... Not Taking Customs for Granted

May 25, 1999

25 May 1999

Challenge for Trade Ministers at WTO Meeting in Seattle: Not Taking Customs for Granted

The following article is excerpted from "The Journal of Commerce" edition of 25 May 1999.

For those who remember "Jerry McGuire" the phrase, "Show me the money" is forever etched in memory. There was, however, another thread that wove its way through that box-office hit that was almost as memorable: "It was not a memo, it was a mission statement."....

We write in this column about customs issues. In the main, we take your tie to ask that you read of "memorandum" of the day. We point out the good services of the customs agencies of the world as well as the shortcomings, mistakes and inefficiencies particularly of the US Customs Service. It is a "cynical world" as Jerry pointed out. We all find it easy to complain about our government and hard to suggest solutions for improvement.

The challenge in making suggestions for solutions to current customs problems is to be creative in what is essentially a staid environment. Whenever I attempt to engage a senior company official in a discussion about some customs procedure and how to make changes that will save the company money, I see their eyes glaze over. Boards of directors do not give bonuses for implementing a new customs procedure.

One recurring theme we write about is "thinking outside the box" and the need to form a partnership between customs agencies and businesses. The links between customs and the trade are there whether we like it or not. A company can view its customs regulators as the enemy or it can assume greater responsibility for its own compliance and seek to obtain preferential status with that regulator. Government can be intrusive into our business life or it can be unobtrusive. Remember your civics classes, government is a reflection of the people.

In the area of customs administration of the international cross-border transaction, what do we want our government to be? Do we want the original tollbooth keeper that will not let the goods or passengers pass until the trade pays the tribute? Is the better model that which collects extensive data about the entire transaction in order to report to some government analyst how business is performing? Or is there another model that will protect the legitimate concerns of society without unnecessary obstacles and costs?

Let me suggest that each customs agency has an agenda or "mission" that it believes is best for that country. For some, the agenda is to collect as much revenue as possible. Recently one country that is using a pre-shipment inspection company to perform much of its customs clearance responsibilities bragged that it had uplifted the value on more than 80 per cent of imports. Now there is a country whose customs "mission" is to collect as much revenue as possible regardless of the harm done to its own economy. Their motto seems to be "Show me the money"!

Each of you can tell some other customs agency horror story in our global system.... The United Nations completed a study several years ago that estimated the cost of compliance with procedural requirements to clear customs represents between 2 per cent and 10 per cent of the overall products costs. That is a pretty hefty hidden commission to pay in addition to the usual import tariff and customs processing fee.

Jerry McGuire set about to prove that there could be humanity in the sports-agent business and still be successful. Similarly the enlightened nations of the world are working on an international customs agenda that may prove to contain a comparable tenet in the customs clearance business. This new agenda may be just what is needed for customs formalities in the next century.

As a result of the Singapore World Trade Organization (WTO) ministerial conference in December 1997, under the title of "trade facilitation", WTO members are seriously at work developing an outline of what should be the international customs mission statement. The pattern for this mission statement comes from the W


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