Supply Chain/Customs/Trade Facilitation
The BCTT Supply Chain, Customs and Trade Facilitation Working Group is focused on challenges to supply chains and trade facilitation. We support outcomes that promote efficiency at our borders and set the standard for global value chains. Limiting cross-border friction will boost the global competitiveness of U.S. and EU businesses while reducing costs for highly-integrated transatlantic supply chains.
Eliminating Barriers at the Border will Enhance Transatlantic Economic Competitiveness
The United States and the European Union are the world’s largest economies, each producing about $15 trillion in goods and services a year. Each is also the other’s largest trading partners, with more than $1.5 trillion in goods, services and income receipts flowing across the North Atlantic annually. Roadblocks to this trade include inefficient border administration procedures, a lack of regulatory cohesion, complex fees, documentation requirements, and insufficient benefits for trusted traders.
A recent World Economic Forum (WEF) study found that reducing global supply chain barriers could increase world GDP by nearly 5% and boost international trade by almost 15%. The study concludes that addressing these barriers could be six times more beneficial than removing tariffs. Europe could see a 4-5% increase in GDP and a 2% increase in exports, while the U.S. could see a 2-3% increase in GDP and an 11% increase in exports.
Our companies are increasingly linked to a global web of interconnected supply chains. Inputs, materials and components come from all over the world to create products with the greatest value for the consumer. As a result, 56% of all international trade today is in intermediate goods – semi-finished products and other inputs. In fact, more than one-third of U.S. and EU trade is intra-company. Limiting friction in the supply chain will reduce costs for companies in both regions.
The U.S. and EU will see real results if policymakers, along with private sector stakeholders, commit to better align border procedures and modernize customs processes. Given the massive scale of transatlantic trade, convergence through harmonization or mutual recognition would have tremendously positive impact for all business, especially for small and medium sized businesses and emerging industry sectors.
Objectives for TTIP Negotiations
- Build on a risk-based, multi-layered approach to customs processes at the border, harmonized throughout all EU member states, that facilitates legitimate trade while impeding illicit activities.
- Implement a clearance process that would separate the physical release of goods from collection of payments and enable pre-clearance of imports based on advanced data, for the clearance and a single release of goods.
- Coordinate the inspection activities of the relevant government agencies – via a “One Government at the Border” process, applied to both the United States and the EU – so that security, customs, product safety and other requirements are satisfied through a single, risk-based release mechanism.
- Commit to a single window, for the United States as well as the EU, through which importers and related parties can electronically submit all information to comply with customs and other government agencies’ information requirements.
- Eliminate redundancy in data by committing to a common set of demonstrably necessary import and export data elements for customs, security and other government information requirements. U.S. and EU data requirements and transmission should be harmonized and modernized, so the export data can be accepted as the import data from the exporting side.
- Commit to jointly develop future security, supply chain, customs and other border processes to promote convergence, improve efficiency of scarce resources and provide commercially meaningful benefits that improve facilitation and the underlying goal. This should include common definitions of “high risk,” equipment standards and screening methods as well as jointly developed program and IT requirements for new and emerging security programs.
- The current U.S.-EU Mutual Recognition Agreement for trusted trader programs should be developed into a commercially meaningful program that includes a single online application, a single validation – or revalidation – process and procedures to promote convergence.
- Simplify, streamline and align duty drawback procedures – creating a “same condition” drawback provision in the EU – and promote consultation in advance of future duty drawback modifications to achieve greater convergence.
- Raise the baseline de minimis threshold to at least $800 – covering duties, taxes and fees upon entry – that would be applicable regardless of country of origin and further commit to link the de minimis value to the consumer price index. A reasonable de minimis threshold, at which low-value shipments can cross borders without burdensome customs processing, is critical to reducing trade barriers for all businesses, especially small and medium-sized businesses.
- Create a forward-looking mechanism to cut through cross-border red tape, empowering the institution or agency to solve short and long-term issues that arise in supply chain connectivity. We recommend a “Transatlantic Business Facilitation Committee” comprised of government officials and private sector representatives to develop an action plan and meet regularly to promote progress on initiatives.
- Provide a separate and expedited customs procedure for express shipments, allowing the necessary information to be submitted and processed electronically before the shipment arrives to facilitate the immediate release of goods. Reach the highest standards for express clearance, going further than prior U.S. free trade agreements to set the standard for express delivery cooperation for the benefit of small and medium sized businesses.
- Simplify and align free trade zone approvals, processes and procedures, relying on common business systems instead of complex government regulations. Ensure laws applicable to the seizure of illicit and counterfeit products, including transshipments, are enforced without impeding legitimate trade.
- Designate a single regulatory agency to facilitate trade and help importers cut through cross-border red tape. The agency would solve short and long-term issues with supply chain connectivity.
For more information about this Subcommittee, please contact the association co-chairs: