I spoke about customs innovation with Carlos Grau Tanner, Director General of the Global Express Association (GEA). Here are some excerpts from our talk, highlighting the key points and take-aways. I’ve edited the original transcript for clarity and conciseness. (The full Pencast is here: https://www.youtube.com/watch?v=H1oJMt82AbQ&t=224s&ab_channel=CBRA .)
Carlos is a dual Spanish and Swiss national, and a lawyer by training. He began his career in the public sector, in an international organization. After five years, he moved to the private sector and joined Swiss Air, and later the International Air Transport Association (IATA) as director of government and industry affairs. After 8 years there, he joined the Global Express Association as Director General, in their head office in Geneva, Switzerland.
Some background on the Global Express Association, and the unique challenges it's designed to address:
Carlos Grau Tanner
GEA is a trade association that represents the three leading express delivery carriers: DHL Express, FedEx Express and UPS. And it deals with global policy issues for the express delivery industry. We follow the activities of the main international organizations whose policies can affect our business, in particular the World Trade Organization, the World Customs Organization, and the International Civil Aviation Organization, because our three members operate very large fleets of aircraft. The OECD to the extent that they design policy, including on taxation of eCommerce, for instance, we also speak to the World Economic Forum on a frequent basis. We also are members of the Consultative Committee in the Universal Postal Union in Bern.
On some of the tools offered by the Global Express Association on their website:
Carlos Grau Tanner
The customs capability database is really our flagship product, the jewel in the crown. This is a publicly available open database with information on a series of key performance indicators for customs operations. As of today we have 107 countries, and we hope to bring this up to 150 countries and territories. To the best of my knowledge, there are only two databases like this around. One is from the OECD, which is also a very good tool, but it’s more of an econometric analysis tool. It's more quantitative. Ours on the contrary is more descriptive. Qualitative, if you will: it tells you what we see on the ground: How long it takes to clear a shipment? If it's this type of shipment, or that type of shipment? Does customs operate 24/7? Do they have advanced electronic information capabilities? Things like that.
Important position papers are available on the GEA website:
One that we are quite proud of is “Next Time it Happens,” which summarizes the main lessons we've learned from the pandemic. Because our industry played a key role during the pandemic. When many passenger airlines stopped operations completely, all cargo and particularly express operations kept going, despite extreme complications. That allowed supply chains that were crucial to fight the pandemic to keep going. We bore the brunt of a vaccine distribution, in a very secure, very controlled way. Based on our experience during the pandemic, we wrote this paper with a few key lessons. So that next time it happens, because unfortunately, there will be a next time, perhaps we're better prepared. All of us.
Some of the important lessons that we learned, or should have learned, in the customs realm from the pandemic:
Carlos Grau Tanner
Ghastly as this experience was, it was a proof of concept for the revised Kyoto Convention and for the Trade Facilitation Agreement, in particular. At the beginning of the pandemic in April 2020, we saw a collapse of border processes. Holds went through the roof, everywhere. But a month later, we saw the exact opposite phenomenon: suddenly they went down. Why was that? Because the pandemic forced customs and other border agencies to be extremely creative.
The pandemic proved that these international standards, that have been negotiated at the WCO and the WTO, work. So many agencies decided to do things that previously would have thought unthinkable, like accepting scanned copies of documents not requiring an original signature. Or the rollout of smart cameras remotely controlled, for inspection. Many countries put up mini-single windows for vaccines. It was considered so important, border processes had broken down so badly, that they leapfrogged several steps, and created many single windows, where you could submit all the electronic information regarding the importation of vaccines, and get your permits and your licenses back, online. And our question is, if you can do it for vaccines, why can't you do it for everything else?
Some of the differences in attitudes towards trade between customs authorities and other public entities on the one side, versus private industry, manufacturers, logistics, and other private stakeholders on the other:
Carlos Grau Tanner
We tried to embark on a constant dialogue, admitting that we come from two different perspectives: we look for speed, predictability, efficiency, and authorities say, “Yeah, but my role is to make sure that nothing unsafe, nothing prohibited gets into my territory. I have a very important fiduciary duty here to protect the population. And also, in some cases, I have revenue targets to meet.” So sure, it's a balancing act between trade facilitation, and doing my duty as customs or another border agency, and we get that. So, in this dialogue, we try to make sure first of all that things are predictable. I think there are ways of meeting the interests of the government agencies and of traders that satisfy everyone. It's not always easy. But it's absolutely doable.
On the importance of customs in the broader universe of commerce and eCommerce:
Carlos Grau Tanner
Customs is one of the key agencies that traders encounter at the border. We may have a fleet of aircraft, 1500 aircraft, 300,000 ground vehicles, electronic systems, but the one thing we don't control is border processes. So customs and the other agencies, but particularly customs, as the lead agency, has this fundamental role to facilitate foreign trade in a country. While, of course, having to play its role, as you know, that the guardian of the border that makes sure that nothing untoward is introduced in the country, that revenue is collected, and so forth. So it's a delicate balancing act. But if you get it right, it's the agency that can facilitate trade under the existing trade rules, whatever agreements the country might have. Customs will be the key element in a smooth passage of trade in and out of the country or not.
On the attitudes that people on both sides of the table, on all sides of the table, need to maintain in order to foster a positive public-private dialogue:
Carlos Grau Tanner
First of all, defining the risk, what is the concept of risk for your particular agency and say, a food and drug agency might have one specific pattern, customs might have a different one. But they all are involved in border processes. So they need to talk to each other and understand what is the minimum common denominator, how can they coordinate this different take on risk that they might have. And then have the right tools in place to carry out the analysis that will detect the shipments that pose a risk. And let those shipments that don't pose a risk go through as easily and unimpeded as possible. That way you focus your resources on controlling the shipments that you really need to control. And at the same time you facilitate trade.
The second element is trust. Let's talk, let's engage in a permanent discussion, a permanent dialogue [about] how can we improve things? Where do our points of view differ? Where can we meet – where's the common ground? What can we do to meet your interests? What can you do to help us facilitate trade?
On the biggest challenges to ensure constant and meaningful innovations in customs:
Carlos Grau Tanner
Political will, and the right mindset. And then of course, resources, inevitably. But I think it all starts with embracing the right mindset and the right policies. And sometimes this requires a lot of political will. Sometimes that's the most difficult part of the equation, rather than installing a new computer system.
Links
The full Pencast: https://www.youtube.com/watch?v=H1oJMt82AbQ&t=224s&ab_channel=CBRA
To hear more Pencasts, subscribe to the CBRA YouTube channel here: https://www.youtube.com/@cbra3452 (click the “Subscribe” button on the right side of the screen)
About GEA: https://global-express.org/index.php?id=2
GEA Customs Capability Database: https://global-express.org/index.php?id=271
Position paper: “Next Time it Happens” https://global-express.org/?id=1908
All position papers: https://global-express.org/index.php?id=12
Position papers archive search: https://global-express.org/?id=1929
Country/Territory profiles: https://global-express.org/index.php?id=422