AEO boost to foster additional trade

China will broaden the scope of the Authorized Economic Operator (AEO) program to encompass emerging sectors such as cross-border e-commerce and a wide array of small and medium-sized enterprises, thus bolstering commercial exchanges both domestically and globally, said a senior Customs official on Wednesday.

The AEO program is advocated by the World Customs Organization (WCO) to strengthen international supply chain security and facilitate the movement of legitimate goods.

Under the program, Customs authorities from various countries and regions form partnerships with industries to collaboratively cut barriers to Customs procedures and enhance international trade efficiency.

China will work with other WCO members to expand institutional openness in areas such as Customs rules, regulations, management methods and standards to assist more domestic and foreign companies in foreign trade, said Wang Lingjun, vice-minister of China's General Administration of Customs.

Speaking at the opening ceremony of the WCO Global AEO Conference 2024 in Shenzhen, Guangdong province, on Wednesday, Wang said China will explore the establishment of a regional AEO mutual recognition cooperation mechanism to promote global trade interconnectivity.

By the end of March this year, China had signed AEO mutual recognition agreements with 26 economies, such as the European Union and South Africa, covering 52 countries and regions.

Ian Saunders, secretary-general of the Brussels-based WCO, said it is necessary to simplify the requirements for the AEO program to make it more accessible to small and medium-sized enterprises while ensuring a comprehensive understanding of the compliance environment.

It is essential to strengthen the arrangements of mutual recognition agreements and forms of international technical cooperation to expand the advantages of the AEO program and make it more attractive, said Saunders.

Currently, China has more than 5,800 companies with AEO qualifications. Last year, they accounted for 20.5 percent of China's total Customs declarations, contributing 37.1 percent of the national import and export value and 37 percent of tax revenue, said the GAC.

Song Yiwen, president of the supply chain management department at Shenzhen-based Honor Device Co, said that after obtaining AEO qualification in 2021, the company has benefited from efficiency improvements and convenient policies brought by the AEO system.

"As a representative of an AEO enterprise in the field of intelligent devices in China, the system enables companies to be more competitive in the international market and gain the trust of partners more easily," said Song, adding that after achieving the status, the inspection rate for the company's products has dropped by 80 percent.

Sharing similar views, Zhang Aixin, president of Valeo Niles (Guangzhou) Electronics Co — an auto parts and electronic components manufacturer — said since obtaining AEO certification at the end of 2023, the company's import and export volumes have been continuously increasing, and they are expected to grow by 20 percent year-on-year this year.