Protectionism Threatens Cross-Border Trade

Text by EACCNY member Salesupply, Global Express Association. Research by Global Express Association.

Cross-border commerce: Facilitation customs procedures could increase trade volumes on average by 4,4 percent.

The trend of global e-commerce growth is threatened by national governments increasingly engaging in protectionist measures in order to protect their home economies, warns the Global Express Association, the trade body representing DHL, FedEx, TNT and UPS in a new report.

The organization suggests that easing customs procedures and facilitating the cross- border movement of goods can significantly contribute to a country’s trade growth, especially as e-commerce exports to and from non- European regions are growing massively in volumes.

Online selling is becoming increasingly global and the actors involved are diversifying. Whereas governments and large multinationals were once the only actors involved in cross-border trade, today digital technologies have enabled companies of all sized to sell products, services or ideas beyond borders. However, the rise in protectionism or delays in customs reform could hinder the realisation of the e-commerce expansion, which is expected to be a key driver of economic growth, states the report by Frontier Economics commissioned by the GEA.

The GEA has set up a Customs Capability Index (CCI), showcasing 10 measures governments can implement in order to better seize the opportunities of cross- border [online] trade. These measures include:

•  Electronic customs
•  24/7 automated customs processing
•  Adapted working hours
•  Inspection at the operator facility
•  Consular trade documents not required
•  Other agency inspections do not cause delays
•  A de minimis regime
•  If de minmis- simplified procedures
•  A threshhold for informal clearance procedures
•  Third party broker not required.

According to GEA, implementing any one additional measure from the 10 measures making up the CCI increases trade on average by 4.4 percent for the country improving its customs capability. Improvements in these customs capability measures are equally beneficial to high and low income countries.

The organisation advises that policy-makers should ensure that any improvements in customs capabilities are considered in the context of enabling international express delivery services. As international express delivery is likely to play an increasing role in facilitating benefits from international e-commerce (particularly to SMEs), improvements in customs capabilities may have an even bigger impact on trade in the future.

This article is courtesy of EACCNY member Salesupply. See original here.