International trade is the exchange of capital and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product. While international trade has existed throughout history, its economic and political importance has been on the rise in recent centuries. Carrying out trade at an international level is a complex process when compared to domestic trade; when trade takes place between two or more nations factors like currency, government policies, judicial system and markets influence the trade. International economic and trade organizations address the process of trade as the political relations between two countries influences the trade between them and the obstacles of trading affect the mutual relationship adversely. To smoothen and justify the process of trade between countries of different economic standing, some international economic organisations were formed; these organisations work towards the growth of international trade.
A product, transferred or sold from a party in one country to a party in another country is an export from the originating country, an import to the country receiving that product. Imports and exports are accounted for in a country's current account in the balance of payments. Trading globally gives consumers and countries the opportunity to be exposed to new markets and products; every kind of product can be found in the international market: food, spare parts, jewellery, stocks and water. Services are traded: tourism, banking and transportation Advanced technology, industrialisation and multinational corporations have major impact on the international trade system. Increasing international trade is crucial to the continuance of globalisation. Nations would be limited to the goods and services produced within their own borders without international trade. International trade is, in principle, not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not.
Carrying out trade at an international level is a more complex process than domestic trade. The main difference is that international trade is more costly than domestic trade; this is due to the fact that a border imposes additional costs such as tariffs, time costs due to border delays, costs associated with country differences such as language, the legal system, or culture. Another difference between domestic and international trade is that factors of production such as capital and labor are more mobile within a country than across countries. Thus, international trade is restricted to trade in goods and services, only to a lesser extent to trade in capital, labour, or other factors of production. Trade in goods and services can serve as a substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example of this is the import of labor-intensive goods by the United States from China.
Instead of importing Chinese labor, the United States imports goods that were produced with Chinese labor. One report in 2010 suggested that international trade was increased when a country hosted a network of immigrants, but the trade effect was weakened when the immigrants became assimilated into their new country; the history of international trade chronicles notable events that have affected trading among various economies. There are several models which seek to explain the factors behind international trade, the welfare consequences of trade and the pattern of trade; the following table is a list of the 21 largest trading nations according to the World Trade Organization. Source: International Trade Centre President George W. Bush observed World Trade Week on May 18, 2001, May 17, 2002. On May 13, 2016, President Barack Obama proclaimed May 15 through May 21, 2016, World Trade Week, 2016. On May 19, 2017, President Donald Trump proclaimed May 21 through May 27, 2017, World Trade Week, 2017.
World Trade Week is the third week of May. Every year the President declares that week to be World Trade Week. Lists List of countries by current account balance List of countries by imports List of countries by exports List of international trade topics Jones, Ronald W.. "Comparative Advantage and the Theory of Tariffs". The Review of Economic Studies. 28: 161–175. Doi:10.2307/2295945. McKenzie, Lionel W.. "Specialization and Efficiency in World Production". The Review of Economic Studies. 21: 165–180. Doi:10.2307/2295770. Samuelson, Paul. "A Ricardo-Sraffa Paradigm Comparing the Gains from Trade in Inputs and Finished Goods". Journal of Economic Literature. 39: 1204–1214. Doi:10.1257/jel.39.4.1204. Data on the value of exports and imports and their quantities broken down by detailed lists of products are available in statistical collections on international trade published by the statistical services of intergovernmental and supranational organisations and national statistical institutes; the definitions and methodological concepts applied for the various statistical collections on international trade differ in terms of definition and coverage.
Metadata providing information on definitions and methods are published along with the data. United Nations Commodi
World Trade Organization
The World Trade Organization is an intergovernmental organization, concerned with the regulation of international trade between nations. The WTO commenced on 1 January 1995 under the Marrakesh Agreement, signed by 124 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade, which commenced in 1948, it is the largest international economic organization in the world. The WTO deals with regulation of trade in goods and intellectual property between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments; the WTO prohibits discrimination between trading partners, but provides exceptions for environmental protection, national security, other important goals. Trade-related disputes are resolved by independent judges at the WTO through a dispute resolution process; the WTO's current Director-General is Roberto Azevêdo, who leads a staff of over 600 people in Geneva, Switzerland.
A trade facilitation agreement, part of the Bali Package of decisions, was agreed by all members on 7 December 2013, the first comprehensive agreement in the organization's history. On 23 January 2017, the amendment to the WTO Trade Related Aspects of Intellectual Property Rights Agreement marks the first time since the organization opened in 1995 that WTO accords have been amended, this change should secure for developing countries a legal pathway to access affordable remedies under WTO rules. Studies show that the WTO boosted trade, that barriers to trade would be higher in the absence of the WTO; the WTO has influenced the text of trade agreements, as "nearly all recent reference the WTO explicitly dozens of times across multiple chapters... in many of these same PTAs we find that substantial portions of treaty language—sometime the majority of a chapter—is copied verbatim from a WTO agreement." The WTO's predecessor, the General Agreement on Tariffs and Trade, was established by a multilateral treaty of 23 countries in 1947 after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation—such as the World Bank and the International Monetary Fund.
A comparable international institution for trade, named the International Trade Organization never started as the U. S. and other signatories did not ratify the establishment treaty, so GATT became a de facto international organization. Seven rounds of negotiations occurred under GATT; the first real GATT trade rounds concentrated on further reducing tariffs. The Kennedy Round in the mid-sixties brought about a GATT anti-dumping Agreement and a section on development; the Tokyo Round during the seventies represented the first major attempt to tackle trade barriers that do not take the form of tariffs, to improve the system, adopting a series of agreements on non-tariff barriers, which in some cases interpreted existing GATT rules, in others broke new ground. Because not all GATT members accepted these plurilateral agreements, they were informally called "codes". Several of these codes were amended in the Uruguay Round and turned into multilateral commitments accepted by all WTO members. Only four remained plurilateral, but in 1997 WTO members agreed to terminate the bovine meat and dairy agreements, leaving only two.
Despite attempts in the mid-1950s and 1960s to establish some form of institutional mechanism for international trade, the GATT continued to operate for half a century as a semi-institutionalized multilateral treaty regime on a provisional basis. Well before GATT's 40th anniversary, its members concluded that the GATT system was straining to adapt to a new globalizing world economy. In response to the problems identified in the 1982 Ministerial Declaration, the eighth GATT round—known as the Uruguay Round—was launched in September 1986, in Punta del Este, Uruguay, it was the biggest negotiating mandate on trade agreed: the talks aimed to extend the trading system into several new areas, notably trade in services and intellectual property, to reform trade in the sensitive sectors of agriculture and textiles. The Final Act concluding the Uruguay Round and establishing the WTO regime was signed 15 April 1994, during the ministerial meeting at Marrakesh and hence is known as the Marrakesh Agreement.
The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations. GATT 1994 is not however the only binding agreement included via the Final Act at Marrakesh; the agreements fall into six main parts: the Agreement Establishing the WTO the Multilateral Agreements on Trade in Goods the General Agreement on Trade in Services the Agreement on Trade-Related Aspects of Intellectual Property Rights dispute settlement reviews of governments' trade policiesIn terms of the WTO's principle relating to tariff "ceiling-binding", the Uruguay Round has been successful in increasing binding commitments by both developed and developing countries, as may be seen in the percentages of tariffs bound before and after the 1986–1994
Protectionism is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, a variety of other government regulations. Proponents claim that protectionist policies shield the producers and workers of the import-competing sector in the country from foreign competitors. However, they reduce trade and adversely affect consumers in general, harm the producers and workers in export sectors, both in the country implementing protectionist policies, in the countries protected against. There is a consensus among economists that protectionism has a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth; some scholars have implicated protectionism as the cause of some economic crises, most notably the Great Depression. However, trade liberalization can sometimes result in large and unequally distributed losses and gains, can, in the short run, cause significant economic dislocation of workers in import-competing sectors.
A variety of policies have been used to achieve protectionist goals. These include: Tariffs and import quotas are the most common types of protectionist policies. A tariff is an excise tax. Imposed to raise government revenue, modern tariffs are now more designed to protect domestic producers that compete with foreign importers. An import quota is a limit on the volume of a good that may be imported established through an import licensing regime. Protection of technologies, patents and scientific knowledge Restrictions on foreign direct investment, such as restrictions on the acquisition of domestic firms by foreign investors. Administrative barriers: Countries are sometimes accused of using their various administrative rules as a way to introduce barriers to imports. Anti-dumping legislation: "Dumping" is the practice of firms selling to export markets at lower prices than are charged in domestic markets. Supporters of anti-dumping laws argue that they prevent import of cheaper foreign goods that would cause local firms to close down.
However, in practice, anti-dumping laws are used to impose trade tariffs on foreign exporters. Direct subsidies: Government subsidies are sometimes given to local firms that cannot compete well against imports; these subsidies are purported to "protect" local jobs, to help local firms adjust to the world markets. Export subsidies: Export subsidies are used by governments to increase exports. Export subsidies have the opposite effect of export tariffs because exporters get payment, a percentage or proportion of the value of exported. Export subsidies increase the amount of trade, in a country with floating exchange rates, have effects similar to import subsidies. Exchange rate control: A government may intervene in the foreign exchange market to lower the value of its currency by selling its currency in the foreign exchange market. Doing so will raise the cost of imports and lower the cost of exports, leading to an improvement in its trade balance. However, such a policy is only effective in the short run, as it will lead to higher inflation in the country in the long run, which will in turn raise the real cost of exports, reduce the relative price of imports.
International patent systems: There is an argument for viewing national patent systems as a cloak for protectionist trade policies at a national level. Two strands of this argument exist: one when patents held by one country form part of a system of exploitable relative advantage in trade negotiations against another, a second where adhering to a worldwide system of patents confers "good citizenship" status despite'de facto protectionism'. Peter Drahos explains that "States realized that patent systems could be used to cloak protectionist strategies. There were reputational advantages for states to be seen to be sticking to intellectual property systems. One could attend the various revisions of the Paris and Berne conventions, participate in the cosmopolitan moral dialogue about the need to protect the fruits of authorial labor and inventive genius...knowing all the while that one's domestic intellectual property system was a handy protectionist weapon." Political campaigns advocating domestic consumption Preferential governmental spending, such as the Buy American Act, federal legislation which called upon the United States government to prefer US-made products in its purchases.
In the modern trade arena many other initiatives besides tariffs have been called protectionist. For example, some commentators, such as Jagdish Bhagwati, see developed countries efforts in imposing their own labor or environmental standards as protectionism; the imposition of restrictive certification procedures on imports are seen in this light. Further, others point out that free trade agreements have protectionist provisions such as intellectual property and patent restrictions that benefit large corporations; these provisions restrict trade in music, pharmaceuticals and other manufactured items to high cost producers with quotas from low cost producers set to zero. Protectionism was associated with economic theories such as mercantilism, import substitution. In the 18th century, Adam Smith famously warned against the "interested sophistry" of industry
Timeline of international trade
The history of international trade chronicles notable events that have affected the trade between various countries. In the era before the rise of the nation state, the term'international' trade cannot be applied, but means trade over long distances. In the 21st century, the European Union and the United States are the three largest trading markets in the world. Records from the 19th century BE attest to the existence of an Assyrian merchant colony at Kane sh in Cappuccino; the domestication of camel allows Arabian nomads to control long distance trade in spices and silk from the Far East. The Egyptians trade in the Red Sea, importing spice from Arabia. Indian goods are brought in Arabian vessels to Aden; the "ships of Tarnish", a Syrian fleet equipped at Zion Gerber, make several trading voyages to the East bringing back gold, silver and precious stones. Goliath-Piles er III attacks Gaza; the Greek Ptolemaic dynasty exploits trading opportunities with India prior to the Roman involvement. The cargo from the India and Egypt trade is shipped to Aden.
The Silk Road is established after the diplomatic travels of the Han Dynasty Chinese envoy Zhang Ian to Central Asia, with Chinese goods making their way to India and the Roman Empire, vice versa. With the establishment of Roman Egypt, the Romans initiate trade with India; the goods from the East African trade are landed at one of the three main Roman ports, Berenice or Moos Hormones. Moos Hormones and Berenice appear to have been important ancient trading ports. Hanger controls the Incense trade routes across Arabia to the Mediterranean and exercises control over the trading of aromatics to Babylon in the 1st century BC. Additionally, it served as a port of entry for goods shipped from India to the East. Due to its prominent position in the incense trade, Yemen attracts settlers from the fertile crescent. Pres-Islamic Mecca's use the old Incense Route to benefit from the heavy Roman demand for luxury goods. In Java and Borneo, the introduction of Indian culture creates a demand for aromatics.
These trading outposts serve the Chinese and Arab markets. Following the demise of the incense trade Yemen takes to the export of coffee via the Red Sea port of la-Mocha; the Abbas ids use Alexandria, Tammie and Sirrah as entry ports to India and China. At the eastern terminus of the Silk Road, the Tang Dynasty Chinese capital at Chang'an becomes a major metropolitan center for foreign trade and residence; this role would be assumed by Hangzhou during the Song Dynasty. Guangzhou was China's greatest international seaport during the Tang Dynasty, but its importance was eclipsed by the international seaport of Lanzhou during the Song Dynasty. Merchants arriving from India in the port city of Aden pay tribute in form of musk, camphor and sandalwood to Ibn Riyadh, the sultan of Yemen. Indian exports of spices find mention in the works of Ibo Khurdadhbeh, AL-Afghani, Lakisha bin Trimaran and Al Kalashnikov; the Hanseatic League secures trading privileges and market rights in England for goods from the League's trading cities in 1157.
Due to the Turkish hold on the Levant during the second half of the 15th century the traditional Spice Route shifts from the Persian Gulf to the Red Sea. In 1492 a Spanish expedition commanded by Christopher Columbus arrive in America. Portuguese diplomat Peron ad Convivial undertakes a mission to explore the trade routes of the Near East and the adjoining regions of Asia and Africa; the exploration commenced from Santana to Barcelona, Alexandria, Cairo and to India. Portuguese explorer and adventurer Ascot DA Gama is credited with establishing another sea route from Europe to India. In the 1530s, the Portuguese ship spices to Hormuz. Japan introduced a system of foreign trade licenses to prevent smuggling and piracy in 1592; the first Dutch expedition left from Amsterdam for South East Asia. A Dutch convoy sailed in 1598 and returned one year with 600,000 pounds of spices and other East Indian products; the Dutch East India Company is formed in 1602. The first English outpost in the East Indies is established in Sumatra in 1685.
Japan introduces the closed door policy regarding trade in 1639. The 17th century saw military disturbances around the Ottawa river trade route. During the late 18th century, the French built military forts at strategic locations along the main trade routes of Canada; these forts checked the British advances, served as trading posts which included the Native Americans in fur trade and acted as communications posts. In 1799, The Dutch East India company the world's largest company goes bankrupt due to the rise of competitive free trade. Japan is served by the Portuguese from Macao and by the Dutch. Despite the late entry of the United States into the spice trade, merchants from Salem, Massachusetts trade profitably with Sumatra during the early years of the 19th century. In 1815, the first commercial shipment of nutmegs from Sumatra arrived in Europe. Grenada becomes involved in the spice trade; the Siamese-American Treaty of 1833 calls for free trade, except for export of rice and import of munitions of war.
Opium War – Britain invades China to overturn the Chinese ban on opium imports. Britain unilaterally adopts a policy of free trade and abolishes the Corn Laws in 1846; the first international free trade agreement, the Cob den-Chevalier
Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions may include various forms of trade barriers and restrictions on financial transactions. An embargo is similar, but implies a more severe sanction. Economic sanctions aim to change the behavior of elites in the target country. However, the efficacy of sanctions is debatable and sanctions can have unintended consequences. Economic sanctions are not imposed because of economic circumstances—they may be imposed for a variety of political and social issues. Economic sanctions can be used for achieving international purposes. An embargo is the partial or complete prohibition of commerce and trade with a particular country/state or a group of countries. Embargoes are considered strong diplomatic measures imposed in an effort, by the imposing country, to elicit a given national-interest result from the country on which it is imposed.
Embargoes are considered legal barriers to trade, not to be confused with blockades, which are considered to be acts of war. Embargoes can mean limiting or banning export or import, creating quotas for quantity, imposing special tolls, banning freight or transport vehicles, freezing or seizing freights, bank accounts, limiting the transport of particular technologies or products for example CoCom during the cold-war. In response to embargoes, a closed economy or autarky develops in an area subjected to heavy embargo. Effectiveness of embargoes is thus in proportion to the extent and degree of international participation. Embargo can be an opportunity to some countries to develop faster a self-sufficiency. Economic sanctions are used as a tool of foreign policy by many governments. Economic sanctions are imposed by a larger country upon a smaller country for one of two reasons. —either the latter is a threat to the security of the former nation or that country treats its citizens unfairly. They can be used as a coercive measure for achieving particular policy goals related to trade or for humanitarian violations.
Economic sanctions are used as an alternative weapon instead of going to war to achieve desired outcomes. Some policy analysts believe imposing. According to the data of Hufbauer et al. regime change, the most frequent foreign-policy objective of economic sanctions, accounts for just over 39 percent of cases of their imposition. Researchers debate the effectiveness of economic sanctions in their ability to achieve their stated purpose. Hufbauer et al. claimed. When Robert A. Pape examined their study, he claimed that only five of their forty so-called "successes" stood up, reducing economic sanctions' success rate to 4% in his analysis. Success of sanctions as a form of measuring effectiveness has been debated by scholars of economic sanctions. Success of a single sanctions-resolution does not automatically lead to effectiveness, unless the stated objective of the sanctions regime is identified and reached. Imposing sanctions on an opponent affects the economy of the imposing country to some degree.
If import restrictions are promulgated, consumers in the imposing country may have restricted choices of goods. If export restrictions are imposed or if sanctions prohibit companies in the imposing country from trading with the target country, the imposing country may lose markets and investment opportunities to competing countries. British diplomat Jeremy Greenstock suggests that the reason sanctions are popular is not that they are known to be effective, but "that there is nothing else between words and military action if you want to bring pressure upon a government". Companies must be aware of embargoes. Embargo check is difficult for both exporters to follow. Before exporting or importing to other countries, they must be aware of embargoes or risk facing unintended punitive measures for violating sanctions. Subsequently, firms need to make sure that they are not dealing with embargoed countries by checking those related regulations, they need a license in order to ensure a smooth export or import business.
Sometimes the situation becomes more complicated with the changing of politics of a country. Embargoes keep changing. In the past, many companies relied on spreadsheets and manual process to keep track of compliance issues related to incoming and outgoing shipments, which takes risks of these days help companies to be compliant on such regulations if they are changing on a regular basis. If an embargo situation exists, the software blocks the transaction for further processing; the United States Embargo of 1807 involved a series of laws passed by the U. S. Congress 1806–1808, during the second term of President Thomas Jefferson. Britain and France were engaged in a major war. S. wanted to remain neutral and to trade with both sides, but neither side wanted the other to import American supplies. American policy aimed to use the new laws to avoid war and to force both France and Britain to respect American rights; the embargo failed to achieve its aims, Jefferson repealed the embargo legislation in March 1809.
One of the most comprehensive attempts at an embargo occurred during the Napoleonic Wars of 1803-1815. In an att
Smuggling is the illegal transportation of objects, information or people, such as out of a house or buildings, into a prison, or across an international border, in violation of applicable laws or other regulations. There are various motivations to smuggle; these include the participation in illegal trade, such as in the drug trade, illegal weapons trade, exotic wildlife trade, illegal immigration or illegal emigration, tax evasion, providing contraband to a prison inmate, or the theft of the items being smuggled. Smuggling is a common theme in literature, from Bizet's opera Carmen to the James Bond spy books Diamonds are Forever and Goldfinger; the verb smuggle, from Low German smuggeln or Dutch smokkelen a frequentative formation of a word meaning "to sneak", most entered the English language during the 1600s–1700s. Smuggling has a long and controversial history dating back to the first time at which duties were imposed in any form, or any attempt was made to prohibit a form of traffic. Smuggling is associated with efforts by authorities to prevent the importation of certain contraband items or non-taxed goods.
In England smuggling first became a recognised problem in the 13th century, following the creation of a national customs collection system by Edward I in 1275. Medieval smuggling tended to focus on the export of taxed export goods — notably wool and hides. Merchants however, sometimes smuggled other goods to circumvent prohibitions or embargoes on particular trades. Grain, for instance, was prohibited from export, unless prices were low, because of fears that grain exports would raise the price of food in England and thus cause food shortages and / or civil unrest. Following the loss of Gascony to the French in 1453, imports of wine were sometimes embargoed during wars to try and deprive the French of the revenues that could be earned from their main export. Most studies of historical smuggling have been based on official sources — such as court records, or the letters of Revenue Officers. According to Dr Evan Jones, the trouble with these is that'they only detail the activities of those dumb enough to get caught'.
This has led him and others, such as Prof Huw Bowen to use commercial records to reconstruct smuggling businesses. Jones' study focuses on smuggling in Bristol in the mid-16th century, arguing that the illicit export of goods like grain and leather represented a significant part of the city's business, with many members of the civic elite engaging in it. Grain smuggling by members of the civic elite working with corrupt customs officers, has been shown to have been prevalent in East Anglia during the 16th century. In England wool was smuggled to the continent in the 17th century, under the pressure of high excise taxes. In 1724 Daniel Defoe wrote of Lymington, Hampshire, on the south coast of England "I do not find they have any foreign commerce, except it be what we call smuggling and roguing; the high rates of duty levied on tea and wine and spirits, other luxury goods coming in from mainland Europe at this time made the clandestine import of such goods and the evasion of the duty a profitable venture for impoverished fishermen and seafarers.
In certain parts of the country such as the Romney Marsh, East Kent and East Cleveland, the smuggling industry was for many communities more economically significant than legal activities such as farming and fishing. The principal reason for the high duty was the need for the government to finance a number of expensive wars with France and the United States. Before the era of drug smuggling and human trafficking, smuggling had acquired a kind of nostalgic romanticism, in the vein of Robert Louis Stevenson's Kidnapped: "Few places on the British coast did not claim to be the haunts of wreckers or mooncussers; the thievery was romanticized until it seemed a kind of heroism. It did not have any taint of criminality and the whole of the south coast had pockets vying with one another over whose smugglers were the darkest or most daring; the Smugglers Inn was one of the commonest names for a bar on the coast". In Henley Road, smuggling in colonial times was a reaction to the heavy taxes and regulations imposed by mercantilist trade policies.
After American independence in 1783, smuggling developed at the edges of the United States at places like Passamaquoddy Bay, St. Mary's in Georgia, Lake Champlain, Louisiana. During Thomas Jefferson's embargo of 1807-1809, these same places became the primary places where goods were smuggled out of the nation in defiance of the law. Like Britain, a gradual liberalization of trade laws as part of the free trade movement meant less smuggling. In 1907 President Theodore Roosevelt tried to cut down on smuggling by establishing the Roosevelt Reservation along the United States-Mexico Border. Smuggling revived in the 1920s during Prohibition, drug smuggling became a major problem after 1970. In the 1990s, when economic sanctions were imposed on Serbia, a large percent of the population lived off smuggling petrol and consumer goods from neighboring countries; the state unofficially allowed this to continue or otherwise the entire economy would have collapsed. In modern times, as many first-world countries have struggled to contain a rising influx of immigrants, the smuggling of people across national borders has become a lucrative extra-legal activity, as well as the dark side, people-trafficking of women who m
World Customs Organization
The World Customs Organization is an intergovernmental organization headquartered in Brussels, Belgium. The WCO is noted for its work in areas covering the development of international conventions and tools on topics such as commodity classification, rules of origin, collection of customs revenue, supply chain security, international trade facilitation, customs enforcement activities, combating counterfeiting in support of Intellectual Property Rights, drugs enforcement, illegal weapons trading, integrity promotion, delivering sustainable capacity building to assist with customs reforms and modernization; the WCO maintains the international Harmonized System goods nomenclature, administers the technical aspects of the World Trade Organization Agreements on Customs Valuation and Rules of Origin. On August 23, 1947, the Committee for European Economic Cooperation created a European Customs Union Study Group to examine economic and technical issues of inter-European Customs Union concerning the rules of the General Agreement on Tariffs and Trade.
In total, six ECUSG meetings were held in four years from November 1947 to June 1950. This work of ECUSG led to the adoption in 1950 of the Convention establishing the Customs Co-operation Council, signed in Brussels. On January 26, 1953, the CCC’s inaugural session took place with the participation of 17 founding members. CCC membership subsequently expanded to cover all regions of the globe. In 1994, the organization adopted the World Customs Organization. Today, WCO members are responsible for customs controls in 182 countries representing more than 98 per cent of all international trade; the WCO is internationally acknowledged as the global centre of customs expertise and plays a leading role in the discussion, development and implementation of modern customs systems and procedures. It is responsive to the needs of its members and its strategic environment, its instruments and best-practice approaches are recognized as the basis for sound customs administration throughout the world; the WCO’s primary objective is to enhance the efficiency and effectiveness of member customs administrations, thereby assisting them to contribute to national development goals revenue collection, national security, trade facilitation, community protection, collection of trade statistics.
In order to achieve its objectives, the WCO has adopted a number of customs instruments, including but not limited to the following: 1) The International Convention on the Harmonized Commodity Description and Coding System was adopted in 1983 and came into force in 1988. The HS multipurpose goods nomenclature is used as the basis for customs tariffs and for the compilation of international trade statistics, it comprises about 5,000 commodity groups, each identified by a six digit code arranged in a legal and logical structure with well-defined rules to achieve uniform classification. The HS is used for many other purposes involving trade policy, rules of origin, monitoring of controlled goods, internal taxes, freight tariffs, transport statistics, quota controls, price monitoring, compilation of national accounts, economic research and analysis. 2) The International Convention on the Simplification and Harmonization of Customs procedures was adopted in 1974 and was subsequently revised in 1999.
The RKC comprises several key governing principles: transparency and predictability of customs controls. It promotes trade facilitation and effective controls through its legal provisions that detail the application of simple yet efficient procedures and contains new and obligatory rules for its application; the WCO revised Kyoto Convention is sometimes confused with the Kyoto Protocol, a protocol to the United Nations Framework Convention on Climate Change. 3) ATA Convention and the Convention on Temporary Admission. Both the ATA Convention and the Istanbul Convention are WCO instruments governing temporary admission of goods; the ATA system, integral to both Conventions, allows the free movement of goods across frontiers and their temporary admission into a customs territory with relief from duties and taxes. The goods are covered by a single document known as the ATA carnet, secured by an international guarantee system. 4) The Arusha Declaration on Customs Integrity was adopted in 1993 and revised in 2003.
The Arusha Declaration is a non-binding instrument which provides a number of basic principles to promote integrity and combat corruption within customs administrations. 5) The SAFE Framework of Standards to Secure and Facilitate Global Trade was adopted in 2005. The SAFE Framework is a non-binding instrument that contains supply chain security and facilitation standards for goods being traded internationally, enables integrated supply chain management for all modes of transport, strengthens networking arrangements between customs administrations to improve their capability to detect high-risk consignments, promotes cooperation between customs and the business community through the Authorized Economic Operator concept, champions the seamless movement of goods through secure international trade supply chains. 6) The Columbus Program is a customs capacity building p