For decades, global trade liberalization emphasized the basic reduction of tariffs on goods. In the Uruguay Round, the agenda expanded to include, among other things, services, agriculture and intellectual property. Now it appears the World Trade Organization, the global arbiter of global trade, will enter an entirely new realm, but one well-familiar to anyone involved with trade in a hands-on way: trade facilitation.
Trade facilitation - essentially making customs procedures more efficient - was rejected as an agenda item of the Doha Round at the failed Cancun trade ministerial meeting in September 2003. But it's been creeping back into the limelight and, according to some trade experts, stands a very good chance of becoming part of the formal Doha Round agenda before the end of the summer.
"It's a go for negotiations. It's one of the big issues where there is a real potential for progress," Timothy Hauser, deputy undersecretary for international trade at the Commerce Department, said in a speech at World Trade Week in New York on May 19, an event sponsored by the World Trade Institute of Pace University.
Private-sector representatives are also optimistic. "Things seem to be moving forward on that, and we are gratified," said Joe Gavin, vice president for trade policy at the U.S. Council for International Business in Washington.
Trade facilitation will not, however, be an easy issue for the WTO. Though there are many ways the passage of goods across borders can be made more efficient, many countries - particularly in the developing world - will resist changes. But compared with other issues the WTO faces, trade facilitation is relatively uncontroversial, and that's why it could be included in Doha. In Cancun, the entire slate of the so-called Singapore issues (named such because they were first proposed at the 1996 Singapore ministerial meeting of the WTO) was shot down as developing nations stormed out of the meeting. Trade facilitation temporarily ended up in the dust heap along with the other Singapore issues - competition policy, investment and transparency in government procurement.
And there it could have remained but for the aggressive campaign by U.S. Trade Representative Robert Zoellick earlier this year to jump-start the Doha Round following what he called its "Dunkirk" at Cancun. Hoping to save 2004 from becoming a lost year in trade negotiations, Zoellick called for dialogue and then traveled 32,000 miles around the world meeting with some 40 of his counterparts to find areas where progress could be made. In that process, experts say, it became clear that competition policy, investment and transparency in procurement were too unsettling for developing nations for them to be included in Doha.
"Someday those issues are going to make the WTO agenda, and they should, but they are not going to make it this time around. They are too tough for the world to handle right now," said Clayton Yeutter, counsel to the law firm of Hogan & Hartson and U.S. trade representative from 1985 to 1988.
Yet trade facilitation was apparently another matter. In part that is because it doesn't challenge entrenched interests in developing countries - often corrupt ones - in the same magnitude the other issues do. Still, many customs authorities would likely be sent on the painful path of reform if trade facilitation were included in a new trade deal. That is because WTO rules, unlike those of, say, the World Customs Organization, are enforceable by the threat of trade sanctions.
And there's another reason Zoellick may be interested in trade facilitation: Though it's primarily a trade matter, it could yield a security dividend. Enforceable rules on trade facilitation could lead to better data on the origin and routings of international shipments, something that's been an elusive goal for the Department of Homeland Security. "As our port-security agencies struggle to get better information on what is moving in and out of their docks, we are finding that old customs procedures are simply not adequate," Zoellick said in a speech in May.
But the expected resistance from developing nations could make it difficult to achieve a trade-facilitation deal. Trade facilitation generally means improving customs procedures, but what that means in terms of specifics is another matter. "Right now trade facilitation is a nebulous concept. We don't really know what will be on the trade-facilitation agenda," Yeutter said.
A number of issues could arise under that banner, Gavin said. One is basic regulatory transparency. "Wouldn't it be wonderful if all regulations and procedures relating to customs transactions were available on the Internet and in a language that is fairly universal?" he asked.
Another would be an effort to reduce the time it takes for goods to clear customs once they've physically arrived in the country. "Not only is it a problem, but arguably it's the only true indicator of improvement," Gavin said.
Another area is rights of appeal for importing and exporting companies that feel they've been mistreated by customs authorities. Still another is the handling of goods being transshipped through landlocked countries.
The inclusion of trade facilitation could enhance the prospects for a successful outcome of the Doha Round. There's a simple reason for that: It expands the ability for nations to engage in the horse-trading that is at the heart of all successful trade talks. In particular, some believe its inclusion would make it easier for industrialized nations to accept curbs on their agriculture subsidies if developing nations agreed to reform their customs procedures. U.S. trade officials say developing nations should welcome customs reform.
"Trade facilitation offers tremendous opportunities for the developing world," a U.S. trade official said in an interview. "If you don't have a well-functioning port, customs system, or the infrastructure to manage the inflow and outflow of trade, you are at a disadvantage."