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Algirdas Šemeta

EU Commissioner for Taxation and Customs Union, Audit and Anti-Fraud

"EU-China – Modern Customs Building Bridges to Facilitate Legitimate Trade and Protecting Citizens"

International Customs Conference

China (Shanghai), 1 September 2010

Mr Vice Minister,

Distinguished guests,

Ladies and gentlemen,

I am delighted to be at the World Expo in Shanghai today to open this International Customs Conference.

I can hardly think of a better place to hold this event. Shanghai is the main economic, trading and financial centre of China. It boasts the world's busiest seaport by cargo traffic; it is a major aviation hub in Asia and connects the vast and thriving Yangtze River Delta with the rest of the world. I have been struck by the extraordinary dynamism and constant development that is so evident in this city.

The World Expo is about learning and influencing one another; with ideas about science, art and design, architecture and urban development, food and rural development, education and social development, about trade, about all aspects of human life. It is a unique opportunity to focus world attention on China’s extraordinary achievements and immense potential in improving living standards, and its will and capacity to address the economic, social and environmental challenges in a harmonious way. Conversely, it is a unique opportunity for the rest of the world to try to understand contemporary China much better. The Expo is, par excellence, the place we can build such bridges.

The EU and China are strategic partners, both committed to promoting reform and openness thereby increasing trust and confidence in one another, especially in economic and trade cooperation. We have become economically interdependent and the threats and challenges we face transcend borders and continental boundaries. The future of international trade lies in good relationships: building bridges today is vital for keeping tomorrow's trade flowing and generating new sources of wealth. It is also vital for promoting mutual understanding, which is at the core of lasting peace and stability, regionally and worldwide.

Coming to the specific topic of this conference, about EU-China customs cooperation, I wish to focus, briefly, on three main points:

Firstly, the importance of EU-China customs cooperation.

The days when customs' primary role was to collect import duties are long gone. Modern customs has a much widened role. It must ensure the smooth flow of legitimate trade and, at the same time, protect citizens from risks posed by international trade: fraud, terrorism, organised crime, and IPR infringements. By stopping the illegal traffic of goods, customs contributes to the healthy functioning of the global economy and to citizens’ welfare.

Carrying out this mission would be impossible without close international cooperation between customs administrations; national policies alone are ineffective unless they are supported by enhanced international cooperation to promote coherence and economise on administrative resources.

Our efforts in the European Union to develop cooperation with our trading partners should be seen in this context, both bilaterally and multilaterally, for instance in the World Customs Organisation.

If only by sheer volumes, China and the EU have a major stake in ensuring uninterrupted flows of legitimate merchandise across borders. China is our second largest trading partner and first source of import. The EU is China's number one trading partner and largest export market, with almost 20% of Chinese export destined for Europe. In 2009, EU-China trade totalled about 300 billion Euros; latest data show a 20% increase in EU-China trade in the first quarter of 2010 compared to the same period in 2009. As world players we also have world responsibilities. This is as true for China as it is for the EU.

Increased trade brings serious challenges: China remains the main source of counterfeited and pirated goods in the world; in 2009, 64% of goods detained in Europe for IPR violations came from China. In addition to the grave consequences for innovation and legitimate jobs, illegitimate trade threatens the safety and health of citizens; it fosters protectionism, because it undermines trust in trade and in the rule of law. In this context specific mention should be made to the tobacco sector. China is the main source of counterfeit cigarettes in the EU, where the illicit tobacco market results in tax and duty losses of 10 billion Euros annually and impacts significantly on legitimate business interests.

Fighting illegitimate trade more effectively, while promoting legitimate trade is in our mutual interest. The benefits of trade facilitation will depend crucially on how effectively we combat illicit trade. It is against this background that EU-China customs cooperation is particularly important.

My second point is that the EU is prepared to strengthen customs cooperation with China.

The recognition of increasing interaction and mutual interest is the driving force of the cooperation we established in 2005, when we signed our bilateral EU-China Customs Cooperation Agreement, and which we have developed since.

Starting with mutual administrative assistance and the launching, in 2006, of a pilot project to test the World Customs Organisation’s Safe Framework of Standards, we further extended our cooperation in 2009 with the signature of the Action Plan on IPR enforcement. In this way we have gradually developed a dense network of contacts and activities. EU experts from the European Commission and EU Member States, and Chinese experts now hold regular contacts and work closely to implement the mutual commitments we have entered into under each of those activities.

My political message today is unequivocal: in the EU we are prepared to continue and further enhance customs cooperation with China. We greatly value the openness and interest of China Customs in organising joint activities. We expect that together we can produce practical results: consumers, employees and businesses must be reassured that the expansion of trade is indeed good for jobs and for productivity growth, and that consumer safety, investments in innovation and jobs are not compromised by illegitimate trade.

For this we have developed tools and activities – principally the IPR Action Plan and the Smart and Secure Trade Lanes Pilot Project. A lot of preparatory work has been put into these exercises. We now need to make the best use of these tools to deliver practical results for security, safety and IPR enforcement.

With this in mind we are strongly interested in establishing a more ambitious and dynamic cooperation strategy, one where progress in supply chain security, IPR enforcement and in the fight against fraud proceeds in a balanced way through mutual recognition of controls, mutual exchange of information and mutual administrative assistance in support of the facilitation of legitimate trade. We understand Minister Sheng's recent initiative, the so-called 3M initiative, in this way and we welcome it as a way to provide a coherent strategic framework for our future joint work. Unfortunately, Minister Sheng could not be present here today, but given his strong personal interest in furthering this initiative, I hope to have an opportunity in the near future to explore the prospects further with him.

This brings me to my third and last point, our expectations from this Conference.

The future development of EU-China customs cooperation will significantly influence the future of supply chain management world-wide. We have shared interests and a great responsibility in developing this cooperation and shaping the future of customs.

I expect this Conference to contribute to this important work. More specifically, the discussions today and tomorrow should generate ideas and proposals regarding the role of customs in the face of the modern challenges and the future of EU-China customs cooperation. In particular, the discussions should debate the essential components of a balanced EU-China customs cooperation strategy and ways to implement them effectively. The issue of forging strong partnerships between business and customs is a crucial element in this debate.

There are many specific questions to be answered: How should customs evolve to successfully manage the international supply chain? How can customs, in cooperation with other stakeholders, protect the supply chain from terrorism and organised crime? What can European and Chinese customs do to eradicate the trade in goods that violate intellectual property rights and to stop fraudulent activities?

Having looked at the list of participants, I am convinced that these questions can be properly answered. In keeping with the ethos of this World Expo, the speakers, panellists and the audience at this Conference are truly international and have a wide-range of backgrounds; policy makers, public sector employees, business representatives and representatives from trade associations.

This is a guarantee for open and result-oriented expert discussions, where we can learn from each other's experience to achieve results that make a real difference for traders and citizens alike. Let me highlight the importance of the active participation of business in the conference; their contribution is vital in the process of strengthening EU-China customs cooperation.

Ladies and gentlemen,

At the end of this week, the 5th meeting of the EU-China Joint Customs Cooperation Committee will take place, to discuss our joint work under the bilateral Customs Agreement. I believe that your discussions, views and ideas can provide an important feedback to the work of the Joint Customs Cooperation Committee.

Finally, let me congratulate China for the excellent organisation of the World Expo. This event is as impressive as the economic achievements China made in the past years. I am looking forward to visiting at least a small part of the EXPO and I hope you all will have the opportunity to do the same in the coming days.

Preparing this conference at this venue, in the EU-Belgian pavillion, has required a lot of effort, and I am grateful to all those who made it possible. I wish you all a productive and successful conference.

Thank you for your attention.

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