The United States has bilateral agreements with 62 countries.20 The European Union has such individual agreements with 7 countries, and it has included provisions for mutual assistance in its RTAs. Useful benchmarks for preparing new texts—or updating existing ones—include the WCO model agreement on mutual administrative assistance, the WCO Johannesburg Convention, and recent customs union mutual administrative assistance texts. A new trend is to include agreements of mutual assistance in the text of RTAs—likely offering a better framework to guarantee effective cooperation, and also ensuring coherence in various aspects of bilateral cooperation on customs issues. Mutual recognition
Another mechanism to eliminate duplication is mutual recognition. In a customs union context this can include mutual recognition of valuation, classification, and origin rulings; of the registration and licensing of client types (traders, brokers, bonded warehouses, and so forth); of regulatory permissions, such as certificates; and of travelers, through the cross border operation of trusted traveler schemes. Mutual recognition requires high degrees of trust and standardization, with seamless communication and information exchange channels. Mutual recognition schemes do not require an RTA. For instance, the European Union and the United States are negotiating mutual recognition of authorized economic operators—and the United States already has such agreements with Canada, New Zealand, and Jordan. Japan and New Zealand also signed such an agreement in 2008. However, RTAs offer a good conduit for the negotiation of mutual recognition. In particular, customs unions make mutual recognition agreements easier by pushing countries to harmonize.
Regional integration and customs unions
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Creating an enabling legal framework
Agreed customs union designs, principles, policies, and procedures must be anchored in a legal instrument. One goal of a customs union is to ensure the uniform and consistent application of union rules. A common enabling framework promotes this goal’s attainment. Customs codes must provide a good framework for modern and efficient operations—and they must 244
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be aligned. The customs code establishes the competence of the customs authorities, provides overall coherence in customs procedures, helps make procedures more predictable and transparent, encourages cooperation with the private sector, and provides a framework for appeal procedures (de Wulf 2005). One option for customs unions is to develop a common customs code, as the European Union did in 1992, the West African Economic and Monetary Union did in 2003, and the Gulf Cooperation Council did in 2003. The process of adopting a common legal infrastructure can serve as vehicle for harmonization, simplification, and modernization in accordance with international WCO principles. Yet this process can be challenging. Mercosur adopted a customs code to deal with both substantive and procedural issues in 1994, but the code has not yet entered into force, for reasons allegedly including “overstretch” (Vervaele 2005, p. 13). In 1997 the Mercosur Customs Affairs Technical Committee was instructed to conclude an additional protocol to the customs code to address, among other issues, free zones and the CET. Other examples of regional initiatives include the Andean Community’s Community Customs Rules, adopted in 2003, and the South Africa Customs Union Agreement’s provision that the legislation of member states on customs duties shall be similar (further provision is made for the adoption of annexes to regulate customs matters). The design and status of a legal framework, and its relation to national laws, will be informed by the union’s legal regime and practice as well as by the constitutional practices of member states. The framework can take the form of a customs code— either self executing or requiring national action— and can be included in annexes or protocols to agreements. In a customs union the principles of transparency and access to information require that the legal framework should be published, easily accessed, and regularly updated. Strengthening institutions: capacity building, coordination, and enforcement
Coordinated border management demands capable regional and national agencies, while such capable agencies also promote institutional trust: agencies are willing to cooperate on cross border solutions