The European Commission has proposed for a unilateral suspension of import duties on a number of important export items from Pakistan for the next three years, as part of an aid-linked package designed to ease recovery from the flood catastrophe earlier this year. The European council of 16 September 2010 “mandated” the Commission to present in October a proposal to unilaterally suspend, for a limited period of time, duties on important imports from Pakistan. This economic assistance would come on top of the EU’s significant humanitarian and development aid.

 The proposed preferences would liberalise 75 tariff lines on imports from Pakistan, accounting for 27% of Pakistan’s current imports to the EU. A large number of the products for liberalisation include textiles (65 lines), but there are also other industrial products, such as ethanol.

 The EU said that this trade measure would result in an estimated increase of European Union imports from Pakistan to the tune of around 100 million euros.

European Trade commissioner Karel De Gucht hoped that the offer could be applied as of January 1, 2011. However, the World Trade Organisation still has to back this proposal from the European Commission.

Nevertheless, the commission has taken into account both industrial sensitivities in the EU and those of partners in the WTO. The EU industries are fearful of preferential treatment for Pakistan’s cheaper textiles; they fear that up to 120.000 jobs could be at risk in Europe.

On June 24^th the EU and Japan have signed the Decision establishing mutual recognition of AEOs. This offers enhanced trade facilitation opportunities provided by customs to certified trustworthy traders on both sides who have invested in securing their supply chains. In this way customs can also concentrate on high risks.

With this Decision, the EU and Japan establish the equivalence of their AEO programmes and provide for recognition of each other’s security certified operators. Japanese AEOs will receive benefits by European customs that are comparable to those received by EU AEOs. Japan will apply the same for EU AEOs in Japan.

This Decision on mutual recognition of AEOs is an important milestone both in trade facilitation and in securing the global supply chain.

Source: Press Release 24/06/2010 Taxaation and Customs Union DG

The EU-Japan relations in the area of customs are based on the Agreement on Cooperation and Mutal Administrative Assistance in Customs Matters (CCMAAA) that entered into force on 1 Februari 2008.

This Agreement calls for the EU and Japan to make co-operative efforts in order to develop trade facilitations actions in the field of customs in accordance with international standards.

The EU-Japan Joint Customs Cooperation Committee (JCCC) was established by the CCMAAA in order to consult the interested parties and assess the impact of mutual recognition of EU and Japanese AEO programmes.

Mutual recognition of AEO programmes and security measures both enhances end-to-end supply chain security, and facilitates trade. It consolidates internationally the approach agreed in the WCO SAFE Framework of Standards. It also addresses the concern of the business community in Europe and around the world to avoid proliferation of requirements and to standardise customs security procedures.

At the first meeting of the JCCC on 11 February 2008, the EU and Japan confirmed that such mutual recognition between the EU and Japan is a priority.

The second meeting of the JCCC on 17 September 2009, confirmed that the AEO legislations in the EU and in Japan are equivalent and are implemented in a compatible manner. Therefore the JCCC invited the European Commission and Customs and Tariff Bureau of Japan to develop a proposal which achieves this mutual recognition and provides equivalent benefits to each other’s operators.

This proposal is ready for Council Decision. It is not yet know when the mutual recognition of AEO programmes in the EU and in Japan will be effective. The decision shall be published in the Official Journal of the European Union.