Imagine cross-border trade as a highway where goods flow seamlessly, businesses operate efficiently, and regional economies thrive. Simplified and standardized customs procedures serve as the foundation of this highway. Recently, a significant initiative aimed at accelerating customs modernization in Central America was launched, signaling a major leap forward in trade facilitation for the region.
On September 27, 2022, the Swiss State Secretariat for Economic Affairs (SECO) and the World Customs Organization (WCO) successfully initiated a "light-touch" intervention under the Global Trade Facilitation Programme (GTFP) in Central America. The launch event saw participation from the WCO Americas Vice-Chair, the Swiss Embassy in Guatemala, and the Central American Economic Integration Secretariat (SIECA). Customs administrations from El Salvador, Honduras, Nicaragua, and Panama also actively joined the proceedings. Concurrently, WCO experts conducted a regional workshop on the Revised Kyoto Convention (RKC) from September 26 to 30.
The Revised Kyoto Convention: A Blueprint for Trade Facilitation
The Revised Kyoto Convention stands as a cornerstone instrument of the WCO, designed to harmonize and simplify customs procedures, thereby fostering international trade. By providing a clear, predictable, and efficient framework for customs administration, the RKC reduces trade costs, enhances efficiency, and improves transparency and credibility in customs operations. For developing and transitional economies, adopting and implementing the RKC is particularly crucial, as it enables these nations to integrate more effectively into global trade systems and strengthen their competitiveness in global value chains.
During the week-long workshop, participants delved into the RKC’s content, benefits, accession process, and its relationship with the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA). Technical experts from participating countries engaged in practical exercises using the RKC self-assessment toolkit to comprehensively evaluate their national compliance levels. This exercise allowed countries to identify gaps in adopting RKC standards and develop targeted improvement plans.
Key Focus Areas of the GTFP Intervention
The SECO-WCO GTFP intervention aims to help Central American countries bridge identified gaps by implementing international standards to further simplify, harmonize, and facilitate cross-border trade. Specifically, the program will focus on:
- Modernizing customs procedures: Encouraging the adoption of advanced information technologies and risk management methods to optimize processes and minimize unnecessary delays.
- Enhancing transparency: Promoting the public disclosure of customs regulations and procedures to ensure traders have timely access to information and avoid uncertainty.
- Strengthening cooperation: Facilitating information sharing and experience exchange among customs administrations to combat smuggling and fraud collectively.
- Building capacity: Providing training and technical assistance to customs officials to elevate their professional expertise and operational capabilities.
Progress and Challenges in Central America
Central America has already made notable strides in trade facilitation. Several countries have implemented single-window systems, allowing traders to submit all required documents and information through a single platform, significantly streamlining clearance processes. Others have adopted risk-based inspection techniques, directing customs resources toward high-risk shipments while reducing interference with low-risk goods.
However, challenges persist. Some nations still grapple with cumbersome and opaque customs procedures, while inadequate infrastructure and high transportation costs continue to hinder trade growth. The SECO-WCO GTFP’s support is pivotal in helping the region address these obstacles.
A Path Forward
Beyond the RKC, the WCO offers additional tools and standards covering customs valuation, rules of origin, commodity classification, and intellectual property protection. By adopting these frameworks, countries can further refine their customs operations and stimulate trade.
Looking ahead, the SECO-WCO GTFP will continue working closely with Central American nations, delivering tailored technical assistance and capacity-building initiatives to overcome challenges in RKC implementation. The program will also foster regional collaboration, enabling countries to share best practices and collectively advance trade facilitation.
Through this regional effort, Central America is poised to adapt more effectively to evolving global trade dynamics and seize new opportunities for growth. In the near future, the region may well emerge as a more open, efficient, and competitive trade hub, contributing meaningfully to global economic prosperity.