Blog: The role of customs in the 21st Century
Happy Australia Day!
Today (26 January) is Australia Day! Now, this blog could be about UK trade policy, plans for upcoming negotiations with our Antipodean friends, and the opportunities of being more closely associated with the CPTPP (a trade agreement covering an assortment of Pacific rim economies).
But today has another significance to the shipping industry: it is International Customs Day. The day was conceived in 1983 with the purpose of considering how customs keeps countries safe, understand what the world would be like if trade was not properly managed, and to share best practice amongst countries on how to improve the processing of goods across borders.
The theme this year is “Customs bolstering Recovery, Renewal and Resilience”. Usually the purpose of customs is seen as fairly business negative, necessary functions of state in preventing harm, collecting revenue, and understanding the effectiveness of domestic policies on external trade flows. Customs are bureaucratic, burdensome and a bane on trade life. But what if they could be perceived positively?
Often, research conducted on the benefits of customs begin with the wrong premise: looking at customs as necessary cost, and how making them more efficient can reduce that cost. For example, a World Custom Organisation paper in 2019 identified that by implementing modern and efficient custom processes as described in the Revised Kyoto Convention, import time, import cost and export time could all be reduced by 60-70%.
Understanding how trade is managed, or more interestingly, how it is distributed at the border, is the first crucial step. The new UK Border Operating Model provides a useful guide to what may be possible. The range of systems, flexible declarations points and locations creates new data sets which can be used to analyse how trade is conducted. Granted, this has caused supply chain challenges in the first few weeks of the new system’s implementation. But this is because there was insufficient preparation time allowed for business, not the design itself.
What industry has given up in frictionless trade with the EU, the UK Government must make up with the positive use of these new data sets in developing policies that improve infrastructure and the distribution of economic activity. The Government is pursuing a range of new strategies that will benefit from this new data such as “Future Borders” and “Freeports”. It is important that the data is not wasted.
Returning to the themes of the day, seeing customs as a positive force for trade is possible. But it requires a more collective approach to its design. To improve the national network of shipping logistics, authorities need more data from industry, and industry needs practical support and realistic policy delivery times. In Aboriginal culture, there is a phrase: “The more you know, the less you need.” By adopting this approach, maybe customs can bolster maritime trade.