- The Washington Times - Monday, September 27, 2004

After some high-profile losses at the World Trade Organization (WTO), the United States appears poised to turn the tables. U.S. officials this week registered a complaint against EU customs policies at the WTO. Trade experts believe the United States has a good chance of ultimately prevailing at the WTO on the issue.

According to the complaint, the European Union is failing to apply consistent, uniform custom rules, complicating the efforts of U.S. companies to export to the union. Companies in agriculture, textiles and high-tech claim their products are often subject to one set of criteria for entry to one EU country, and quite another to enter another EU country. The companies that have been subjected to seemingly uneven custom rules in areas like product safety and product identification have been careful to express their grievances privately to U.S. officials, not wanting to attract the ire of EU customs officials and further complicate their export efforts.

The United States has turned to the WTO, according to U.S. officials, only after having brought up the customs issue repeatedly over the course of the year to their EU counterparts. The union added 10 new members in May, and EU officials had pledged to address the lack of uniformity in customs rules in its enlargement process. But EU officials have failed to make headway in the area, said one U.S. official, and the enlargement has only made customs standards more arbitrary. Since an incoming EU president soon will be choosing a new EU trade commissioner, U.S. officials thought it would be a good idea to register the WTO complaint at this time.

The European Commission itself has acknowledged the lack of standard customs rules. In response to a critical report in 2001 on the issue by the European Court of Auditors, the commission said for the union to behave as a “real customs union” that treats all imported goods uniformly, it must be “operating on the basis of a single customs administration, which is not the case.” EU officials have therefore been aware of the problem and have tried to change it, but appear to be overwhelmed by their own bureaucracy.

Interestingly, the European Union’s insistence that developing nations clarify their own customs rules and make other reforms, known as the “Singapore issues,” caused the global trade round in Cancun last September to collapse. Granted, establishing uniform rules in the vast and diverse European Union is no easy task, but EU officials appeared hypocritical by insisting poor countries get their act together on customs when its own house was in disarray.

For those EU officials who have been trying to establish consistent customs rules, the WTO complaint could finally provide some needed impetus. If the Europeans fail to set standards, though, they could well lose the case at the WTO.

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