Wednesday, May 21, 2014

UK Freight Forwarding Lobby Praises New EU - China Import/Export Deal

Agreement Will Ease Trade and Customs Restrictions on Future Shipments
Shipping News Feature

EUROPE – CHINA – With over €1 billion a day in bilateral trade any variance in agreements between the two affecting the import and export cooperation is big news. Last week there was a mutual recognition agreement between the EU and China which the UK’s forwarding lobby, in the form of the British International Freight Association (BIFA) has described as a ‘landmark’. The deal means that officially recognised ‘trusted traders’ will enjoy lower costs, simplified procedures and greater predictability in their activities.

The acceptance of the credibility of traders will mean customs authorities are able to focus their resources on real risk areas thus improving supply chain security according to BIFA. EU Commissioner for Taxation and Customs, Algirdas Šemeta, was at the Joint Customs Cooperation Committee (JCCC) meeting in Beijing, for the signing of the agreement, the EU being the first trading partner to enter into such an agreement with China, having already signed similar deals with the USA (2012) and Japan (2011). He commented:

"By agreeing to mutually recognise each other's safe traders, the EU and China are taking a big step forward in our trade relationship. The agreement is fully in the spirit of trade facilitation, by making customs procedures easier, cheaper and faster for our trusted operators. It is also in the spirit of growth, by improving our business environment and accelerating trade. Our citizens will benefit from greater protection too, as customs can focus more resources on where the real risks lie. In short, everyone is a winner with this customs agreement."

Also signed off at the meeting were two other important initiatives, a new Strategic Framework for Customs Cooperation and a new EU-China Action Plan on Intellectual Property Rights (IPR) which aims to improve the clamp-down on counterfeit goods by intensifying EU-China cooperation, communication and coordination in this field, something many traders feel is an area badly in need of attention.

The Customs Cooperation agreement also focuses on another matter considered vital, that of illicit waste shipments to which the two countries have agreed to conduct a joint approach. The Strategic Framework also agrees that key areas for the pair to focus on in coming years are further trade facilitation, supply chain security and more measures for fighting counterfeit and illicit trade.

The ‘trusted traders’ referred to are, as far as the EU region is concerned, those companies recognised a having EU Authorised Economic Operator (AEO) status. This scheme has been in place since 2008 and offers simplified customs procedures to companies that prove to be safe, reliable and compliant with security standards. Certified AEOs have fewer inspections on goods and speedier customs procedures and formalities. This benefits the companies because the goods can move faster from one destination to another, lowering transport costs and facilitating more efficient trade. It also benefits EU customs administrations, who can concentrate their resources on checking high risk transactions.

There are currently around 15,000 companies approved as authorised economic operators (AEOs) in the EU, a number which is continually rising. Today's agreement with China makes the EU certified trader system the most widely accepted in the world, given that the US and Japan (as well as the EEA countries) are already in mutual recognition agreements with the EU. Such mutual recognition of certified traders prevents a proliferation of incompatible standards amongst international trade partners, and helps promote a more harmonised approach to customs practices worldwide.