9.3. Measures affecting trade in goods

The digital transformation has led to significant reductions in the costs of engaging in international trade, changing both how and what is traded (Lopez-Gonzalez and Jouanjean, 2017). Along with the rise of digitally enabled or delivered services trade, digitalisation is also driving increased trade in physical goods. However, measuring trade in digitally enabled, digitally ordered, and potentially, with the emergence of 3D printing, digitally delivered goods, is challenging. Page 9.6 outlines related efforts in this regard.

With growing digitalisation, the measures affecting trade in goods are changing (Lopez-Gonzalez and Ferencz, 2018). “Smart” goods, such as smart speakers, e-readers and Internet of Things devices, combine characteristics of goods and services and require Internet access. They are affected by measures such as tariffs or at-the-border costs, but also by issues traditionally associated with trade in services and access to digital networks.

Effectively applied tariffs provide an illustration of direct market access barriers for ICT goods (notwithstanding other technical measures). Across OECD countries, the average effectively applied tariff on ICT goods was 2.07% in 2005, falling to 0.73% in 2017. Applied tariffs in OECD partner countries, though also falling, remain high. They were were almost 12%, in Argentina and Brazil in 2017, and around 6% – nearly ten times the OECD average – in China and India.

E-commerce is leading to increased international trade in parcels, which makes de minimis thresholds increasingly important, especially for SMEs and individuals buying online. It also raises issues for the efficiency and management of customs procedures. De minimis regimes vary widely. Australia and the United States have the highest thresholds at around USD 800. In contrast, China and Switzerland set levels below USD 10, while in EU countries, India and Colombia they are closer to USD 200 (see Lopez-Gonzalez and Ferencz, 2018 for a discussion).

The delivery of goods ordered online remains subject to physical connectivity constraints. As trade costs can represent a sizeable share of the value of small consignments, how fast and at what cost a parcel can clear a border can considerably impact the engagement of individuals and smaller firms in digital trade. Simplification and streamlining of border processes and controls, as well as automation of procedures, can help speed the movement of goods through customs. Other areas such as the transparency of trade-related information and predictability of border procedures also support smooth trade. Technology itself, in the form of automation and dematerialisation of border processes, can also assist in faciltitating this expanded trade. The OECD Trade Facilitation Indicators (TFIs) capture elements of all such measures. The performance of the OECD and emerging economies in 2017 in areas such as transparency and predictability, streamlining procedures or automating border processes reflects significant implementation efforts. Across the board, the most challenging areas relate to co-ordinated border management.

Did You Know?

Tariffs on ICT goods in China and India are 8 times higher than those applied in OECD countries, and 16 times higher in Argentina and Brazil.

Definitions

Effectively-applied tariffs are calculated as the lower of the average “most favoured nation” tariff (applied under general WTO rules) and the average preferential tariff (applied under preferential trade agreements).

Tariffs on ICT goods are taxes or duties paid on imports of those products primarily produced by the ICT manufacturing industry.

De minimis regimes allow goods not exceeding a certain threshold value to be exempted from import duties and taxes as well as from certain declaration procedures.

Trade Facilitation Indicators (TFIs) cover the full spectrum of border procedures and measure the extent to which countries have introduced and implemented trade facilitation measures in absolute terms, as well as their performance relative to others. Each TFI indicator is composed of several specific, precise and fact-based variables related to existing trade-related policies and regulations and their implementation in practice. Each component can take a maximum value of 2, indicating maximum performance in that area. For details on each component, see (OECD, 2018), Table 1.1.

Measurability

The Global Express Association, an express delivery carriers’ organisation, regularly compiles information on de minimis regimes available from publicly available sources (e.g. customs agency websites).

The Trade Analysis Information System (TRAINS) database provides data on tariff barriers to trade.

The OECD TFIs cover 163 countries based on a detailed questionnaire collecting factual information that is geographically comparable and consistent over time. Data come from three types of sources: (a) publicly available information included in the websites of relevant border agencies, official publications such as Customs Codes, annual reports or public databases; (b) direct submissions from countries; and (c) factual information from the private sector –, in particular express industry associations and companies operating worldwide. Discrepancies are investigated by the OECD and datasheets sent to countries for validation. For full details, see: https://oe.cd/tfi.

Effectively applied tariffs on ICT goods, 2017
Simple average as a percentage of import value
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Source: OECD, based on UNCTAD, Trade Analysis Information System (TRAINS), December 2018. See 1.

1. For Thailand, data refer to 2015 instead of 2017.

 StatLink https://doi.org/10.1787/888933931504

De minimis value thresholds for customs duties, 2018
Applying to express shipments
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Source: OECD, based on Global Express Association, December 2018. See 1.

1. From 1 July 2018, Australia has required online platforms, retailers and re-delivers, who ship goods costing AUD 1,000 or less from offshore to Australian consumers, to charge and remit GST on those sales to the Australian Taxation Office. This charge occurs at the point of sale and does not require the goods to be stopped at the border and there is no border charges or customs duty.

For Brazil, data refer to de minimis for shipments from the United States.

For Mexico, the de minimis threshold is 300 instead of 50 for postal shipments.

For New Zealand, data refer to postal shipments only.

For the Russian Federation, data only include personal shipments and samples, except medicine, herb medicine, wildlife-related products, quarantined items such as agricultural, livestock and marine products, nutritional supplement, food, alcoholic beverages, tobacco, cosmetics (only applied to functional cosmetics, placenta-containing cosmetics, cosmetics containing steroids and hazardous cosmetics) and others.

Figures 2016: https://global-express.org/assets/files/Customs%20Committee/de-minimis/GEA-overview-on-de-minimis_April-2016.pdf

Figures 2018: https://global-express.org/assets/files/Customs%20Committee/de-minimis/GEA%20overview%20on%20de%20minimis_9%20March%202018.pdf

 StatLink https://doi.org/10.1787/888933931523

Trade Facilitation Indicators, 2017
2 = maximum performance that can be achieved in each area (overall potential maximum = 12)
picture

Source: OECD, Trade Facilitation Indicators Database, https://oe.cd/tfi, September 2018. See 1. StatLink contains more data.

1. The area “Transparency and predictability” groups indicators in terms of information availability, involvement of the trade community, advance rulings, appeal procedures, and fees and charges. The area “Border agency co-operation” groups indicators in terms of domestic and cross-border agency co-operation.

 StatLink https://doi.org/10.1787/888933931542

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