Transport Services Liberalisation and Trade

Facilitation

SADC Transport Services Liberalisation Forum

Riverside Hotel, Durban South Africa11th -13th September, 2012

Prepared by: Natasha Ward &Viola Sawere

Introduction Definition and coverage

Trade facilitation Transport services

SADC Legal Framework Trade Protocol Protocol on Transport, Communication and

Meteorology Protocol on trade in Services

Which policy instrument for which Issue? Conclusion

Outline

Prime economic activity in itself (trade in transport services)

Infrastructure for most other economic activities High cost of trading in the region is partly due to

and challenges in services industry (transport, communication etc.

Hence the need for: trade facilitation and Trade in services libelisation agreements

Transport liberalization is an objective of trade and transport officials

Introduction: Transport Services

Users prefer liberal policy that offers wide choice Competitive, efficient and quality transport services

(thus delivery of goods and passengers at right place at the right time, & price)

Operators interest Fulfilling shippers’ demand & profits and wish to protect

home market from foreign competition Government (ministry & regulator)

Enabling Policy & regulation to the interest of each group Common goal is to address challenges in transport

industry limited interaction and limited understanding of the

differences and linkages of trade facilitation and trade liberalisation agenda

Important Note

No global agreed definition of trade facilitation but SADC Trade Protocol

“the coordination and rationalisation of trade procedures and documents relating to the movement of goods in international trade from the place of consignment to the destination”

to improve border and transit management procedures and their implementation

The main focus is to facilitate movement along the eighteen officially recognised corridors can be facilitated

Definition

Trade facilitation

• ‘identifying and addressing bottlenecks that are imposed by weaknesses in trade related logistics and regulatory regimes and that prevent the timely, cost effective movement of goods”

Transport Services liberalisation

• “enhancing access to the various transport markets and to substantially reduce or eliminate discriminatory measures which favour domestic service providers over foreign ones”

Definition

Transport services liberalisation agenda can be considered to be a subset of the broader trade facilitation agenda

The Coverage

Trade Facilitation

Competitiveness•Export promotion•Meeting international standards

Physical infrastructure•Roads, ports •Telecommunication infrastructure

Logistics and transport services•Promoting competition

Customs and boarder management

Transport services liberalisation

all measures that affect supply of transport services• Laws, regulations,

rules, guidelines etc.

in the various sub-sectors• Maritime, internal

water ways, Air, space, rail, road, pipeline & auxiliary services

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Classification of Transport ServicesA. Maritime Transport Services Passenger transportation Freight transportation Rental of vessels with crew Maintenance and repair of vessels Push and towing services Supporting services for maritime transport

B. Internal Waterways Transport Passenger transportation Freight transportation Rental of vessels with crew Maintenance and repair of vessels Push and towing services Supporting services for maritime transport

C. Air transport Services Passenger transportation Freight transportation Rental of vessels with crew Maintenance and repair of vessels Supporting services for maritime transport

D. Space Transport  

E. Rail transport Passenger transportation Freight transportation Maintenance and repair of vessels Push and towing services Supporting services for maritime transport

F. Road Transport Passenger transportation Freight transportation Rental of vessels with crew Maintenance and repair of vessels Push and towing services Supporting services for maritime transport

G. Pipeline Transportation of fuel Transportation of other goods 

H. Services auxiliary to all modes of transport Cargo handling services Storage and warehouse services Freight transport agency services Other

I. Other transport services

Trade Protocol Annex III: Simplification and harmonisation of trade

documentation and procedures Sub-comittee on Trade Facilitation

exportation and importation; export and import licensing; insurance of goods; transit operations; international transport and licensing of carriers; and statistical control and dissemination of information on trade documents

Transit Trade and Transit Facilities licensing of transistors and carriers; approval of

means of transport; bonds and securities; transit documents; transit procedures; and other provisions (customs and bonded warehouses

Legal Framework

Protocol on Transport Communication and Meteorology framework for cooperation in all modes of regional

transport Infrastructure development (hard and soft) and related

technical standards; Regulatory mechanisms on:

quantity (bilateral agreements; and quota and capacity management)

quality (vehicle standards and dimensions, loads and fitness testing)

safety (abnormal loads, hazardous/dangerous goods, and environmental protection)

market liberalisation for road and air transport services

Legal Framework Ctd.

Protocol on Trade in Services

elaborates the rules governing trade in services ( incl. transport services) through progressively liberalise

Provides for MFN and National Treatment Provides for the mutual recognition of

standards, requirements and qualifications; and transparency in domestic regulation to promote

trade

Legal Framework Ctd

Which instrument for which issue?

Trade Facilitation & Transport Services: Contrast

Discriminatory measures Cabotage

restrictions Recognition

(certificates, qualification and licences)

Investment related Establishing a

business in the other countries

Completion related issues Competition rules Anticompetitive

behaviours

Infrastructure issues Physical

infrastructure (eg. road & rail network, port facilities)

ICT Customs-related issues Transit Management

systems (bonds and guarantees)

Red tape, documentation (standards systems and requirements)

Other Standards & requirements Vehicle standard & dimensions Safety requirements

(abnormal load & dangerous goods)

Insurance Road user

charges Access to

facilities (ports & packing bays)

Mode of Supply

Description Example Measures which Restrict Trade

Mode 1 Cross-border trade

A domestic operator transports goods or people from its home base to a destination in another country

Quotas on the number of foreign vehicles/ planes/ ships entering the destination country

Mode 2 Consumption abroad

Nationals or companies from one country use transport services within another country to move people or merchandise within that territory

Foreign exchange restrictions in the consumers’ country of origin that prohibit him from purchasing a service abroad

Mode 3 Commercial presence

A transport operator from one country sets up a business in another country to supply services from within that country (either domestically or cross-border)

Joint venture/partnership requirements that limit the foreign ownership permitted in locally established and registered businesses

Mode 4 Temporary movement of natural persons

A transport operator uses a local driver/pilot/ crew to deliver cargo or people in a foreign territory or a transport operator uses foreign personnel in the operation of a commercial presence

Requirements to obtain a visa or work permits/ lack of recognition of pilots/ captain’s/ drivers’ qualifications or licenses across or between countries

Examples of Trade Restrictions in Transport Services by Modes of Supply

Measures which restrict Mode 3 Trade in Transport Services

PHASE 1 :Abolition of restrictions on carriers of two member states to carry goods on a defined route between (a) such states or (b) in transit across the territory of another member state en route to a third member state or non-member state. (Third country rule permitted and cabotage prohibited).

PHASE 2: Abolition of restrictions on carriers of one member state to carry goods on a defined route between another member state and a third member state or non-member state, irrespective of whether the carrier's vehicle traverses the territory of its home state. (Third country rule permitted and cabotage prohibited).

PHASE 3 Abolition of restrictions on carriers of one member state to carry goods between another member state and a third member state or a non-member state. (Abolition of the third country rule).

PHASE 4 • Allow cabotage.

Road Market liberalization agenda (PTCM)

Trade facilitation and transport services

liberalisation agendas are addressed in separate SADC instruments

Protocol on Transport, Communications and Meteorology appropriate legal framework in SADC for

addressing trade facilitation issues related to transport

Protocol on Trade in Services market access issues

Conclusion

Both the trade facilitation and the trade in services

agendas offer useful avenues for addressing key issues in the transport industry

a complementary processes to promote increased trade in goods and in transport

services Benefits from the two processes can only be

realized through policy coherence Essential to this co-ordination is the task of clearly

establishing the notion the overlapping agendas can be complementary as opposed to competing

Key Message

all transport stakeholders have a role to play in the

effort to capitalise on the synergies private sector (operators)

identify the challenges and suggest solution transport regulators

create and sustain an enabling environment to foster the growth of trade in both goods and services

policy makers (trade and transport) develop suitable policies and negotiate fair and

balanced agreements

Way forward