Implementing trade policy through efficient import and export rules and procedures (debate) 
President
The next item is the report by Jean-Pierre Audy, on behalf of the Committee on International Trade, on implementing trade policy through efficient import and export rules and procedures.
Jean-Pierre Audy
Madam President, Commissioner, ladies and gentlemen, the customs union, which celebrates its 40th anniversary in 2008, was one of the first stages of European integration. It has led to the abolition of all import and export customs duties between EU Member States and to the adoption of a common foreign tariff. It is a vital aspect of the proper functioning of the internal market and the correct application of the Union's trade agreements. Within the customs union, the efficiency of import and export procedures is vital for the Union's competitiveness and for the protection of its citizens.
Commissioner, you recently published the customs figures for 2007, which show, and I quote, 'new and alarming tendencies'. You said that counterfeiting continues to endanger our health, our safety and our economy. In terms of consumer protection, there are numerous concerns and my report contains proposals regarding compliance with European standards, particularly in terms of health and safety.
Another example is the issue of cigarette smuggling, which was raised in Parliament last September and for which I was rapporteur for my political group. This highlighted the scale of the problem and revealed weaknesses in our Community transit system. This is why the Committee on International Trade questions the quality of our customs system and its ability to cope with the challenges inherent in trade globalisation in a context where our citizens expect the Union to protect them. This at least is what is proposed by the Treaty of Lisbon, currently undergoing ratification by the Member States, which states in Article 1(4) that in its relations with the wider world, the Union shall contribute to the protection of its citizens.
At international level, the main uncertainty is the outcome of the Doha Round negotiations conducted by the World Trade Organization, where any agreement seems a far-off prospect. We all know that if the multilateral trade negotiations break down, we will end up with bilateral competition - which as we are all aware is governed by the law of survival of the fittest - and we will need a strong and effective customs union. Even within the World Customs Organization, we are seeing less progress in terms of efficiency and global harmonisation of customs procedures, following the security concerns that emerged in the United States in the wake of 9/11.
Nevertheless, in terms of international trade, the report points out that if import and export rules and procedures are too strict, this can represent a non-tariff barrier to trade. I invite the Commission to focus particularly on small and medium-sized enterprises, which consider excessively burdensome customs rules and procedures as one of the key obstacles to international trade. The customs system must be used to facilitate trade, and the report proposes that this issue be the subject of an international agreement, to be dealt with separately from the Doha Agenda.
The report also examines the numerous issues linked with the tariff classification, value and origin - both preferential and non-preferential - of goods, in the hope that the Commission will heed the demands of the industrial sectors concerned.
Finally, I would like to stress that the ongoing lack of harmonisation seems to me to be a clear cause of the weakening of the European customs system. I understand, Commissioner, that the reform of the Customs Code is a priority for the Commission and that it is already a sufficiently complex task without being combined with institutional reform. However, I wish to open up a debate by proposing that consideration be given to the possible creation of integrated and coordinated national customs administrations, with a view to moving towards a Community administration in charge of the customs union. Indeed, the increasingly pro-harmonisation nature of the customs rules means that the role of customs is de facto becoming identical throughout the Union.
In view of the long periods of time required for developments to take place in the Community, especially those which affect the prerogatives of the Member States, I believe that the time has come to lay this issue on the table. It is an issue which is both symbolic, in that it is the crowning achievement of 40 years of increasingly advanced customs integration, and pragmatic, in that it reflects the need for a more efficient customs organisation in an increasingly complex, fast-moving world which will not wait for us.
László Kovács
Member of the Commission. - Madam President, I am pleased that you allow me to react to the report prepared by Jean-Pierre Audy and unanimously adopted by the Committee on International Trade on 6 May. I congratulate the rapporteur, who perfectly highlighted the essential contribution of customs legislation and customs services to an effective implementation of our common trade policy, and also identified the important challenges that the Union is facing in this matter.
My services are doing their best to ensure that regulations or agreements on international trade take fully into account the contribution, but also the necessary constraints, of customs concepts and procedures. They also actively defend the Community interests in international organisations dealing with customs matters, in particular the World Customs Organisation and the World Trade Organisation.
That is particularly the case concerning the rules of origin, both non-preferential and preferential. On 27 May, the Committee on International Trade was informed of the state of play of the reform of these rules for the Generalised System of Preferences. I am confident that, based on the various contributions received, the Commission will be in a position to find support from the Member States to complete this reform.
That is also true concerning the WTO negotiations on trade facilitation. The Commission is still convinced at this stage that a trade facilitation agreement should remain one of the pillars of the conclusion of the Doha Round, and should not be removed from it. Of course, the results of the negotiations on trade facilitation achieved so far should in any case not be lost.
Important steps have been taken to respond to the threats posed by counterfeited, pirated and dangerous products. New procedures have been introduced into customs legislation for the purpose of guaranteeing security and safety. The modernised Community Customs Code, published today, and the decision on the electronic customs published in January represent major milestones in the constant but dynamic contribution of customs legislation to both the protection of European citizens and the competitiveness of our economy by facilitating legitimate trade. They constitute examples of good interinstitutional cooperation.
The report also legitimately insists on the need for further harmonisation and uniformity in the implementation of the customs legislation, and for further improving the organisation and working methods of our customs administrations.
In my view, further harmonisation in implementing customs legislation can be achieved through the following initiatives: the current work on the implementation of the modernised Customs Code and the e-Customs Decision; a new programme for targeted monitoring of the correct and uniform application of customs legislation, and an assessment, in partnership with the Member States, of the needs and possibilities to approximate customs offences and penalties. The 'Customs 2013' Programme also represents an important tool in that respect.
To conclude, I would like to react to the points of the report concerning the US 100% scanning initiative. The Commission is using all possible channels to make the US authorities understand that they have chosen the wrong way to secure the supply chain. The Commission provided the US Government in April with a solid report, prepared with the contribution of Member States, which stresses the negative impact of this measure on the European ports, international trade and maritime traffic.
Zuzana Roithová
on behalf of the PPE-DE Group. - (CS) Madam President, I welcome the own-initiative report by my colleague Mr Audy, which looks at the importance of rigorously implementing customs procedures for the proper functioning of the internal market. Sadly, our market is more and more distorted by illegal imports of goods from third countries. This concerns not just smuggling, counterfeiting and evading customs duties: our market is also flooded with goods that do not meet the European safety standards, although many of them bear the compliance mark. Unfortunately, customs authorities do not have enough resources to carry out sufficient border controls. Our committee was able to witness in Antwerp how only one half of one percent of containers are checked each day. All of this undermines trust in the internal market and hurts consumers as well as European producers who cannot cope with such unfair competition on their own. Although our customs union has been around for 40 years, the Member States still do not apply customs regulations in a sufficiently uniform manner. For example, there are significant differences in the rules on tariff classification, value and origin - preferential and non-preferential - of goods. I agree with the rapporteur that the situation would benefit from greater harmonisation. The Commission should also respond to the justified objections with regard to the uniform application of the value-added criterion, such as the objections raised by the textiles industry. Overly strict and complex customs regulations impede access to international trade for small and medium-sized enterprises in particular. It is obvious that European competitiveness would benefit from simplification, modernisation and harmonisation of the rules and procedures with regard to the import and export of goods.
Francisco Assis
Madam President, Commissioner, ladies and gentlemen, I would like to begin by congratulating Mr Audy on the top quality report he has produced, both in terms of the ideas contained therein and the proposals it makes.
In actual fact, customs, as the report explicitly says, are a multifunctional tool nowadays. They play a fiscal role, their original role, but they also play an economic role and an ever increasing role in terms of protecting the security of European businesses and European consumers.
From an economic point of view, they naturally have to facilitate international trade and the European Union has every interest in seeing this happen. Yet they also have to focus on their security role, in terms of thwarting and fighting against counterfeiting and piracy, combating situations of totally unfair competition that undermine some European businesses, especially in weaker sectors and in terms of protecting the environment and public health, which are assets that our communities are increasingly coming to appreciate. This is why we need to make more headway.
The proposal outlined by the rapporteur is, in our view, a good one, as it follows the line of promoting harmonisation of the customs system. We have a community trade policy and a community customs policy, but we then have a series of national administrations that do not always work together in the most appropriate way. To ensure that the interests of European producers and consumers are protected, it would be advantageous if we could progress more quickly towards harmonisation. Progress through new practices, establishing better coordination and creating conditions for the effective harmonisation of customs administration at Community level. We shall therefore be doing European citizens a good service, both from the viewpoint of producers and consumers.
There is also an issue that I believe to be very important and that relates to small and medium-sized enterprises, and that is also addressed in the report and was tackled by the previous speaker. Our small and medium-sized enterprises are particularly vulnerable in situations where we fall prey to unfair competition and our customs system is not always ready to deal successfully with such risks. We therefore need to invest heavily in this and improve coordination with small and medium-sized enterprises themselves. They are not always experts on the rules and procedures, and are therefore at a disadvantage in terms of their ability to access international trade.
I shall end as I began, by congratulating the author of this report, that I believe has done Europe a service in this specific and very important field of the customs system.
Zbigniew Krzysztof Kuźmiuk
on behalf of the UEN Group. - (PL) Madam President, in taking the floor on behalf of the UEN Group in this debate, I wish to draw attention to three matters.
Firstly, many countries involved in international trade facilitation, even those that are WTO members, fail to observe social and environmental standards, which leads to a marked diminution in their manufacturing costs, while at the same time ruling out fair competition. Improving access to the European market for goods originating from such countries must take this aspect into account, otherwise many spheres of manufacturing in Europe will be routinely eliminated.
Secondly, the increasing openness of the European market for goods of agricultural origin from third countries in exchange for opening up these countries for exports of European industrial goods and services is in fact a realisation of Commissioner Mandelson's idea that the European Union must make concessions to other countries as part of WTO negotiations, because the European Union earns more from exports of industrial goods than it disburses on its weak defence of agriculture, but unfortunately this means a continuation of the weakening of Europe's agricultural potential.
Thirdly and finally, the European Commission must respond a lot more promptly than hitherto to breaches by third country exporters of agreements on access to the European market, and if exports originating from such countries suppress European production, the Commission must act without delay and not only after many months have elapsed.
Jean-Claude Martinez
(FR) Madam President, Commissioner, it is like customs night here tonight, with Mr Markov's report on the GSP and Mr Audy's report on non-tariff barriers, in other words these import and export rules and procedures which we call administrative protectionism, or self-righteous customs barriers. Although the WTO talks a great deal about reducing GATT tariffs, we also have subtle protectionism in the form of quotas, peak tariffs - Europe has more than 110 peak tariffs; Canada, admittedly, has 430 - and graduated import duties that prevent small countries from becoming industrialised, not to mention a list of sensitive products and a GSP which is conditional on respect for human rights and the subjective state of play of customs rules of origin, value or tariff lines. Europe has more than 5 000 tariff lines. In agriculture alone, we have 2 726 tariff lines. Japan, admittedly, has 1 890 and the USA has 1 779, so what do we do with goods when it comes to tariff lines? For example, how do we classify a mummy that arrives here from Egypt for an exhibition? We classify it as dried fish!
Mr Audy's report covers all of these problems and recognises that the US has returned to customs McCarthyism with a security/insecurity witch-hunt. The era of the pacifist approach of Pope John Paul II, with his famous 1978 homily ('Open the borders of states, political and economic systems, wide expanses of civilisations and cultures to His grace. Do not be afraid!'), is over, hence the Doha Round, which is still ongoing 10 years after it was started, whereas the Uruguay Round, if I may be so bold as to say, only took 8 years.
What is the root of this problem? The problem stems from the fact that customs duties are 2 000 years old and date back to ancient Rome, to Rome tolls. However, this is the 21st century, and as such, Commissioner, we need new customs technology. Fortunately this new customs technology has been invented by scientists and involves deductible customs duties that can be adapted according to the production cost differential, that are refundable, that can be traded on an exchange and that can be modified to help developing countries.
This, Commissioner, is what you should lay on the WTO negotiating table - this new customs technology - so that we can abolish our archaic customs system.
Marusya Ivanova Lyubcheva
(BG) Mme President, Commissioner, Colleagues, We are discussing an extremely important report today. The effective trade policy is an instrument for achieving regional or broader integration.
Imports and exports, against the backdrop of reliable rules and procedures, enable us to protect the European internal economic space. The spirit of the report is objective and critical, yet constructive. It focuses on several theses, i.e. the bilateral, regional and multilateral mutual benefit, the common regional prospects, the enhanced competitiveness of the European Union through market-based instruments to prevent the ousting of European products from the market.
Trade determines a large portion of the economic growth of some countries. In this sense, import and export rules are of paramount importance. Their implementation and control are of special significance, particularly for some new Member States like Bulgaria, where higher export levels determine the existence of trade deficit.
In this case, the access to third markets becomes crucial. The difficult entry of goods from the new countries into external markets, even when these products fully meet all requirements, generates conditions for unequal treatment. Therefore what we need is full consistency of the legislation and its implementing regulations.
The work of the national customs authorities is essential for the proper functioning of an efficient trade system, especially in the context of their enhanced mission to combat forgeries and fraud, and to protect intellectual property rights and consumers.
National costoms authorities need to collaborate in a well organised manner. It is equally important to undertake measures for proper motivation of customs authorities within the framework of the administraive solutions of each Member State, as well as for protection and support of the mission of customs authorities.
It is possible to consider the establishment of specialised centres in countries of key importance for the trade with third countries or regions respectively. This would be useful with a view to promoting the effective trade policy of the European Union.
Zuzana Roithová
(CS) Madam President, there is one issue that has not been debated so far. I want to ask the Commissioner what steps the European Union has taken to date with regard to the regulations applied by the US. What, in his opinion, are the best ways of coordinating trade procedures within the framework of transatlantic relations and, basically, can he see any possibility of achieving a good balance between security measures and the need for a more flexible economic relationship between Europe and the US? I am referring to the requirements concerning containers, which are also mentioned in the report by my colleague Mr Audy.
László Kovács
Member of the Commission. - Madam President, I would firstly like to thank you for your interest and contribution to the improvement of our legislation and practice in the customs area. I want to emphasise that the two legal documents - the modernised Customs Code and the e-Customs Decision - will make the functioning of the European Union's customs services better, faster and even cheaper. I am, of course, at the disposal of Parliament to keep you informed of the main developments in the field of customs legislation and its implementation.
On 1 April the Commission adopted a new communication on a strategy for the evolution of the Customs Union, which was supported by a resolution of the Council. The future customs initiative resulting from this communication will support customs in providing an appropriate and balanced response to the double challenge that they face - on the one hand ensuring the safety and security control of goods at the external borders and, on the other hand, facilitating trade. To this end, the initiative envisages moving from the current transaction-based approach of customs formalities and controls to a system-based approach, focusing on the internal control systems and supply chain of the economic operators. Such a new approach implies new working and control methods and a future customs risk management strategy. It will also offer a platform for working with the Member States on the most appropriate operational structures to be put in place in the future for an efficient functioning of the customs union.
Regarding Mrs Roithová's question about the US Congress's hundred percent scanning initiative: even before it was adopted by the Congress we had made a number of efforts to change the proposal, but failed to do so. The US Administration showed a great deal of understanding because they also realised that the introduction of such measures would be a unilateral step and so would be contrary to our bilateral and multilateral approach. The US Administration understood that it would certainly not increase security but, on the contrary, would generate a false sense of security, which would divert resources and attention from the real security measures.
Our concept is the future recognition of security standards, of security controls, the result of security controls and also the mutual recognition of the customs trade partnership: the CT Pact on the US side and the authorised economic operator on the EU side. I mention this because there was some reference, in connection with SMEs, to the fact that this authorised economic operator is a very good system for making life better and easier for small and medium-sized companies.
We quite recently provided information for the US Administration when, in April, we presented a report to Michael Chertoff and to the Customs and Border Protection of the US in which we explained what kind of difficulties we expect from the introduction of hundred percent scanning: the disruption of trade, the disturbances in maritime traffic and also in bilateral trade relations. Just to give you one figure: in one single year the US receives more than ten million sea containers. We send some two million containers from the EU, and this system, if introduced, would cover more than 700 ports all over the world, so you can imagine what kind of problems it will cause. We hope that, step by step, not only the US Administration but also the legislators will come to understand that it will certainly not increase security, but will create very serious problems in bilateral and multilateral trade.
Finally, as emphasised in the report, 2008 is the year of the 40th anniversary of the Customs Union. It will also be the year of a new start for the Community and the Member States in that field.
Jean-Pierre Audy
Madam President, Commissioner Kovǎcs, thank you for your answers. I would like to extend our thanks to the Commission staff that I have worked with, as well as members of the Committee on International Trade, such as Mr Musquar, and rapporteurs from the political groups, such as Mr Assis. I am also happy to see his colleague Mrs Lyubcheva here today, as we recently worked together on another matter.
You were right, Mrs Roithová, to draw attention to the problem of 100% scanning, and thank you, Commissioner, for the resolve you have shown in defending us. It is not the first time that the EU has come under attack from the United States on these issues, since we also had to defend our customs system in a case brought before the WTO Dispute Settlement Body (DSB), which we won, partly down to the efforts of your staff, Commissioner. You were right to defend us.
Mr Martinez has explained his theory on inverted tariffs to us. He also explained this to me back in December 2005, when we were in Hong Kong together. I still do not understand them, but I live in hope that one day I will be able to see how these inverted tariffs apply to mummies and dried fish.
I would like to thank all of the political groups for the support they have shown for this report. I believe that people can now see that the world, which is becoming more complicated and fast-paced, would in the past have resolved conflict by a military war. Today, we have an economic and social war, rather than a military war. Instead of deaths, we have unemployment. In any case, we no longer really know who the enemy is. It is in this climate of a worldwide economic and social war that we need to have a strong customs union and import and export mechanisms that protect - and I am talking about protection, not protectionism - our businesses, citizens and the European Union in general.
President
The debate is closed.
The vote will take place tomorrow at 11 a.m.
