WORLD TRADE
ORGANIZATIONG/C/W/398
18 July 2002
(02-3981)
Council for Trade in Goods Original:  English
TRADE FACILITATION : GATT ARTICLE VIII ON FEES AND
FORMALITIES CONNECTED WITH IMPORTATION AND EXPORTATION
Communication from Hong Kong, China
The following communication, dated 17 July 2002, has been received from the Permanent
Mission of Hong Kong, China.
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I. INTRODUCTION
1. The Doha Ministerial Declaration mandates, among others, that the Council on Trade in
Goods shall, in the period until the Fifth Ministeria l Conference, review and as appropriate, clarify
and improve relevant aspects of GATT Articles V, VIII and X pertaining to trade facilitation.
2. Hong Kong, China considers that elimination, minimization and simplification of formalities
and fees connected with importation and exportation, as governed by GATT Article VIII, is central to
attaining the objective of trade facilitation.  Necessary import and export formalities and fees
maintained should be administered in a neutral, transparent, consistent and predictable manner so as
to ensure a smooth and efficient functioning of the international trading system.
3. This paper proposes injection of certain  basic GATT/WTO principles, commonly found in
the WTO agreements, into specific  provisions of GATT Article VIII to enhance their operation.  It is
neither intended to be comprehensive in identi fying elements for clarification/improvement nor
exhaustive in suggesting possible GATT/WTO principles for application to the provisions identified.
Reference is made to provisions in different WTO agreements on which basic GATT/WTO principles
are being applied for the purpose of illustration.
II. FORMALITIES AND DOCUMENTATION REQUIREMENTS
 4. GATT Article VIII:1(c) stipulates that “ [t]he contracting parties also recognize the need for
minimizing the incidence and complexity of import and export formalities and for decreasing andsimplifying import and export documentation requirements ”.
5. In contrast to almost all other provisions under GATT Article VIII (except for GATT Article
VIII:1(b) which will be discussed later on), this provision entails no definite commitments from
Members despite recognition of the need to minimize import and export formalities and simplifydocumentation requirements.  And unlike some provisions under other GATT Articles and certain
provisions in other WTO agreements like the Agreement on Technical Barriers to Trade (TBT
Agreement), the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS
Agreement), and the Agreement on Import Licensing Procedures (IL Agreement), this provision does
not incorporate any basic GATT/WTO principles to govern how import and export formalities and
documentation requirements should be derived, applied, minimized and simplified.  The onlyG/C/W/398
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elaboration in paragraph 2 of the Addendum is limited, stating that “ … the production of certificates
of origin should only be required to the extent that is strictly indispensable ”.
6. Given that certain WTO agreements like the TBT Agreement, SPS Agreement, and IL
Agreement are closely related to trade facilitation, it would be useful to look at the basic GATT/WTOprinciples under these agreements and consider their applicability to import and export formalities and
documentation requirements.  The following cites a few common principles which might be
considered for incorporation into GATT Article VIII:1(c) to make it more operative.  These
suggestions are however purely illustrative in nature and without prejudice to possible future
discussions on the format and language of the clarifications and improvements required.
Least Trade Restrictiveness/Necessity
7. While regulatory in nature, import and export formalities should aim to provide a coherent
and efficient framework for the conduct of international trade.  It is therefore important to ensure that
the incidence and complexity of these formalities are minimized, adopted and maintained to the extent
necessary so as not to impede the free flow of trade.
8. The SPS Agreement requires that any sanitary or phytosanitary measure is applied only to the
extent necessary to protect human, animal or plant life or health.  The TBT agreement stipulates
similar requirement that technical regulations sha ll not be more trade-restrictive than necessary to
fulfil a legitimate objective.  Likewise, the Agreement on Import Licensing Procedures states thatnon-automatic licensing procedures shall not be more administratively burdensome than absolutely
necessary to administer the measure.
9. All these provisions aim at containing possible abuses in the adoption and application of
relevant trade measures through the introduction of a necessity test.  Such necessity test could beapplied to the derivation and enforcement of import and export procedures.  Hence, it could be
introduced to improve GATT Article VIII:1(c) by  requiring import and export formalities and
documentation requirements to be not more trade restrictive and administratively burdensome than
necessary to fulfill a legitimate objective.  Certainly, more thoughts are required to identify a list of
“legitimate objectives” which might include first and foremost prevention of deceptive practices. The
list would be subject to the agreement of Members and should take into account the specific needs of
different Members in the process of derivation.
Use of International Standards/Harmonization
10. Harmonization helps reduce compliance costs on the part of the business in gaining market
access.  It also helps simplify procedures and enhance efficiency on the part of the administration.Besides, it has been recognized that the use of common or international standards helps facilitate the
conduct of trade.
11. In this respect, the SPS Agreement requires Members to base their measures on international
standards, guidelines or recommendations where they exist.  Similarly, the TBT Agreement alsostipulates that international standards or relevant parts of them should be used for technical
regulations where they exist or their completion is imminent.
12. Adherence to recognized/standardized practices in import and export procedures in itself is
not new.  The use of a standardized format to support claims for preferential treatment under theGeneralized System of Preference is a case in point.  Other international organizations like the UN
and the WCO have also developed instruments for documentation.  The operation of GATT Article
VIII:1(c) could therefore be enhanced by requiring Members to adopt formalities and documentationG/C/W/398
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requirements with reference to international standa rds, or follow guidelines, and recommendations in
their import and export formalities and requirements where they exist and as appropriate.
Review
13. Review is a concept closely related to the principle of necessity/least trade restrictiveness.  It
also works to reduce and remove unnecessary formalities and documentation requirements in the light
of changed circumstances.  Similar requirement under GATT Article VIII:1(c) could be introduced
with reference to relevant provisions in the TBT Agreement or IL Agreement.  The TBT Agreement
requires that technical measures shall not be maintained if the circumstances or objectives giving rise
to their adoption no longer exist or if the changed circumstances or objectives can be addressed in a
less trade-restrictive manner.  The IL Agreement states that automatic import licensing may bemaintained as long as the circumstances which gave rise to its introduction prevail and as long as its
underlying administrative purposes cannot be achieved in a more appropriate way.
Simplicity/Modernization
14. Simplicity works to enhance efficiency which is key to trade facilitation.  The IL Agreement
explicitly requires that application and renewal procedures shall be as simple as possible.  This
principle of simplicity could be extended to import and export formalities and documentation
requirements by stressing the need to streamline procedures, and simplify and reduce
data/documentation requirements to the minimum.  In the light of developments in information
technology, Members could perhaps be encouraged to adopt information and data exchange through
electronic means.  This requirement however would need to take full account of the technical capacity
of individual Members.
Other Principles in Operation
15. While recognizing the need to minimize import and export procedures, GATT Article
VIII:1(c) and most of other parts of GATT Article VIII do not clearly indicate how Members should
administer or enforce their import and export formalities and documentation requirements.
16. Without doubts, non-discrimination as the fu ndamental GATT/WTO principle is inherent in
the functioning of GATT Article VIII.  Members may however consider the need for injecting intoGATT Article VIII:1(c) the more general principle of neutrality , as enshrined in the IL Agreement
which requires that rules for import licensing procedures shall be neutral in application and
administered in a fair and equitable manner.  In addition, it would be important to ensure that any
necessary import and export formalities maintained for the conduct of trade do follow the principle of
consistency  and predictability  so as to minimize uncertainty and discretionary practices which act as
serious impediments to trade.
III. FEES AND CHARGES
17. GATT Article VIII:1(b) requires that “ [t]he contracting parties recognize the need for
reducing the number and diversity of fees and charges … ”.  This provision however provides no clear
indication as to how Members would put the recogn ition into deeds.  Members may consider the
desirability of introducing basic GATT/WTO principles like necessity  and review , as elaborated in
Section II above, to add more meaning to this provision.  Such clarification/improvement may entail
reference to GATT Article VIII:1(a) which other Members may also have suggestions forimprovement.  Members may wish to put further thoughts on this.G/C/W/398
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IV. TECHNICAL ASSISTANCE AND CAPACITY BUILDING
18. In view of different economic development among Members, Hong Kong, China believes that
full consideration should be given to the technical assistance needs of Members, particularly the
developing and least developed country Members, in following these basic GATT/WTO principles in
their administrations connected with importation and exportation.  In this regard, the WTO should
explore fully with other relevant international organizations like the WCO and the UNCTAD on areas
where cooperation and coordination could be further enhanced.  Given the wide spectrum of issues
covered under GATT Articles V, VIII and X, and the resource constraints, it would be important for
Members to prioritize areas where technical assistance and capacity building is most required in order
to develop a more targetted programme.
V. CONCLUSION
As a contribution to take forward the Doha mandate, Hong Kong, China suggests that
Members should consider the possibility of enhancing the operation of GATT Article VIII:1(c) and
Article VIII:1(b) by injecting into them some ba sic GATT/WTO principles to provide better guidance
on the administration of import and export formalities and fees by Members to facilitate the trade.  It
is noted that the proposed GATT/WTO principles for incorporation could be applied to other
provisions of the three GATT Articles pertaining to trade facilitation.  This would however depend on
the clarifications and improvements that are to be applied to these other provisions to see if any form
of linkage is required.  At the present moment, Members may focus on the desirability and suitabilityof operationalizing the two specific provisions under GATT Article VIII through the suggested
approach by Hong Kong, China.  The exact format and language of the clarifications and
improvements required are matters for future discussions.
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