An Overview of Customs Reforms to Facilitate Trade

Author(s)

Joann Peterson

This article examines the factors motivating customs reform in various countries. In particular, it describes how certain customs practices have recently evolved in response to the globalization of manufacturing, just-in-time production processes, and the growth in e-commerce. Countries have undertaken several types of customs reform, including the use of online single window systems to streamline customs paperwork and improve transparency; the adoption of “trusted trader” programs and risk assessment tools to speed customs clearance at border checkpoints; and efforts at harmonizing customs processing among regional trading partners. Guiding principles to improve customs efficiency were also agreed upon under the World Customs Organization’s Kyoto Convention and the World Trade Organization’s Trade Facilitation Agreement (TFA). This article outlines these developments and reviews work by the Organisation for Economic Co-operation and Development, the World Bank, and the World Economic Forum to benchmark countries’ progress in achieving customs reform, including implementing policy recommendations under the TFA.