Factors impacting the negotiation of mutual recognition agreements of authorised economic operator programs

In the aftermath of the terrorist attacks on 11 September 2001 in the US, the World Customs Organization (WCO) developed a global program known as the SAFE Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) to strengthen security while maintaining trade facilitation. The program contains two key concepts: the Authorised Economic Operator (AEO) and Mutual Recognition Agreement (MRA).
An AEO is defined as a business that meets specified customs compliance standards and shows a demonstrated commitment to supply chain security. In return, they receive greater levels of trade facilitation than other businesses. Meanwhile, MRAs are the means through which two customs administrations recognise each other’s validation and authorisations of AEOs and agree to provide mutual trade facilitation benefits to their respective AEOs.
The MRA concept broadens the scope of AEO programs beyond national borders through the conclusion of bilateral and multilateral MRA negotiations. While the WCO has developed several tools to facilitate such MRA negotiations, the literature suggests that numerous challenges remain for countries who seek to negotiate MRAs.
This study aims to identify the factors that impact the negotiation of MRAs and to analyse the impact of such factors. It also examines the future trend of regional AEO programs and multilateral MRAs and assesses whether the WCO tools are sufficient to promote the MRA development process at both the bilateral and multilateral levels.
The study uses a convergent parallel mixed-methods design, in which data are collected from relevant documents, a survey and interviews. The survey and interviews have the same defined study population comprised of AEO and MRA experts in the public sector, academia, international organisations and the private sector. While descriptive statistics analyse the survey data, thematic analysis is employed to analyse the unstructured data in the documents, interviews and survey. The integration of both quantitative results and qualitative findings then enables a mixed-methods interpretation.
The findings suggest that an increase in regional AEO programs and multilateral MRAs will emerge as a major trend in the near future, while the conclusion of a global MRA appears unlikely. The study also finds that additional tools should be developed to supplement those currently available from the WCO.
Significantly, the research confirms that 19 factors that are addressed in the existing literature have an impact on MRA negotiations, together with a further 11 factors that are identified through the study’s qualitative approach.
The study concludes by presenting a model to facilitate the MRA development process at both the bilateral and multilateral levels. The model addresses all factors that have been identified as impacting the various phases of MRA development including the preparation, negotiation and implementation phases. The model provides customs administrations with a logical framework to identify and overcome difficulties as they seek to develop future bilateral or multilateral MRAs.