PAPERLESS CUSTOMS FOCUS OF U.N. MEET
Byline: Thomas Cunningham
NEW YORK — Even as the Internet is making it easier for many companies to hook up with partners in other lands, government red tape and the uneven spread of technology remain big hurdles before the complex process of importing and exporting becomes manageable at the click of a computer key.
Shippers are eagerly awaiting the dawn of paperless Customs transactions, which they believe could speed and streamline the import process. But governments are slow to catch up with technology, and while a few nations are using paperless systems, it will likely be some time before they become common.
In fact, not all nations have yet determined that contracts entered into online are binding — a critical issue before international electronic commerce can flourish.
Those were some of the opinions voiced by a group of experts — including U.S. Deputy Secretary of Commerce Robert Mallet — at a conference at the United Nations this month entitled, “The Internet’s Impact on Global Trade.” The event was sponsored by ProNetLink, a web site offering global trade services.
“Amazing as the Internet is, it is still in its infancy,” said Glenn Zagoren, chairman of ProNetLink.
With the first elements of a global e-commerce market now in place, there is tremendous pressure on the public sector to develop online solutions for the document-loaded customs process, including clearance, pre-clearance and the collection of duties, said Stewart Hauser, president of the New York/New Jersey Foreign Freight Forwarders and Brokers Association.
ProNetLink has a listing of required documentation for over 200 countries available online that users can download and fill out, Zagoren said. However, even though the technology exists to make paperless importing a reality, almost all nations’ customs offices still require the paper forms to be filed, panelists noted.
Australia and New Zealand have implemented paperless programs, and the U.S. has a trial program with Britain, according to Hauser.
“The U.S. was projected to be 100 percent paperless [for customs transactions] by the end of 1999, and that has not happened,” said Michelle Maslow, president of Martin Strauss Air Freight Corp. in Jamaica, N.Y., who attended the meeting, adding that the Customs Service is “not setting us up on the cutting edge.”
One reason governments have been slow to move to electronic documentation is that they are afraid of losing control of a major revenue source, according to panelist Simon Nugent, chief executive of the Chambers of Commerce of Ireland.
“Why do we have all these documents in the first place?” he asked. “It’s all about making sure the tax is collected.”
In fact, as cross-border e-commerce expands, governments may find that they are not able to tax these types of transactions at all, he said.
A further potential problem for Internet trade is its newness. Many nations have not even confirmed that a contract agreed to online is binding, said panelist Kim Marchner, senior director of electronic commerce marketing for the United Parcel Service. She argued that most countries need to loosen their existing laws to give firms more flexibility to use the Internet to do business.
Although the Clinton administration generally wants the private sector to lead development of the Internet, this is one area where the U.S. government can provide assistance, said Mallet of Commerce. First it can help draft international agreements to help create a global marketplace; second, it can act as a forum for issues of data security that need to be resolved.
Mallet contended that sites like ProNetLink, which gather trade resources from hundreds of nations into one web destination, are making it much easier for firms to arrange export and import transactions.
Web sites and other technological developments can give smaller companies an advantage because they are generally faster to pick up on new ideas, according to Hauser of the Forwarders and Brokers. As long as a firm has the capacity to fill its orders, it can arrange business all over the world, he noted.
Another technology that is taking away much of the uncertainty that used to be associated with overseas shipping is the spread of wireless and wired telecommunications, he added, noting that companies can now go online and find the geographic location of a freight shipment while it’s still in transit.
Nugent, of the Irish Chambers, noted that in Europe, the creation of the euro has also increased the amount of cross-border activity as small businesses realize they are competing in a much larger market.
Mallet noted that a big barrier to a paperless global commerce is the lack of infrastructure in many less-developed countries. Adding to the pressure on developing nations, telecommunications traffic is likely to grow elevenfold in the next three years, according to Mallet. The number of Internet users is on the rise, and Internet transmissions are expected to make up 64 percent of telecommunications traffic by 2002, up from around 3 percent in 1998, Mallet said.