Transcript Freedom of Transit

Trade Facilitation – Impossible
without Facilitating Logistics
Contribution by the International
Road Transport Union (IRU)
Peter Krausz, Head, Goods Transport and
Facilitation
2008 WTO Public Forum
Geneva, 25 September 2008
Contents
 Importance of Road Transport
 Cost of Barriers
 Ways of Facilitation
• UN Conventions
• WTO instruments
 GATT Article V and Road Transport
Importance of Road Transport
Importance of Road Transport
 Irreplaceable door-to-door service, major tool of human
and economic mobility, driver of globalisation
 Vital part of GDP production in spite of modest direct
contribution (France: 1.5%; India: 3.69%)
 Integral part of the logistic chain (logistics’ contribution
to GDP in India: 13%; Europe: 10%; US: 9.9%)
 job creator (3-4%)
 Road = decisive role in land transport modal split
Transport Volume (tkm) – GDP
Development in EU25, 1995=100%
108
106
104
102
100
98
96
94
1995 1996 1997 1998
Eurostat, 2008
1999 2000 2001 2002
2003 2004 2005 2006
Road Transport Share (tkm) in EU25
78
77
76
75
74
73
72
71
70
69
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Eurostat, 2008
Road transport tonnage distances
in Europe
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Evolution of IRU Membership
Created
1948
8 Founder States:
Belgium
Denmark
France
Netherlands
Norway
Sweden
UK
Switzerland
2008
180 Members
72 Countries
Updated January 2008
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Cost of Barriers
Cost of Barriers
16
14
USD Billions
12
10
8
6
4
2
0
Transport Costs only
Source: Hague Consulting Group, 1998
All Costs *
* Includes lost opportunities
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Border Waiting Time Costs Money!
Indicator
Value
Average number of TIR carnets issued per
year
2’923’481
Minimum number of border crossings in the
TIR system per year
8’770’443
Total waiting time, hour per year, for TIR
traffic
8’770’443
Value of an hour lost per truck, USD per hour
Total lost value per year, TIR traffic, USD
Total lost value**
1998-2005, TIR traffic, USD
50
438’522’188
3’508’177’500
* EU25 External, EU4, CIS & Balkan Borders, 1998-2005
**Direct costs can double through losses to producers and traders, including lost opportunities due to longer
and unreliable transport time, thus: total USD 7.0 billion.
Source: IRU 2006
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IRU Border Waiting Times
Observatory
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IRU Border Waiting Times
Observatory
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IRU Border Waiting Times
Observatory
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Border Crossing Stopping Point in
Europe 2009
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UN Conventions
TIR System
UN Border Control Harmonisation
Convention (1982) & Annex 8 (2008)
Covering main conditions of smooth border crossing
Driver
Procedure
Vehicle
Infrastructure
Monitoring
GATT Article V and Road Transport
Articles V, VIII and X - equally
important for transport
Art. V:
Transit freedom
Art. X:
Information,
appeals
Art. VIII:
Fees & charges
Dispute
settlement
The IRU’s Views on GATT Article V
on the Freedom of Transit
General comments
 facilitation of int’l road transport has been
neglected
 trade facilitation - impossible without
facilitated transport (cargo, vehicle & driver)
 GATT Article V - best legal instrument
providing for the Freedom of Transit
 Doha failure deals a blow to trade &
transport facilitation
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The IRU’s Views on GATT Article V
on the Freedom of Transit
Consequences for new Agreement
 do not to substitute, simply complement
 do not edit, reduce or summarise freely, neither
change order of items
 do not “overwrite” multilateral conventions (like
on customs transit)
 do submit regional transit agreements to
multilateral conventions
 do agree on the new WTO trade facilitation tool
separately
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The IRU’s Views on GATT Article V
on the Freedom of Transit
Definition of Transit
 covers the most recent changes in
transport technology and techniques
 but does not cover the domestic
transport legs ( exportation and
importation) of the international transit of
goods
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The IRU’s Views on GATT Article V
on the Freedom of Transit
Consequences for the Definition of Transit
 no need for new definitions, only precisions
 distinguish “transit” of goods and/or of means
of transport from “customs transit systems”
 complement Article V to apply mutatis
mutandis to domestic transport legs of
international transit of goods and in specific
transit situations (e.g. ports traffic)
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The IRU’s Views on GATT Article V
on the Freedom of Transit
Freedom of Transit
 Article V, a cornerstone of the GATT– too often
disregarded
 non-discrimination - has suffered many
infringements
 MFN treatment - has been subject to too many
flagrant infractions
 Article V - for how long a “Sleeping Beauty”?
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The IRU’s Views on GATT Article V
on the Freedom of Transit
Consequences for the Freedom of Transit
 reinforce the freedom of transit
 no discrimination on any grounds
 no quantitative limitations of means of
transport
 prescribed routes or escort only exceptionally
 NT or MFN: whichever is more favourable for
international transit
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The IRU’s Views on GATT Article V
on the Freedom of Transit
Most Convenient Routes, no Delays & no
Restrictions
 shippers and transport operators must be free
to choose the most convenient itinerary for
transit
 obviously limited to using appropriate
customs houses
 transit traffic of goods and/or means of
transport must not be subject to unnecessary
delays or restrictions
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The IRU’s Views on GATT Article V
on the Freedom of Transit
Consequences for the Most Convenient
Routes, No delays & No Restrictions
 routes must always remain most convenient
 new control technology or joint controls at
borders do not produce desired effects without
access lanes and routine controls / physical
inspections being separated
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The IRU’s Views on GATT Article V
on the Freedom of Transit
Duties and Charges; Regulations and
Formalities – principles to preserve
 transit must be exempt from customs duties
and other charges except for services
rendered – to reinforce
 drivers and operators are very often victims of
rent-seeking practices as well as procedural
failures at borders (leading to unjustified
customs claims)
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General Conclusions
 Road transport – indispensable
 Losses are preventable
 Principal ways of facilitation: UN
Conventions and WTO instruments
 Freedom of sea routes has enormously
contributed to progress – high time to
provide same freedom to road transport
 GATT Article V to be reconfirmed by new
WTO facilitation instrument as an
independent WTO tool
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