Canadian Importers Association
The Wait for Better Global Business Facilitation
Members of the Canadian Importers Association are concerned that customs administrations in North America, the hemisphere and around the world, are not moving fast enough to design and to implement procedures and programs that facilitate the ever-increasing flow of goods across borders.
The Canadian Importers Association has been heavily involved in the Customs Blueprint consultation process. We are now awaiting the release of the Five Year Action Plan, which is expected early in the year 2000. In the meantime, the Canadian government and the business community have been discussing potential trade agreements with the Asia Pacific Economic Cooperation Forum (APEC) and the Free Trade Area of the Americas (FTAA).
| When you consider these three major trade initiatives, coupled with Canada’s Customs Blueprint, it would appear that the business community is at least five years away from getting what it wants most... |
It is also noteworthy that Canada’s new Minister of International Trade, the Honorable Pierre Pettigrew, recently travelled to Seattle for the opening Ministerial Conference of the World Trade Organization (WTO). While there, he outlined Canada’s negotiating position for the upcoming round of WTO negotiations, which is expected to last approximately three to five years.
When you consider these three major trade initiatives, coupled with Canada’s Customs Blueprint, it would appear that the business community is at least five years away from getting what it wants most — better business facilitation measures by customs administrations!
In this context, it is instructive to review what the business community desires in terms of customs administration and business facilitation. In general terms, importers and exporters would like a customs process underpinned by speed, accuracy and simplicity: the swift movement of goods across international borders to facilitate today’s business cycles in a seamless manner. We cannot allow customs officials’ activity to become an obstacle to expedient trade!
Today’s customs process involves the release of goods, followed by final accounting, and payment of the appropriate duties and taxes owing. Although it sounds simple, one can argue that the playing field is not level. After all, there are different procedures and regulations for the customs process in Canada, the United States and other countries. We desperately need harmonized customs procedures and requirements. Cooperation between all customs authorities in NAFTA, APEC, and FTAA countries is essential to facilitate the needs of the business community.
Low-risk companies, including multinationals with good customs compliance histories, should not be handled in the same manner as high-risk companies. Treat those who follow the rules favorably, and treat those who do not in a different manner. The latter group should be subject to physical border inspections and monetary penalties.
Recent discussions at the Americas Business Forum underlined the reality that the business community needs better business facilitation initiatives in the area of customs administration.
It would appear that Canada has the opportunity to demonstrate leadership in this area, especially when one considers the current draft copy of the Customs Blueprint Action Plan.
Canada will take a big step forward when it implements Customs Self-Assessment (CSA) on January 1, 2001. The option will effectively eliminate the release process for those who qualify. It will also provide improved accounting procedures at the back end of the process. Release under CSA will involve the carrier reporting to customs and declaring an enhanced CSA shipment. The CSA approved carrier will identify himself, will be modified, improved and simplified. The process should be paperless. In addition, importers should witness greater speed, accuracy and simplicity in the customs process. This proposed option should be explored more fully by WTO member countries during the next round of negotiations.
It’s a great first step! Hopefully, this concept will be accepted by the importing community once the design phase has been completed and importers begin testing this new process.
With $1.5 billion worth of goods crossing the Canada-U.S. border every day, the CSA appears to be a concept that would speed up the customs process on both sides of the border. We need to start somewhere. Hopefully the United States and other countries will appreciate Canada’s vision and adopt similar programs. Governments can achieve their compliance objectives and decrease administrative costs while importers find the border more transparent in their international logistics supply chain.