The Tools: from Diagnostic to

Implementation

Virginia Tanase

Coherence and consistencyA

PoA

Aims

(a) secure access to and from the sea by all means of transport according to applicable rules of international law;

(b) reduce costs and improve services so as to increase the competitiveness of their exports;

(c) reduce the delivered costs of imports;

(d) address problems of delays and uncertainties in trade routes;

(e) develop adequate national networks;

(f) reduce loss, damage and deterioration en route;

(g) open the way for export expansion;

(h) improve safety of road transport and security of people along the corridors.

WB

Tra

nsp

ort

Str

ateg

y Strategic directions

1. Create the conditions for increased support for transport investment and governance

2. Deepen engagement in the roads and highways subsector

3. Increase engagement in the urban transport subsector

4. Diversify engagement in transport for trade

- support public and private infrastructure investment to overcome physical or quality bottlenecks in transport so as to enable regional and international trade in goods and services

- increased attention to transport services

- develop the institutional capacity to implement transport and logistics strategies

- corridor approaches used in designing the strategies for major trade routes

5. Transport and climate change: control emissions and mitigate impactW

B T

rad

e S

trat

egy Priority areas

1. Trade Competitiveness and Diversification

- trade policy ; trade in services as a new means to access international best practices and expand exports; and the design and implementation of specific actions to address market and information failures

2. Trade Facilitation, Transport Logistics and Trade Finance

- to reduce the costs associated with moving goods along international supply chains, whether these are measured in terms of time, money, or reliability

- to enhance the performance of trade corridors used by land-linked developing countries, especially in Africa

3. Support for Market Access and International Trade Cooperation

4:Managing Shocks and Promoting Greater Inclusion

Road Transport is the dominant mode of transport in overland trade…

• There are significant prospects to reduce trade costs by improving the efficiency of road transport operations

• Most regional road transport markets, outside the EU, are not fully liberalized

• However, most effort goes into building roads rather than undertaking reforms in road transport services

Improved road

condition

Reduce vehicle

operating costs

Reduced transport

prices

Growth, trade and poverty

reduction

The assumption: Roads, Transport Services and Trade

4

Infrastructure Services Services users

Source: Raballand, 2013

1 2 3

International road transport services

• THE victim of market access restrictions, for various reasons:– to penalize the lack of

harmonization of technical standards/parameters

– to protect national carriers– for political reasons– because of bad enforcement

International road transport services

• Multilateral legal instruments (if any) set just the framework, minimal standards, acceptable to all

• Bilateral agreements are still the predominant barrier or tool for facilitation, even in high regional integration areas

Need more focus on road transport services …

• Developing and advocating for regional transport infrastructure

– World Bank invested close to USD14 billion from 1970-2007 in Africa (mostly on corridors)

• But …– Prices are still high in most

regions especially in Africa…

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• Worth remembering …– Regulation was originally intended

to protect rail traffic and incumbents

• But failed in– Regulating capacity and– Preventing the erosion of rail

transport

• Quantity regulation largely dismantled in developed countries

Bilateral agreements are the instrument of choice ..

• Bilateral agreements are the favored instrument of regulatory control

• There are multitudes of bilateral agreements.

– ECMT in 2002 found around 1,400 bilateral agreements between 43 European countries. Bilateral road transport agreements account for more than 95 percent of road transport operations between EU states and third countries.

– For operators, keeping track of all the agreements can be a significant regulatory burden.

• There is often unequal treatment of operators based on their country of registration.

– Reciprocity and territoriality are key principles in bilaterals

• Yet restrictions are often embedded in such agreements

• Liberalization of transport services can have a significant impact on supply and prices e.g. Laos - Thailand

20002001

20022003

20042005

20062007

20110

20406080

100120140

Agreements are not always concluded for pure transport purposes

• There are two main types of reasons for bilateral road transport agreements:– Economic

• To carry trade exchanges in an equitable manner • To send a signal to markets and develop demand. • In case of large investments performed in infrastructure, to

promote its use, including the development of ancillary activities. • To detail the implementation of broader commitments assumed

by the two parties in international multilateral legal instruments.

– Political• agreement s are used as a starting point to develop or improve

the relations between the two countries. • an economic (partial) solution to a political problem.

What World Bank projects told us

• Lack of traffic and transit rights (loading / unloading at borders)

• Different technical standards between neighboring countries, abusive roadside checks

• Market restrictions• Imposed cargo sharing/tour de rôle• Discrimination on grounds of goods’ origin, vehicle

plates etc• Low level of regional integration• Absence of multilateral agreements or poor

enforcement

What the bilateral agreements told us• Some of the bilateral agreements are quite old

– Often poorly enforced and at same time may lack modern provisions thereby perpetuating unsustainable practices.

• Restrictive bilateral agreements can introduce market distortions and increase costs. – Where bilateral agreements are based on a quota system, the

common practice is to fix the number of permits at the same level for both parties. Ignores potential for supply response.

• All the above lead to:– fragmented supply chains; high costs, transit times, and

uncertainty in cargo flows. – Operators finding it difficult to comply with requirements in

different markets, and a company’s efficient operations in one country may not create positive spillover effects in another country.

The approach …• 4-step process:

– Develop an analytical template and use it to generate an index of openness of cross-border road transport markets.

– Select benchmarks to compare the relative openness of each agreement.

– Select agreements to review.– Conduct a statistical analysis

to assess the relationship between demand for road transport services and the openness of the bilateral agreements between pairs of countries.

• Identified 11 core features:i. limitations of the scope of the

agreement ii. transport authorization requirements

and complexities/restrictions of transport permit management

iii. list of types of traffic exempted from permit requirements

iv. list of types of traffic exempted from quota requirements

v. cabotage traffic limitations vi. transit quota limitations vii. third-country traffic limitations viii. prescribed routes and border crossing

points ix. taxation-related limitations x. facilitation measures (driver, vehicle,

cargo) in place xi. transparency requirements.

Agre

emen

ts

revi

ewed

Geographic relation Number of selected bilateral agreements % of total

Europe-Europe 1823

Asia-Europe 2938

Africa-Europe 1317

Asia-Asia 912

Africa-Africa 79

South America 11

TOTAL 77 100

Geographic region

Multilateral agreement Number of countries

Europe (including Caucasus)

Recommended Model Bilateral Agreement on Road Transport between ECMT member countries

45a

South-East European Cooperation Initiative (SECI) Memorandum of Understanding on the Facilitation of International Road Transport of Goods

10

Black Sea Region Memorandum of Understanding on Facilitation of Road Transport of Goods in the BSEC Region; Black Sea Economic Cooperation (BSEC); Agreement on Multilateral Transit Permits

7

Asia (South-East Asia)

Agreement between and among the Governments of the Lao People’s Democratic Republic, the Kingdom of Thailand, and the Socialist Republic of Vietnam for Facilitation of Cross-border Transport of Goods and People (CBTA—Cross Border Transport Agreement)

3

Africa Memorandum of Understanding on Road Transportation in the Common Customs Area pursuant to the Customs Union Agreement between the Governments of Botswana, Lesotho, South Africa, and Swaziland

5

SATCC Model Bilateral Agreement on the Regulation of Cross-Border Freight Road Transport

15

Tripartite Agreement on Road Transport Uganda—Kenya—Tanzania 3

South America ALADI Agreement on International Land Transport 7

Mul

tilat

eral

ag

reem

ents

Maximizing benefits for countries

• Start negotiation only when all stakeholders have agreed on the mandate- this will ensure support in implementation!

• Include core elements in any bilateral road transport agreement

• Emphasize qualitative over quantitative and multilateral over bilateral regulation

• Adopt the principle of freedoms

Maximizing benefits for countries (1)

• Harmonize and simplify technical requirements

• Set harmonized and transparent rules for cross-cutting issues

• Nurture effective institutional and implementation arrangements

• Conform with major international obligations

Conclusion• Lack of consistency and transparency in

bilateral agreements reduces efficiency and increases cost of international road transport services

• A comprehensive approach including a model-agreement to reform the regulation of international road transport services is needed

Appeal

Please kindly share with us your bilateral agreements so that we can

continue this important work! Thank you!