Galloping International Trade, in the recent times, has led to emergence of new concepts and standards for an effective supervision and regulation of the business processes involved in it. That is why we now hear of trade facilitation and trade supply chain security.
The Customs establishments all over the world are leaving no stone unturned to materialise these two objectives because this is the only way by which they believe that they can enhance their share in the global trade, which consequently has constructive and far-reaching implications for their economies. Being a pro-active organisation, the CBR is also treading on the same path.
Under the National Trade Corridor Improvement Programme (NTCIP), the Pakistan Custom has aimed at the Progressive roll out of the PACCS in the country and has also initiated 'One Customs' project as an interim semi-automated clearance system. Both these initiatives represent crucial segments of CBR's modernisation strategy and the trade facilitation agenda being perused by it.
However, it is for sure that trade facilitation would lose its essence and efficacy if security of the traded goods is not ensured.
Trade security is a guarantee to exercise trade facilitation, while trade facilitation is natural sublimation of trade security. It is a matter of common experience that trade facilitation, without security, involves quite a few hidden / grave risks, and even disasters occur. At the same time, excessive security measures lead to low efficiency, which are major obstacles to social prosperity?
The security aspect of the international trade has attained tremendous importance now especially in presence of world terrorism, organised crimes, and fraud. So, there is an urgent need to secure the international trade through the international supply chain security. It is highly desirable to dilate upon this phenomenon for a better comprehension of it and also to critically appreciate the implications of its implementation for the exports of Pakistan.
This concept implies the use of customs import and Export controls, identified by the WCO, to ensure supply chain integrity and security.
The volume of the world trade has multiplied, creating an earnest need for institutionalisation of intra customs co-operation one hand and Customs business partnership on the other to realise the afore-said objective. This security arrangement envisages "Trilateral Co-operation" among the national Customs of the exporting country, the foreign Customs of the importing country and "Authorised Economic Operators" (exporters or importers), to accord the export consignments their due security status.
Segments of the international supply chain to secure international trade are:
Advance electronic cargo information among member customs administrations for in bound, out bound or transit shipments.
Employment of risk management approach to address security threats.
Use of non-intrusive detection equipments such as x-ray machines and radiation detectors, to inspect high-risk containers or cargo by the customs administration at the behest of another customs administration.
Requiring the business community to meet minimal chain security standard.
Establishment of the Customs-to-Customs Pillar and "Custom-to-Business Pillar", stipulating a set of integrated standard to ensure seamless movement of goods across international borders.
All the afore-said segments, when taken together, form the spectrum of the Integrated Supply Chain Management System (ISCA). Synopses of the important standards, constituting the ISCM system are as under:
SEALING: Use of high security seals to maintain cargo integrity and security.
UNIQUE CONSIGNMENT REFERENCE (UCR): Implementation of the WCO's recommendations on the use of UCR.
EXPORT GOODS DECLARATION: Submission of advance Electronic export goods declaration to customs.
CARGO DECLARATION: Filing advance electronic cargo declaration to the customs of the exporting (or to that of the importing country, eg, under CSI), and the specific stages at which such declaration are required in the event of export by sea, air, or land routes.
TIME LIMIT: The exact time at which the goods declaration has to be submitted by authorised economic operators. This is 24 hours before loading in case of maritime export and 4,2, and hour(s) in case of transportation by air, rail, and road demands respectively.
AUTHORIZED ECONOMIC OPERATORS: Traders or exporters, participating in the integrated information system with customs and beneficiaries of simplified clearance procedures.
AUTHORIZED SUPPLY CHAIN: The concept which all participants in an international trade transaction are approved by Customs as observing specified standards.
IMPLICATIONS FOR THE PAKISTAN'S EXPORTS: Pakistan cannot afford to be left out of the mainstream wherein the modern customs establishments are making an optimum use of innovative/safer procedures and standards to augment their exports.
Therefore, the CBR has signed the Declaration of Principle with the US Customs and Border Protection Department (USCBP), under the Container Security Initiative (CSI), for examination and clearance of US-bound export goods. The CSI is in place in 40 ports across the world with a plan for inclusion of additional 50 by the end of this year.
The containers carrying screened cargo world be sealed prior to their shipment and world not require further inspection at the port of entry in the US. The motive behind singing this Declaration is to ensure and enhance the exports of Pakistan to USA, who is the major trading partner of Pakistan, in addition to EU, and absorb chunk, ie, more than 25% of Pakistan's total exports.
It is felt appropriate to cite here the case of China, who will overtake, as predicated in a study by Goldman-Sachs, Germany in economic output by 2008, Japan 2015, and United State by 2040.
Beijing's 'Go Forth' policy to ride bandwagon of global trade is strikingly concrete. China has agreed, in principle to implement "The Frame Work of Standards to Secure and Facilitate Global Trade". China Customs has already signed a principled statement on co-operation in implementing the container security initiative (CSI) with the US Bureau of Customs and Borders protection, announcing that China and the United State will have constructive co-operation in the area of the counter-terrorism to promote the development of bilateral and international trade to the greatest extent.
Some other vivid / beneficial implications for Pakistan's exports are hereunder:
Adoption and integration of the prescribed "Security Standards" would lead to unhindered movement of the export cargo of Pakistan in the country of destination.
By implementing the pre-requisites of the supply chain security paradigm, the export cargo of Pakistan will be treated as the "Qualifying Cargo" and would have its safe passage accordingly.
Maximum/Optimum Security and privilege to the export cargo of the "Authorised Economic Operators" of Pakistan as the exporters have been voicing their complaints, through their respective association, like ie, Pakistan Hosiery Manufactures Association, against loss of ownership of their export cargo, and causing huge loss to them because of the fraudulent tactics of the freight forwarders.
After signing Protocols and Agreements with the other modern Customs establishments of the world, Pakistan would be in a position to have and share accurate data on export consignments.
Enabling Pakistan to carry out joint inspections, wherever possible (as under the CSI), with a view to sift potentially high-risk cargo from safe cargo.
The will and initiatives to ensures security of the internationally traded goods through high tech procedures and automation, would give Pakistan an ample opportunity to re-orientated and re-align the existing business procedures, which in turn would lead to lesser human interface and smoother flow of their exports and would drastically reduce the cost of doing business.
Price fraud, be it under valuation or overvaluation, has become a major problem in the international trade. As a result of greater interaction with the foreign Customs organisation, overvaluation of the export cargo would be effectively contained which would make the goods, of genuine exporters, more competitive.
Exchange of valuable information on issues of Rules of Origin and Anti-dumping.
Conforming to the international standards on security of the goods, would considerably curtail chances of imposition of non-tariff trade barriers, levied on the basis of packaging, sanitary and phsio sanitary reasons, which are, beyond doubt, damaging export growth of Pakistan.
From the facts and observations, given above, it is crystal clear that assimilation of the latest techniques and maximum interaction with the modern Customs organisations, to ensure security of international trade, is indispensable for greater export growth. However, the responsibility equally lies on the exporters to keep themselves abreast of the prevailing trends so that Pakistan may have its due share in growing economic integration of the world.
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