Distinguished delegates, ladies and gentlemen,
It is a pleasure to address you today to celebrate the 30th anniversary of the Customs Valuation Agreement, as well as the Committee on Customs Valuation overseeing the Agreement’s implementation.
While 2025 marks the 30th anniversary of the Agreement, its origins trace back to the GATT era, when it was called the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994.
Its long history demonstrates the importance of customs valuation, and its particular relevance in today’s environment when there is so much focus on tariffs. Customs valuation is a threshold question that importers must address because it can dramatically change the effect of tariffs. How customs value goods can be just as important as the tariff rate applicable to that good because the customs value and the tariff rate together determine the amount of duty the importer must pay. A low tariff with high customs valuation can hurt as much as a high tariff.
This interrelationship shows that the WTO rules are more than about tariff levels – our rules benefit all Members by establishing how value is measured for purposes of applying tariffs. Inconsistent valuation methods created uncertainty and unpredictability for traders. Without these rules, Members cannot predict how much they would collect in tariffs and how much their exporters would pay abroad.
Just consider what happened before the Agreement was negotiated. Article VII of the GATT, which first regulated customs valuation in 1947, set out broad principles for national customs valuation systems but allowed countries considerable flexibility to implement their own national systems. In practice, this flexibility led to wide variation and a lack of transparency across customs administrations.
By the time of the Tokyo Round, these challenges had become so significant that customs valuation practices were increasingly considered to be non-tariff barriers to trade, prompting the international community to seek stronger, more harmonized rules.
The Tokyo Round resulted in the conclusion in 1979 of the GATT Valuation Code, which provided for the first time a detailed regulation of customs valuation aimed at establishing a fair, uniform, and neutral system that reflected commercial realities and prohibited the use of arbitrary or fictitious customs values.
The WTO Customs Valuation Agreement we are commemorating today is in essence that Valuation Code with two key advancements:
- First, it strengthened the plurilateral GATT Valuation Code into a multilateral agreement, and therefore all WTO Members are obliged to comply; and
- Second, it ensures that the market access opportunities achieved through rounds of tariff reductions are not eroded as a result of arbitrary, fictitious or non-transparent valuation methodologies.
In so doing, the Customs Valuation Agreement was a forward-looking agreement for its time. Let me highlight two aspects that illustrate its progressive nature.
- First, the Agreement recognizes the importance of a constructive relationship between customs authorities and the private sector. It is premised on an idea that an informed and committed private sector is more likely to comply voluntarily. This partnership-based approach was a significant shift at the time, particularly given the importance for governments to maintain control over revenue fraud.
- Second, the Agreement introduced market-oriented and trade facilitating practices to customs valuation. For example, it established the transaction value – i.e., the price actually paid or payable – as the basis for customs valuation. This approach reflected market conditions more accurately than other valuation methods by ensuring that the customs value of goods is based on the true value of goods negotiated between buyer and seller.
The Customs Valuation Agreement serves also as a trade facilitating tool. Given the inherent complexity of customs valuation, by providing a uniform set of rules for valuing goods, it leads to greater predictability and consistency in the treatment of goods at the border. This standardization helps minimize costs and delays for developed and developing Members alike by enabling traders to understand, in advance, how their goods will be valued.
Nevertheless, the implementation of the Customs Valuation Agreement is not without challenges. For some Members, customs duties remain a significant source of government revenue; others operate under trade policy frameworks that include high tariffs or face the realities of large informal trading sectors. In some cases, customs administrations also contend with limited resources, which can impede full and effective implementation of the Agreement.
The Committee has shown its commitment to supporting implementation efforts by Members. This activity includes targeted initiatives, such as the 2002 seminar on mobilizing technical assistance and, more recently, the 2019 workshop organized in collaboration with the Trade Facilitation Agreement Facility to address implementation challenges and explore how the TFA can reinforce CVA implementation.
Just last year, the Committee brought renewed attention to one of the fundamental aspects of the Customs Valuation Agreement and the WTO more broadly – transparency. Your efforts to strengthen the notification process have yielded tangible results, leading to the strongest year in recent memory for notification submissions. This is a commendable achievement. Transparency through timely notifications is essential – not only for the effective operation of the CVA, but also for the credibility and functioning of the WTO as a whole. I encourage you to continue this important work. Thirty years on, notification remains a cornerstone of successful implementation.
Your Committee stands as a reminder that WTO Agreements cannot operate in a silo nor in a vacuum. Let me give you an example. As you know, this Committee also oversees the Preshipment Inspection Agreement. Historically, the CVA was strongly linked to the Preshipment Inspection Agreement because some governments relied on preshipment inspection entities to carry out customs valuation-related activities. However, since the entry into force of the Trade Facilitation Agreement in 2017, which prohibits the use of preshipment inspections for customs valuation, this linkage has naturally diminished. At the same time, a growing alignment between the Customs Valuation Agreement and the Trade Facilitation Agreement has emerged. These two Agreements now reinforce each other in promoting transparency, efficiency, and predictability at the border.
Over the past 30 years, the Customs Valuation Agreement has proven to be flexible and successful at adapting to a changing environment by requiring that customs value be based on simple and equitable criteria consistent with commercial practices. But today, we are entering a new phase – one marked by rapid, transformative change. Digitalization, artificial intelligence, and evolving trade dynamics will challenge us to interpret and apply the CVA in new and complex ways.
It is up to you as Members of the Committee on Customs Valuation to collectively ensure uniformity in interpretation and application of the Agreement in this volatile trading environment and constantly evolving business models. In this effort, our continued partnership with the World Customs Organization Technical Committee on Customs Valuation will continue to be indispensable. I am pleased that we are joined today by the Chairperson of this Committee, whose presence reflects the strength of that collaboration.
As we mark 30 years of this Agreement, I wish to thank all our delegates, as well as the Secretariat team, for the dedication and professionalism that has sustained its implementation. I am confident that, through your continued engagement, this Committee will remain a cornerstone of the multilateral trading system – resilient, effective, and ready to address the challenges we are facing.
Thank you.
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