Trade Facilitation – Impossible without Facilitating Logistics Contribution by the International...
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Trade Facilitation – Impossible without Facilitating Logistics
Trade Facilitation – Impossible without Facilitating Logistics
Contribution by the International Contribution by the International Road Transport Union (IRU)Road Transport Union (IRU)
Peter Krausz, Head, Goods Transport and Facilitation
2008 WTO Public Forum Geneva, 25 September 2008
Contribution by the International Contribution by the International Road Transport Union (IRU)Road Transport Union (IRU)
Peter Krausz, Head, Goods Transport and Facilitation
2008 WTO Public Forum Geneva, 25 September 2008
ContentsContents
Importance of Road Transport
Cost of Barriers
Ways of Facilitation
• UN Conventions
• WTO instruments
GATT Article V and Road Transport
Importance of Road Transport
Cost of Barriers
Ways of Facilitation
• UN Conventions
• WTO instruments
GATT Article V and Road Transport
Importance of Road TransportImportance of Road Transport
Importance of Road TransportImportance 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
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%
Transport Volume (tkm) – GDP Development in EU25, 1995=100%
94
96
98
100
102
104
106
108
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
94
96
98
100
102
104
106
108
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Eurostat, 2008
Road Transport Share (tkm) in EU25Road Transport Share (tkm) in EU25
69
70
71
72
73
74
75
76
77
78
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
69
70
71
72
73
74
75
76
77
78
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Eurostat, 2008
© International Road Transport Union (IRU) 2008 Page 7
Road transport tonnage distancesRoad transport tonnage distancesin Europein Europe
Road transport tonnage distancesRoad transport tonnage distancesin Europein Europe
© International Road Transport Union (IRU) 2008 Page 8
© International Road Transport Union (IRU) 2008 Page 9
Evolution of IRU MembershipEvolution of IRU MembershipEvolution of IRU MembershipEvolution of IRU Membership
Updated January 2008Updated January 2008
CreatedCreated
19481948
8 Founder States:8 Founder States:
CreatedCreated
19481948
8 Founder States:8 Founder States:
BelgiumBelgium DenmarkDenmark FranceFrance NetherlandsNetherlands
NorwayNorway SwedenSweden UKUK SwitzerlandSwitzerland
2008 2008 180 Members180 Members 72 Countries 72 Countries
Cost of BarriersCost of Barriers
© International Road Transport Union (IRU) 2008Page 11
Cost of BarriersCost of BarriersCost of BarriersCost of Barriers
0
2
4
6
8
10
12
14
16
USD
Billio
ns
Transport Costs only All Costs *0
2
4
6
8
10
12
14
16
USD
Billio
ns
Transport Costs only All Costs *
Source: Hague Consulting Group, 1998Source: Hague Consulting Group, 1998 * Includes lost opportunities* Includes lost opportunities
© International Road Transport Union (IRU) 2008 Page 12
IndicatorIndicator ValueValueAverage number of TIR carnets issued per Average number of TIR carnets issued per yearyear 2’923’4812’923’481
Minimum number of border crossings in the Minimum number of border crossings in the TIR system per yearTIR system per year 8’770’4438’770’443
Total waiting time, hour per year, for TIR Total waiting time, hour per year, for TIR traffictraffic 8’770’4438’770’443
Value of an hour lost per truck, USD per hourValue of an hour lost per truck, USD per hour 5050
Total lost value per Total lost value per yearyear, TIR traffic, USD, TIR traffic, USD 438’522’188438’522’188
Total lost value**Total lost value**1998-2005, TIR traffic, USD 1998-2005, TIR traffic, USD 3’508’177’5003’508’177’500
* * EU25 External, EU4, CIS & Balkan Borders, EU25 External, EU4, CIS & Balkan Borders, 1998-20051998-2005 **Direct costs can double through losses to producers and traders, including lost opportunities due to **Direct costs can double through losses to producers and traders, including lost opportunities due to longer and unreliable transport time, thus: longer and unreliable transport time, thus: totaltotal USD 7.0 billionUSD 7.0 billion..
Source: IRU 2006Source: IRU 2006
Border Waiting Time Costs Money!Border Waiting Time Costs Money!Border Waiting Time Costs Money!Border Waiting Time Costs Money!
© International Road Transport Union (IRU) 2008 Page 13
IRU Border Waiting Times IRU Border Waiting Times ObservatoryObservatory
IRU Border Waiting Times IRU Border Waiting Times ObservatoryObservatory
© International Road Transport Union (IRU) 2008 Page 14
IRU Border Waiting Times IRU Border Waiting Times ObservatoryObservatory
IRU Border Waiting Times IRU Border Waiting Times ObservatoryObservatory
© International Road Transport Union (IRU) 2008 Page 15
IRU Border Waiting Times IRU Border Waiting Times ObservatoryObservatory
IRU Border Waiting Times IRU Border Waiting Times ObservatoryObservatory
© International Road Transport Union (IRU) 2008 Page 16
© International Road Transport Union (IRU) 2008 Page 17
IRU Border Waiting Times IRU Border Waiting Times ObservatoryObservatory
IRU Border Waiting Times IRU Border Waiting Times ObservatoryObservatory
UN ConventionsUN Conventions
TIR SystemTIR SystemTIR SystemTIR System
Article 3 – Transport Operation
Move away controls from borders
Special transport > special treatment:
speed, lane, advance notification
Perishable cargo, live animals
Article 3 – Transport Operation
Move away controls from borders
Special transport > special treatment:
speed, lane, advance notification
Perishable cargo, live animals
UN Border Control Harmonisation Convention 1982 & Annex 8
Article 2 - VisaFacilitate procedure
Article 2 - VisaFacilitate procedure
Articles 4 and 5 - Vehicle
Use International Technical Inspection Certificate
Use International Vehicle Weight Certificate
Articles 4 and 5 - Vehicle
Use International Technical Inspection Certificate
Use International Vehicle Weight Certificate
UN Border Control Harmonisation Convention 1982 & Annex 8
Article 6 and 7 - Border Crossing Joint controls, one-stop, 24/24 Traffic separation; off-lane control Driver facilities Competitive forwarding agents Reporting mechanism
Article 6 and 7 - Border Crossing Joint controls, one-stop, 24/24 Traffic separation; off-lane control Driver facilities Competitive forwarding agents Reporting mechanism
UN Border Control Harmonisation Convention 1982 & Annex 8
Entry into Force – new Annex 8 20 May 2008
Governments to implement without delay!
Entry into Force – new Annex 8 20 May 2008
Governments to implement without delay!
UN Border Control Harmonisation UN Border Control Harmonisation Convention 1982 & Annex 8Convention 1982 & Annex 8
GATT Article V and Road TransportGATT Article V and Road Transport
© International Road Transport Union (IRU) 2008 Page 27
General commentsGeneral comments facilitation of int’l road transport has been facilitation of int’l road transport has been
neglectedneglected trade facilitation - impossible without trade facilitation - impossible without
facilitated transport facilitated transport (cargo, vehicle & driver)(cargo, vehicle & driver) GATT Article V - best legal instrument GATT Article V - best legal instrument
providing for the Freedom of Transitproviding for the Freedom of Transit Doha failure deals a blow to trade & Doha failure deals a blow to trade &
transport facilitationtransport facilitation
General commentsGeneral comments facilitation of int’l road transport has been facilitation of int’l road transport has been
neglectedneglected trade facilitation - impossible without trade facilitation - impossible without
facilitated transport facilitated transport (cargo, vehicle & driver)(cargo, vehicle & driver) GATT Article V - best legal instrument GATT Article V - best legal instrument
providing for the Freedom of Transitproviding for the Freedom of Transit Doha failure deals a blow to trade & Doha failure deals a blow to trade &
transport facilitationtransport facilitation
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
© International Road Transport Union (IRU) 2008 Page 28
do not to substitute, simply complementdo not to substitute, simply complement do not edit, reduce or summarise freely, neither do not edit, reduce or summarise freely, neither
change orderchange order of items of items do not “do not “overwrite”overwrite” multilateral conventions (like multilateral conventions (like
on customs transiton customs transit)) do submit regional transit agreements to do submit regional transit agreements to
multilateral conventionsmultilateral conventions do agree on the new WTO trade facilitation tool do agree on the new WTO trade facilitation tool
separatelyseparately
do not to substitute, simply complementdo not to substitute, simply complement do not edit, reduce or summarise freely, neither do not edit, reduce or summarise freely, neither
change orderchange order of items of items do not “do not “overwrite”overwrite” multilateral conventions (like multilateral conventions (like
on customs transiton customs transit)) do submit regional transit agreements to do submit regional transit agreements to
multilateral conventionsmultilateral conventions do agree on the new WTO trade facilitation tool do agree on the new WTO trade facilitation tool
separatelyseparately
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
Consequences for new AgreementConsequences for new Agreement
© International Road Transport Union (IRU) 2008 Page 29
Definition of TransitDefinition of Transit covers the most recent changes in covers the most recent changes in
transport technologytransport technology and techniques and techniques but does not cover the domestic but does not cover the domestic
transport legs ( exportation and transport legs ( exportation and importation) of the international transit of importation) of the international transit of goodsgoods
Definition of TransitDefinition of Transit covers the most recent changes in covers the most recent changes in
transport technologytransport technology and techniques and techniques but does not cover the domestic but does not cover the domestic
transport legs ( exportation and transport legs ( exportation and importation) of the international transit of importation) of the international transit of goodsgoods
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
© International Road Transport Union (IRU) 2008 Page 30
no need for new definitions, only precisionsno need for new definitions, only precisions distinguish “transit” of goods and/or of means distinguish “transit” of goods and/or of means
of transport from “customs transit systems”of transport from “customs transit systems” complement Article V to apply complement Article V to apply mutatis mutatis
mutandis mutandis to domestic transport legs of to domestic transport legs of international transit of goods international transit of goods andand in specific in specific transit situationstransit situations (e.g. ports traffic) (e.g. ports traffic)
no need for new definitions, only precisionsno need for new definitions, only precisions distinguish “transit” of goods and/or of means distinguish “transit” of goods and/or of means
of transport from “customs transit systems”of transport from “customs transit systems” complement Article V to apply complement Article V to apply mutatis mutatis
mutandis mutandis to domestic transport legs of to domestic transport legs of international transit of goods international transit of goods andand in specific in specific transit situationstransit situations (e.g. ports traffic) (e.g. ports traffic)
Consequences for the Definition of TransitConsequences for the Definition of TransitConsequences for the Definition of TransitConsequences for the Definition of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
© International Road Transport Union (IRU) 2008 Page 31
Freedom of TransitFreedom of Transit Article V,Article V, a a cornerstone of the GATTcornerstone of the GATT– too often – too often
disregardeddisregarded non-discrimination - has suffered many non-discrimination - has suffered many
infringementsinfringements MFN treatment - has been subject to too many MFN treatment - has been subject to too many
flagrant infractionsflagrant infractions Article V - for how long a “Sleeping Beauty”?Article V - for how long a “Sleeping Beauty”?
Freedom of TransitFreedom of Transit Article V,Article V, a a cornerstone of the GATTcornerstone of the GATT– too often – too often
disregardeddisregarded non-discrimination - has suffered many non-discrimination - has suffered many
infringementsinfringements MFN treatment - has been subject to too many MFN treatment - has been subject to too many
flagrant infractionsflagrant infractions Article V - for how long a “Sleeping Beauty”?Article V - for how long a “Sleeping Beauty”?
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
© International Road Transport Union (IRU) 2008 Page 32
reinforce the freedom of transitreinforce the freedom of transit
no discrimination on no discrimination on anyany grounds grounds
no quantitative limitations of means of transportno quantitative limitations of means of transport
prescribed routes or escort only exceptionallyprescribed routes or escort only exceptionally
NT or MFN: whichever is more favourableNT or MFN: whichever is more favourable for for international transitinternational transit
reinforce the freedom of transitreinforce the freedom of transit
no discrimination on no discrimination on anyany grounds grounds
no quantitative limitations of means of transportno quantitative limitations of means of transport
prescribed routes or escort only exceptionallyprescribed routes or escort only exceptionally
NT or MFN: whichever is more favourableNT or MFN: whichever is more favourable for for international transitinternational transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
Consequences for theConsequences for the Freedom of TransitFreedom of TransitConsequences for theConsequences for the Freedom of TransitFreedom of Transit
© International Road Transport Union (IRU) 2008 Page 33
Most Convenient Routes, no Delays & no Most Convenient Routes, no Delays & no RestrictionsRestrictionsMost Convenient Routes, no Delays & no Most Convenient Routes, no Delays & no RestrictionsRestrictions shippers and transport operators must be free shippers and transport operators must be free
to choose the most convenient itinerary for to choose the most convenient itinerary for transittransit
obviously limited to using appropriate customs obviously limited to using appropriate customs houseshouses
transit traffictransit traffic of goods and/or means of of goods and/or means of transport must not be subject to transport must not be subject to unnecessary unnecessary delays or restrictionsdelays or restrictions
shippers and transport operators must be free shippers and transport operators must be free to choose the most convenient itinerary for to choose the most convenient itinerary for transittransit
obviously limited to using appropriate customs obviously limited to using appropriate customs houseshouses
transit traffictransit traffic of goods and/or means of of goods and/or means of transport must not be subject to transport must not be subject to unnecessary unnecessary delays or restrictionsdelays or restrictions
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
© International Road Transport Union (IRU) 2008 Page 34
routes must routes must alwaysalways remain most convenient remain most convenient
new control technology or joint controls at new control technology or joint controls at borders do not produce desired effects without borders do not produce desired effects without access lanes and routine controls / physical access lanes and routine controls / physical inspections being separatedinspections being separated
routes must routes must alwaysalways remain most convenient remain most convenient
new control technology or joint controls at new control technology or joint controls at borders do not produce desired effects without borders do not produce desired effects without access lanes and routine controls / physical access lanes and routine controls / physical inspections being separatedinspections being separated
Consequences for theConsequences for the Most Convenient Most Convenient Routes, No delays & No RestrictionsRoutes, No delays & No RestrictionsConsequences for theConsequences for the Most Convenient Most Convenient Routes, No delays & No RestrictionsRoutes, No delays & No Restrictions
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
© International Road Transport Union (IRU) 2008 Page 35
Duties and Charges; Regulations and Duties and Charges; Regulations and Formalities – principles to preserveFormalities – principles to preserveDuties and Charges; Regulations and Duties and Charges; Regulations and Formalities – principles to preserveFormalities – principles to preserve transit must be exempt from customs duties transit must be exempt from customs duties
and other charges except for services and other charges except for services rendered – to reinforcerendered – to reinforce
drivers and operators are very often victims of drivers and operators are very often victims of rent-seeking practicesrent-seeking practices as well as as well as procedural procedural failures at borders (leading to unjustified failures at borders (leading to unjustified customs claims)customs claims)
transit must be exempt from customs duties transit must be exempt from customs duties and other charges except for services and other charges except for services rendered – to reinforcerendered – to reinforce
drivers and operators are very often victims of drivers and operators are very often victims of rent-seeking practicesrent-seeking practices as well as as well as procedural procedural failures at borders (leading to unjustified failures at borders (leading to unjustified customs claims)customs claims)
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
The IRU’s Views on GATT Article VThe IRU’s Views on GATT Article Von the Freedom of Transiton the Freedom of Transit
© International Road Transport Union (IRU) 2008 Page 36
General ConclusionsGeneral ConclusionsGeneral ConclusionsGeneral 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
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
© International Road Transport Union (IRU) 2008 Page 37