For some countries it is a given that private sector actors are an equal partner in shaping public policy. However, many countries around the world still struggle to include the business community in their policymaking process. By strengthening public-private dialogue, some countries have made progress toward bringing the private sector to the table to create more responsive institutions and increase accountability.
Colombia is one of these places.
Until the last few years, trade policy reform was usually an exclusive domain of Colombian Customs and Ministry of Trade. If there were a policy change, Customs would make the decision, often without prior consultation with the private sector or without taking private sector needs into account.
This dynamic has started to change. We are seeing results in a few particular sectors, including automotive. An ongoing CIPE project aims to establish and operationalize a Center for Excellence in trade facilitation at Colombia Customs. It’s proving to be a key catalyst for meaningful public and private sector dialogue.
The “Center” is delivering a new approach to how customs does business. Based on data provided by the private sector, it makes a decision about how a particular good, in this case automotive parts, will be treated once the good arrives at a Colombian port of entry. This creates an unprecedented level of transparency and predictability that is essential to the sector and reduces the discretionality of front-line customs officers.
In addition, the “Center” helps increase trust among the stakeholders and enables them to work together on identifying major trade facilitation challenges and policy changes. Colombia is the only country (outside the United States and Japan) that is attempting to establish and operationalize a Center for Excellence for Trade. The automotive sector is a pilot for its implementation.
The change is happening in two levels: in particular sectors (such as automotive) and at the national level. First, our project has introduced a Project Working Group that is comprised of five associations representing the automotive sector and five representatives of the government, including Customs and the Ministry of Trade. This key project implementation mechanism has secured private sector participation during the entire process of decision-making in the project as an equal partner. A new regulation that establishes the “Center” and defines its scope of work is a product of hard work, close consultations and strengthened trust between stakeholders in this project working group. This was highly unlikely just a few years ago in Colombia.
At the national level, public private consultations have been institutionalized through National Trade Facilitation Committee (NTFC). The Committee was established a few years ago, even before Colombia ratified the Trade Facilitation Agreement (TFA). Private sector associations and representatives of the government continuously discuss and decide about major trade facilitation issues in the country. CIPE, through Global Alliance for Trade Facilitation (GATF), sits as an honorary permanent member of the NTFC, without the right to vote on issues.
In another example of public-private sector collaboration, during last June and July we organized and conducted seven virtual workshops with representatives of Colombian customs, private sector companies in the automotive sector, and representatives of the main trade associations in Colombia (ANDI, ANDEMOS, ASOPARTES, ACOLFA, ANALDEX). A total of 186 organizations participated.
The automotive sector in Colombia is comprised of importers, assemblers and national auto part producers, thus representing the entire chain of production and distribution in Colombia and the region. Worldwide companies such Fiat Chrysler Group and Kenworth had the opportunity to explain in detail the challenges they face during the import process. Recognized assemblers in the country such as SOFASA or GM and national auto part SMEs pointed out main issues they face out during the special customs regimes for assembly operations and exports to the Latin-American region.
During the sessions, Customs explained the scope and role of the “Center” and how it will serve as an official channel for government-private sector dialogue. They mentioned that the “Center” would help address and simplify customs operations and harmonize the decision-making process at the national level by providing technical knowledge on the most frequent customs issues at the border such as classification, origin and valuation.
Continuous dialogue has enabled both sides, public and private, to understand and get specialized knowledge of the sector and align with key industry business practices. This constructive dialogue has provided key recommendations that are part of the DNA of the Center for Excellence.
We expect that public private dialogue will continue to strengthen and shape public policy in Colombia. We will continue to support public-private consultations and bring the private sector to the table for any policy or regulatory changes. Although in early stages, we believe that this relationship will be one of the great legacies of CIPE/GATF projects in Colombia.