As 2022 draws to a close, we caught up with the CEO of Customs Manager, Mr Arne Mielken to review the most significant customs & global issues that are on the horizon for 2023.
Question: What, in your estimation, will be the key focus for the EU when it comes to customs and global trade in 2023?
Arne Mielken: There are three important goals for the EU. The first is the revision of the Union Customs Code (UCC). We anxiously anticipate the release of the impact assessment that will serve as the foundation for the proposed legislative amendments. This must be completed by early next year. Following is the IT agenda. Specifically, we are discussing the MASP, ICS2 Phase 2, and the EU Single Window Environment for Customs. Lastly, I believe it is necessary to handle the issue in Northern Ireland, which might consume the time of EU customs inspectors. We looked at all of these issues and more during out EU Customs Update on 9 December 2022, where we had a chance to deep dive into these matters from a customs and global trade perspective. Thank you to all who joined. It was a great event and we will be publishing extracts on our YouTube Channel. Have you signed up for it yet? Click here to check it out.
Question: With the 2nd Brexit anniversary around the corner, what will the UK do in terms of the Border, Customs and Trade in 2023?
Arne Mielken: For the United Kingdom, the European Union (EU) remains the most important commercial zone for the United Kingdom due to several factors, including its closeness and the high demand for the exchange of products and services. The recognized difficulties that companies have faced since Brexit will persist throughout the course of the next year – as we enter year 3 of Brexit. As the United Kingdom's domestic regulation becomes increasingly autonomous from EU law, frictions may not be avoidable. 2023 will be very significant for the UK’s customs regime. We are expecting a new Target Operating Model to be published imminently as well as concrete ideas for the new veterinary control system based on a sophisticated trusted trader scheme. Of course, the government of the United Kingdom will be required to address the Northern Ireland Protocol. The UK will have to engage in regular and robust conversations regarding the updating of the EU–UK Trade and Cooperation Agreement (TCA). We hope that these talks are conducted in an amicable fashion, and aim to ensure that the agreement is beneficial to businesses and work closely with the EU to ensure that the various technological solutions being developed for international trade, such as the Single Trade Window (STW) and the Ecosystem of Trade (EoT), are compatible with each other. We will discuss all of these matters at our UK Customs Update 2023, a four-hour training session where import and export managers and their advisors can learn about all of these issues in much more detail. To book your ticket, visit www.customsmanager.org
Question: What about the United States, what will CBP do in 2023?
Arne Mielken: Turning to the United States, CBP is progressively advancing its 2021–2026 Strategy and its five Enduring Mission Priorities: Combating Terrorism, Combating Transnational Crime, Securing the Border, Facilitating Legal Trade and Revenue Protection, and Facilitating Legal Travel. Importantly, these goals are the key drivers of CBP's 12 Strategic Objectives that determine what CBP will focus on. I should just highlight three here: PBP will also prioritize the avoidance of forced labour and the modernization of the Automated Commercial Environment (ACE). Finally, you may recall that in June 2022, CBP launched its Green Commerce Strategy to stimulate green trade, increase environmental enforcement, advance green innovation, and improve climate resilience and resource efficiency. The Strategy proactively addresses climate change's detrimental effects on the agency's trade mission while enhancing enforcement against environmental trade crimes such illicit logging, wildlife trafficking, illegal, unreported, and unregulated fishing, and unlawful mining. It sets agency objectives for ecologically friendly trade policies, initiatives, and infrastructure. CBP hopes the Green Trade Strategy will inspire other customs administrations to adopt greener trade standards and bring government, businesses, and the public together to create a more sustainable future.
Question: What does 2023 hold for Free Trade Agreements across these three regions?
Arne Mielken: In terms of free-trade agreements (FTAs), 2022 was a crucial year for the EU and the UK, but less so for the US. On June 30, 2022, the European Union completed talks with New Zealand for a broad and ambitious trade deal. On December 9, 2022, the EU and Chile completed discussions to modernize the current EU-Chile Association Agreement. The EU also concluded a digital accord with Singapore. The EU intends to advance discussions for a broad and ambitious trade deal with Australia, India, the Philippines, and Indonesia in 2023. The European Union and Mexico have struck a "in principle agreement" on the key trade provisions of a new EU-Mexico association agreement. The new pact supersedes a previous agreement signed between the EU and Mexico in 2000, which may possibly be completed in 2023. . Priorities for the United Kingdom in 2022 included advancing talks with India, Canada, Mexico, Israel, and the Gulf Cooperation Council (GCC). We are also negotiating to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Under UK Secretary of State for International Trade Badenoch, 2023 would attempt a fresh push to increase international trade flows. This might include memorandums of understanding with certain US states, as well as additional agreements like as an MRA and the extension of the SMA with Switzerland. We might expect the current administration to investigate further options for FTAs in 2023.
Question: In your opinion, what are the most pressing issues affecting the customs and global trade in the world today?
Arne Mielken: Please remember the precarious situation we find ourselves in when it comes to global trade. Just a couple of years ago, we were openly questioning if the WTO is still fit for purpose. Trade Wars were back on the table. The global leadership of the WTO was fragmented more than ever before. 2022 has been a trying year with high costs of living and record oil prices due to Russia’s war on Ukraine. In 2023, world commerce remains fragile. More than ever before, in 2023, the WTO and WCO should devote time and effort to continuing to establish international standards and frameworks on a wide range of issues, including customs single windows and digital standards, among others.
Maintaining the active engagement of member nations within bigger global trade organizations remains a significant challenge. This is why the success of the WTO’S MC12 is so important. This is why WTO reform is so important. But while participants agreed that reforming the WTO would be advantageous, there is not yet a universal consensus over the nature of the proposed reform. The expansion of bilateral free trade agreements (FTAs) and regional trade agreements (RTAs), such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), has resulted in a rise in business outside the WTO framework – which could be seen as competition – diminishing the importance of the WTO?
In what ways will Customs Manager Ltd. aid businesses in the next year in addressing these challenges?
Arne Mielken: When the going gets tough, you need a competent partner by your side, a Customs Manager! We want to be that trusted partner for SMEs and larger businesses alike. At Customs Manager Ltd, we use our “one-stop-shop” approach of support that has proven very popular: Bespoke consultancy, leading industry education and training programme, market-leading trade intelligence and customs filing into and out of the UK. These four offerings provide our clients will around the clock services to make the Border as seamless as possible and offer efficiencies and the highest levels of compliance with local, national and regional laws. Moreover, as a member of the EU’S TCG and the UK’s JCCC, I am particularly interested in supporting the EU’s DG TAXUD and the UK’s HMRC in testing and validating the new electronic systems and ideas that they have come forward. Our clients have expressed interest in working with the EU and UK governments to trail their new systems and we can facilitate this. For example, the EU will soon roll out its EU Single Window, so our companies can help test this. In the UK, we are expecting the Target Operating Model (TOM) to come out imminently, again our clients are eager to support the UK government in this endeavour.
It is on the education and training side, that we will make a big difference in 2023. For the new year, we are pleased to offer an attractive alternative to the traditional education and training providers, not only focused on knowledge transmission but building real competencies. Our new Diploma for Customs Competencies and our more than 20+ courses are all geared to support individual customs managers, and import, export and logistics professionals no matter the size and sector of their business. It is fantastic to see that brokers, freight agents, lawyers and advisors also take up this offer of holistic education of customs competencies or choose individual, expert let single-subject courses to build their skills. This is something we want to pursue in the European Union, in the United Kingdom, across the United States and globally.
Question: How do you feel about the future of customs in the EU and the UK as 2023 approaches?
Arne Mielken: Both the EU and the UK emphasise e-customs – the focus on electronic customs and trade facilitation is cause for optimism, but only if businesses and industries see real benefits and are engaged. Several initiatives, such as the move to genuine electronic customs declarations, like CDS in the UK or DELTA IE in France or AIS and AES in Ireland, as well as NCTS – Release 5 and 6 on Transit, might help us do business more efficiently – the latter also benefitting the UK and other Common Transit Convention countries.
Due to the resilience of our clients, I have reason to be optimistic about the future; yet, we must not lose sight of the reality that there will be formidable headwinds and obstacles. 2023 can be a key year for making customs clearance easier, however, only if the opportunities in electronic customs are leveraged.
Thank you very much for your time