members, have been studied by the secretariat. Some measures have been highlighted and categorised in another dedicated secretariat note. If the WCO had to single out the measures of greatest importance, these would be in the areas of coordinated border management, transparency, predictability and digitalisation of customs processes. In addition to being a major trade facilitation measure, digitalisation contributes to applying social distancing measures during outbreaks of infectious diseases such as COVID-19. The WCO has undertaken a project, funded by Japan, to develop guidelines aimed at further assisting members still grappling with COVID-19 and facing any pandemic-like scenarios in the future.

All customs administrations should move towards electronic clearance of goods, single window environments, non-intrusive inspections and risk management based on data analysis, among other measures. The WCO stands ready to offer further assistance to its members in these areas. Strengthened efforts to implement the available international standards and digitalise customs and border procedures are crucial. The G20 leaders’ advocacy and support in this respect would go a long way.