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SG Closing Statement, WCO/OCO Workshop
WORLD CUSTOMS ORGANISATION (WCO)/ OCEANIA CUSTOMS ORGANISATION (OCO)
FRAMEWORK OF STANDARDS WORKSHOP
24 August 2007, Suva, Fiji

CLOSING STATEMENT BY MR GREG URWIN
SECRETARY GENERAL, PACIFIC ISLANDS FORUM SECRETARIAT


Distinguished Participants
Resource Persons

It is a pleasure to be here this afternoon to close this workshop on the WCO/OCO Framework of Standards, jointly organised by the World Customs Organisation and the Oceania Customs Organisation as part of the Regional Trade Facilitation Programme.

2. Given the rapid pace of change in our landscape, change driven by developments at global and regional level, I am sure you will agree with me that this initiative is an especially timely one. It is this same pace of change which drives many of the initiatives we are pursuing at the Forum including, notably, the Pacific Plan.

3. I would like to begin by saying a little about the Plan and what it may mean for countries, particularly in the area of Customs Administration, in order, perhaps, to put the issues that you have considered over the last few days in a slightly broader, developmental context.


Regionalism and the Pacific Plan

4. And let me, if I may, also say a little about what led Forum Leaders to call for a Pacific Plan to strengthen regional cooperation and integration, based on their Vision for the type of future they want for their people. They recognised that, as the changes brought about by globalisation intensify, so should our ability to make our regional cooperation more relevant and effective.

5. Work undertaken in the development of the Pacific Plan has considered several different concepts of regionalism and concluded that, in broad terms, there are two key areas which might be expected to provide the significant gains for us – that is: (i) regional provision of goods and services to compensate for and overcome capacity limitations at a national level; and (ii) increasing development opportunities through integration and the creation of larger markets.

6. As you may know, the Pacific Plan, with its range of priority initiatives under the four inter-related goals of economic growth, sustainable development, good governance and security, was endorsed by Forum Leaders at their annual meeting in 2005. These activities are now being progressed – under management of the Forum Secretariat and political oversight and guidance of the Pacific Plan Action Committee, chaired by the Forum Chair. And, as the range of regional organisations is playing a key role in the implementation of the Plan, we are strengthening our cooperative abilities by developing a regional institutional framework that is appropriate for these new approaches to regionalism.

Regional Modalities

7. The Pacific Plan is based on the assumption that regional approaches are only taken if and when they add value at a country level. I make this obvious, but often misunderstood, point that regionalism is not intended to replace national policies and programmes, but to support and complement them. Providing goods and services regionally means that only the management of delivery is shifted to a regional mechanism, not the policy-making which underpins it. Protecting and enhancing national sovereignty is, in fact, a key goal of regionalism.

8. This can appear counter-intuitive, but it does seem to me a realistic view that national governments can, in fact, enhance their sovereignty by allowing regional bodies to implement some of their policy decisions (in effect, delivering a good or service that is too costly to deliver otherwise). This devolution of service provision to regional mechanisms might allow national governments to redirect scarce resources to other critical areas of development and, in doing so, more directly provide for the needs of their citizens.

9. Viewed overall, implementation of regional decisions at the national level has been, I’m sure we would all agree thusfar pretty patchy. There have been a number of reasons for that. Time prevents us from expanding on this judgement here. Suffice it to say that if strengthened regionalism is to make a positive impact on the lives of Pacific people, then we will have to find better means of matching our regional good intentions with national interest and commitment. It cannot be sufficiently stressed that the successful implementation of any form of regionalism depends on the political will and commitment of resources by countries to pursue some of their important national policies and strategies more coherently and cost-effectively through the use of regional mechanisms. If that doesn’t happen we will be wasting our time.

Economic Governance

10. Within this general framework I’ve been describing the initiatives identified for early implementation under the Plan are practical in character or intended to be so, and many are grounded in activities that are already being undertaken. They are also seen as measures to underpin the expansion of regional integration into the future. And beyond that, consideration is being given to moving progressively towards a comprehensive framework agreement among all members, one that includes free trade in goods and services, and broader-based economic cooperation, the so-called PACER plus.

11. The simple fact remains that we need to be prepared. The rest of the world will not wait for us and the steps we have taken to better control how far we liberalise and the pace in which this is done, through PICTA and PACER for example, will only take us where we want to be and bring about the anticipated benefits if we are well prepared.

Regional Trade Facilitation Programme

12. One existing regional effort through the Regional Trade Facilitation Programme (RTFP), funded under the Pacific Agreement on Closer Economic Relations (PACER), aims to improve Customs practices, and processes. The support provided is expected to assist Customs administrations in the region to better manage their trade facilitation functions, and through it also improve in terms of revenue collection and border security, which are all important components of a sound customs service.
13. The Forum Secretariat considers the delivery of the Customs component of the Programme by the OCO to be a useful example of regional collaboration to build capacity in this important area. The Secretariat will provide over a $1million Fijian Dollars, between 2007 and 2009, to the OCO for the implementation of the customs component of the Regional Trade Facilitation Programme.

14. A review of the Programme as mandated by the Forum Trade Ministers early this month, will be completed by December 2007. I hope that all Customs administrations through your national processes can contribute to comments on a draft Terms of Reference for this review study, which the Secretariat will release next week. All contributions will, add value to the ongoing work on trade facilitation in the region.

15. To keep us moving confidently forward, sustained efforts will be required to improve economic governance – an area in which, as we know, many countries face difficulties of one kind or another. Thus, an important basis of the Pacific Plan has been a more in-depth look at a package of several strategic economic management initiatives, including regional and sub-regional approaches to strengthening economic regulation, financial sector regulation and supervision, and audit services.

Regional Customs Service

16. Another such initiative concerns a proposal to establish a regional or sub-regional customs service. Many, of not all of you here, would be aware that the Forum Economic Ministers, a year ago, directed the Forum Secretariat with the assistance of the OCO to undertake a pre-feasibility study for such a regional service; again, in recognition of the potential for regional approaches to the delivery of these services and in recognition of the challenges faced by national Customs Administrations.

17. This decision also drew from the findings of a joint report by the Asian Development Bank and the Commonwealth Secretariat that found that a regional customs service, funded on a ‘user pay basis’ and covering revenue collection, and policy monitoring and enforcement, could provide FICs with a number of benefits for both FICs and donors alike. These would include: higher wage levels for customs employees leading to a reduction in corruption, and recruitment and retention of high quality professional staff; the introduction of modern technology for customs surveillance and collection; and increased government revenue through improved staff productivity.

18. At their meeting in Palau this year, Economic Ministers considered the findings of this pre-feasibility study that highlighted, amongst other things, that a range of institutional characteristics and inadequate resourcing remain critical constraints for all Customs administrations in the region. Furthermore, that these circumstances result in under-valuation and under-invoicing, corruption and facilitation payments, incorrect tariff classification of the necessary goods, transfer pricing, shortage in manpower and skilled personnel, lower than market rates of remuneration, and lack of appropriate technology.

19. Moreover, the results of a diagnostic self assessment completed by senior Forum Island Country Customs officials using the WCO Framework of Standards and Capacity Building reveal significant gaps in areas such as resourcing and systems and procedures. These results reconfirm, from a technical perspective in particular, the constraints faced by Customs administrations in undertaking their core functions.
20. The studies also noted the potential for adopting phased regional approaches through pooling of resources to help alleviate these underlying structural problems and agreed that regional options should be explored. These options could include, for example, in the short-term, building on existing regional structures and activities already underway to assist members to improve their delivery of the key Customs functions of revenue collection, trade facilitation and border security. This workshop is a good example of this approach.

21. In the medium-to-long term, regional pooling and delivery of services might provide, for example, mobile post-clearance audit teams who can audit both Customs revenue collection processes and the documentation held by importers and exporters. These are processes that understandably require a high level of technical skill and, in the majority of cases, the introduction of modern technology.

22. Keeping these possibilities in mind, Economic Ministers at their meeting in July this year, directed us to consult all members widely to develop practical options for further regional approaches including in the areas of training, model legislation, post-clearance audit and information technology. This work obviously requires inputs from and strong partnership with the Oceania Customs Organisation and we for our part certainly look forward to jointly developing those practical options for further consideration by Finance Ministers.

23. The 2007 FEMM also agreed that a full feasibility study be undertaken, to determine the viability of targeted customs services at sub-regional levels. All proposals for change engender passions of various kinds, positive and negative, and the proposals being considered here are no exception. If we are to move forward in this area, we shall need to do so with care. As they say of the work of doctors: “First, do no harm.” Our reach should not exceed our grasp. But that said, we must explore every opportunity to improve and develop what we provide to the people we are bound to serve. So I hope you will find it possible to take part in this work. It can only benefit if you do. For our part, we propose to pursue as broad a consultation process as possible.

24. The preliminary results of the feasibility study will be reported to the OCO meeting in April 2008 and the final report presented to FEMM at its meeting next year.

Conclusion

25. I thank the organisers for this opportunity, and for the privilege of officially closing this workshop.

Thank you. 

(Ends)
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