Taiwan and the United States recently signed an Authorized Economic Operator (AEO) and Customs-Trade Partnership Against Terrorism (C-TPAT) mutual recognition agreement (MRA) under which Customs on each side will recognize Global Security Verification (GSV) granted by the other side. In the future, goods shipped to the U.S. by Taiwanese businesses will enjoy minimum inspection and fastest customs clearance treatment.
According to the Ministry of Finance (MOF), once the MRA takes effect the Customs authorities on each side will recognize the results of AEO verification granted by the other side and afford participating businesses with preferential customs clearance procedures. In Taiwan, 161 enterprises have already acquired AEO status; the goods they export to the U.S. can enjoy a reduced inspection ratio, facilitating logistics management and providing just-in-time and zero-inventory advantages.
Goods exported to Taiwan by American AEOs will enjoy the same preferential treatment. The MOF points out that minimum inspection ratio and quickest customs clearance will cut more than four hours of clearance time for each container and save inspection fees in the amount of NT$8,000 (general inspection fee) to NT$20,000 (container clearance charge).
Taiwan is America’s 10th-largest trading partner and America is Taiwan’s third-largest trading partner, with total trade between the two amounting to US$62.1 billion in 2011. Taiwan’s AEOs accounted for US$15.7 billion of that amount—about 25% of the total. The MRA signed recently by the Customs authorities of the two countries carries extraordinary importance for the strengthening of supply-chain security and efficiency as well as for the further development of bilateral trade.
The Taiwan-U.S. AEO MRA creates a precedent for the signing of such agreements by Taiwan, and paves the way for more agreements in the future. The MOF is actively negotiating similar MRAs with other countries, and hopefully more happy results will be realized this year.