How does a country like Australia, with already very
high levels of trade facilitation convince importers to voluntarily
commit to higher levels of trade compliance in return for what most
see as further minor trade facilitation improvement?
The answer might be that you don't try to sell an importer
something they already have, but rather you offer the ability to
protect the status quo in a challenging and uncertain international
For decades many countries have been breaking down barriers to
trade. Globally, duty rates have generally fallen and goods are
cleared through the border more quickly than ever. While the failed
roundof negotiations suggested that the WTO had already
achieved its most significant trade outcomes, it was generally
accepted that trade conditions would not worsen as a result.
Instead of global outcomes, we have seen incremental improvements
via free trade agreements and unilateral steps taken by individual
But now the architects of modern global supply chains face the
very real prospect that life could get much harder. Trump might not
become President, but his thinking that free trade is 'stupid
trade' has resonated with much of the US. The Brexit vote shows
the political currency of rebuilding walls that have been torn down
for so long that many had forgotten they once existed. The WTO and
the OECD recently confirmed that the G20 countries have imposed
more protectionist measures since late 2015 than in any previous
period since the global credit crisis.
Throw in a Russian Government that is acting without care of
consequence from the West alongside the global reaction to cheap
Chinese steel, and the seeds for a global trade war seem to have
been planted. This creates no certainty that trade in the future
will be harder than it is now, or that Australia will engage in
similar behaviour to the most protectionist countries. However, it
does create uncertainty and risk.
In this environment, the very real benefit of the Trusted Trader
Programme might be that it offers traders the best chance to secure
their current trade environment. New protectionist measures might
be first applied to those traders outside of the Trusted Trader
Programme. Priority clearance services, currently an underwhelming
benefit of the Trusted Trader Programme (given most goods are
already cleared pre-arrival), might become highly sought after.
Supply chain managers need to ask themselves, 'What does my
world look like if countries begin to engage in protectionist
policies, with each trying to outdo the other?' We cannot know
the global trade future, but you can use the Trusted Trader
Programme as a way to limit the risks of a significant change. As
an insurance premium it is great value. Even if the worst does not
eventuate, the cost of participation in the program can still be
justified by known benefits such as duty deferral and streamlined
The Trusted Trader Programme is your best way of maintaining the
currently enjoyed trading conditions in a more isolated trade
world. Importers can expect the accreditation queues to become more
lengthy as trade conditions deteriorate and the benefits become
more sought after.
To discuss the process and the pros and cons of becoming an
accredited Trusted Trader please contact a member of our Customs
and Global Trade team.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Following the announcement by the International Atomic Energy Association that Iran has met its commitments under the Joint Comprehensive Plan of Action nuclear deal, Australia has suspended all nuclear-related sanctions against Iran.
PNG has domestic arbitration legislation, but does not provide for the enforcement of foreign arbitral awards.
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