The World Trade Organization (WTO) is an international organization that regulates trade between countries. One of the many agreements the WTO has put in place is the preshipment inspection agreement (PSI). This agreement aims to ensure that countries comply with certain standards when exporting goods.
Preshipment inspection refers to the inspection of goods by a third-party organization before they are shipped from the exporting country. The purpose of preshipment inspection is to verify the quality, quantity, and price of the goods being exported. This helps to prevent fraud, ensure that goods meet the regulatory requirements of the importing country, and protect consumers from substandard products.
The WTO agreement on preshipment inspection sets out the rules and guidelines for the implementation of preshipment inspection programs. It requires member countries to establish competent preshipment inspection authorities and to ensure that these authorities operate transparently, impartially, and in accordance with the WTO agreement.
The agreement also provides for the non-discrimination of imported goods on the basis of their country of origin. This means that the same standards and regulations must be applied to all imported goods, regardless of where they come from.
Furthermore, the agreement allows for the use of preshipment inspection as a tool for customs valuation. This means that the value of the goods being exported can be determined through preshipment inspection, rather than relying solely on the invoice provided by the exporter. This helps to prevent under-invoicing, which can be used to evade customs duties.
Overall, the WTO agreement on preshipment inspection is an important tool for ensuring fair trade practices and protecting the interests of both importers and consumers. By implementing preshipment inspection programs in accordance with this agreement, member countries can prevent fraud, ensure compliance with regulatory requirements, and promote transparency and fairness in international trade.