SADC negotiations on trade in transport
servicesWorkshop for 22nd TNF Services
Johannesburg5 August 2014
Outline
• State of play in negotiations• Classification issues• Issues arising from sector study• Summary of requests and offers• Issues related to TCM Protocol• How will the negotiations make a difference to regional trade• Decisions required• Key questions for breakout groups
State of play with FS negotiations
• Sector forum – 2012• Requests from 5 Member States• Initial offers from 8 Member States (of which 2 recently received)• No revised offers as yet in response to bilateral negotiations
Africa’s transport corridors
SADC’stransport corridors
Logistics Performance Index 2012
Country Year LPI Rank LPI Score Customs Infrastruc-ture
Inter-national
shipments
Logistics compe-tence
Tracking & tracing Timeliness
Singapore 2012 1 4.13 4.10 4.15 3.99 4.07 4.07 4.39Hong Kong,
China 2012 2 4.12 3.97 4.12 4.18 4.08 4.09 4.28Finland 2012 3 4.05 3.98 4.12 3.85 4.14 4.14 4.10
Germany 2012 4 4.03 3.87 4.26 3.67 4.09 4.05 4.32Netherlands 2012 5 4.02 3.85 4.15 3.86 4.05 4.12 4.15
Denmark 2012 6 4.02 3.93 4.07 3.70 4.14 4.10 4.21Belgium 2012 7 3.98 3.85 4.12 3.73 3.98 4.05 4.20
Japan 2012 8 3.93 3.72 4.11 3.61 3.97 4.03 4.21United States 2012 9 3.93 3.67 4.14 3.56 3.96 4.11 4.21
United Kingdom 2012 10 3.90 3.73 3.95 3.63 3.93 4.00 4.19
Logistics Performance Index 2012
Country Year LPI Rank LPI Score Customs Infrastruc-ture
Inter-national
shipments
Logistics compe-tence
Tracking & tracing Timeliness
South Africa 2012 23 3.67 3.35 3.79 3.50 3.56 3.83 4.03Malawi 2012 73 2.81 2.51 2.78 3.01 2.85 2.56 3.09
Madagascar 2012 84 2.72 2.80 2.40 2.40 2.80 2.80 3.13Tanzania 2012 88 2.65 2.17 2.41 2.91 2.64 2.77 2.97Namibia 2012 89 2.65 2.73 2.72 2.49 2.65 2.85 2.52
Zimbabwe 2012 103 2.55 2.31 2.20 2.67 2.27 2.50 3.27Angola 2012 138 2.28 2.33 2.48 2.26 2.00 2.00 2.59Lesotho 2012 142 2.24 2.00 2.12 2.12 2.42 1.99 2.73
Congo, Dem. Rep. 2012 143 2.21 2.10 1.96 2.23 2.17 2.35 2.38
Bilateral transport agreements in SADC
COUNTRIES
Angola Botswana Lesotho Malawi Mozam
biqueNamibi
aSouth Africa
Swaziland
Tanzania Zambia Zimbab
we
Angola -
Botswana - MOU MOU-CMOU-
C /MOU MOU BRTLesotho MOU - MOU MOU Malawi - BP BRT C Mozambique BP - BG/BP BRT BG/BP BRTNamibia MOU-C - MOU-C BRT
South Africa MOU-
C /MOU MOU BRT BG/BP MOU-C - MOU BRT BRTSwaziland MOU MOU BRT MOU - Tanzania C BG/BP - BRT Zambia BRT BRT BRT - Zimbabwe BRT BRT BRT -
Bilateral transport agreements
• The agreements:• restrict the carriage of bilateral trade to carriers from the two countries• prohibit cabotage• provide that the regulatory authorities of the two parties shall share
information concerning traffic development• define the types of permits that may be issued, namely 14 days, short term (3
months), and long term (12 months)• state that cargo rates and charges shall be determined by the market• provide for the establishment of a joint route management group to
determine transport needs on a route, among other things
Transport issues
• Current levels of liberalization• Largely liberalized – road freight transport, maritime port management,
auxiliary services (freight forwarding; cargo handling; storage and warehousing)
• Protected – passenger services; rail• Air services – maintenance and repair; sales and marketing; CRS;
groundhandling• Limited opportunities – inland waterways, pipelines• Logistics?
Transport issues
• Cabotage• TCM Protocol recognizes bilateralism in transport, but how does this square
with regional integration?• Transport costs increased because of empty truck movements due to route
and cabotage restrictions
• Bilateral transport agreements• Accommodated by TCM• How to reflect within TIS negotiations
Non-TIS issues
• Trade facilitation • One of the most pressing problems - the effects of customs and revenue
authority border requirements and procedures
• Transport regulations and standards• Vehicle standards, e.g. axle weights• Drivers’ regulations, e.g. drivers’ hours, work permits
Business wish list for transport
• Inter-state recognition • Charges, levies, taxes • Overloading control • Infrastructure • Border procedures and
documents • Bribery and corruption
• Market access • Drivers • Road safety • Fitness of vehicles • Varied regulations between
countries
Classification
Sun-sector Scope
Maritime Ports and shippingInland waterwaysAir Excludes services related to traffic rights – generally understood to cover
sales and marketing, computer reservation services (CRS) and aircraft maintenance and repair services)What about ground handling?
SpaceRailRoadPipelineAuxiliary services E.g. freight forwarding, storage and warehousing, cargo handling)
Transport or logistics?
Assessment of requests DRC MUS SWZ SYC ZAF
Maritime NAM: All sub-sectors MOZ, SYC, ZAF: All sub-sectors (Mode 3)
SYC: Maritime auxiliary services
All MS: All sub-sectors, especially in Mode 3
AGO, BWA, DRC, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors
Inland waterways
NAM: All sub-sectors AGO, BWA, DRC, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors
Air NAM: All sub-sectors SYC, ZAF: Sales and marketing, CRS, aircraft maintenance and repair, ground handling, airport management (Mode 3)
AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors
Space AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors
Assessment of requests DRC MUS SWZ SYC ZAF
Rail NAM: All sub-sectors AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors
Road NAM: All sub-sectors
SWZ: Passenger and freight; rental of commercial vehicles with driver; support services
AGO, BWA, MOZ, MUS, MWI, NAM, SYC, TZA, ZMB, ZWE: All sub-sectors
LSO: Rental of commercial vehicles with driver; support services
AGO, BWA, DRC, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors
LSO: Passenger and freight (Modes 1 and 2); maintenance and repair (Mode 1); Rental of commercial vehicles with driver; support services
Assessment of requests DRC MUS SWZ SYC ZAF
Pipeline NAM: All sub-sectors AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors
Auxiliary NAM, SWZ: Cargo handling; storage and warehousing; freight transport agency services
AGO, BWA, MOZ, MUS, MWI, NAM, SYC, TZA, ZMB, ZWE: All sub-sectors
LSO, ZAF: Cargo handling; storage and warehousing; freight transport agency services
AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: Cargo handling; storage and warehousing; freight transport agency services
Assessment of offersDRC MWI MUS SYC SWZ TZA ZAF ZMB
Maritime Wide sectoral coverage – Mode 2 only
Full commitment
Passenger and freight transport
(excluding cabotage), rental of vessels,
maintenance and repair
Maintenance and repair,
vessel salvaging and
refloating (49% foreign
equity limitation in
Mode 3)
X Mainly none Unbound except for Mode 2
X
Inland waterways
Wide sectoral coverage – Mode 2 only
Full commitment
X X X X Unbound except for Mode 2
X
Air Wide sectoral coverage – Mode 2 only
X Broad commitments in three sub-
sectors – unbound in Mode 3 for
maintenance and repair
X X Passenger and freight
transportation; also includes
rental, maintenance
and repair and support services
Unbound in passenger and freight except for Mode 2; None except foreign equity
limit in ancillary air
services
X
Assessment of offers
DRC MWI MUS SYC SWZ TZA ZAF ZMB
Space X X X X X X Unbound except for Mode 2
X
Rail Wide sectoral coverage – Mode 2 only
Broad commitment – passenger and
freight unbound in
Mode 3
X X X Passenger, freight and
maintenance and repair - mainly none
Unbound except for Mode 2
X
Road Wide sectoral coverage – Mode 2 only
Broad commitment – passenger and
freight unbound in
Mode 1
X X Passenger and freight
(Mode 2 only); full
commitment for other sub-
sectors
Passenger and freight - mainly none
Unbound except for
Mode 2 and Mode 3 –
mainly None
Freight transport only, Mode 2 (full
commitment); Mode 3
(incorporation in Zambia + nationality
requirements)
Assessment of offers
DRC MWI MUS SYC SWZ TZA ZAF ZMB
Pipeline X Full commitment
X X X X Unbound except for Mode 2
X
Auxiliary services
Wide sectoral coverage – Mode 2 only
Cargo handling,
storage and warehousing,
freight transport agency services
Storage and warehousing,
freight transport agency
services and other services
X Cargo handling,
storage and warehousing,
freight transport agency services
X Unbound except for Mode 2
X
Issues raised in sector study
• Road: A commitment from all Member States to deregulate the supply of road transport services and focus on the achievement and promotion of the quality of transport services to meet the objectives of Chapter 6 of the TCM Protocol
• this could include a commitment to review the relevance of restrictive measures such as the “third country rule”, which the study observes that the RISDP was intended to review in its “Facilitation of Road Transport Market Liberalisation Project”, which aimed to develop a multilateral road transport agreement to replace the myriad of bilateral agreements;
• Rail: The need to develop a model for regional railways that will create separate entities for track supply and maintenance, safety regulator, economic regulator and train operators in order to create conditions to permit competition
Issues raised in sector study
• Ports and maritime: The need for institutional restructuring of most ports in the region to create a system of single port authorities with local landlord jurisdiction under a national ports authority and regulator
• Air: A commitment and action plan to implement the Yamoussoukro Decision on air transport
Trade provisions in TCM Protocol
Road transport• “Member States shall facilitate the unimpeded flow of goods and
passengers between and across their respective territories by promoting the development of a strong and competitive commercial road transport industry which provides effective transport services to consumers.” (Article 5.1, TCM Protocol)
• “Member States shall progressively introduce measures to liberalize their market access policies in respect of the cross-border carriage of goods [following three Phases of liberalization] [albeit guided by the need to ensure reciprocal benefits …].” (Article 5.3, TCM Protocol)
Trade provisions in TCM Protocol
Rail transport• “Member States shall facilitate the provision of a seamless, efficient, predictable,
cost-effective, safe and environmentally-friendly railway service which is responsive to market needs and provides access to major centres of population and economic activity.” (Article 7.1, TCM Protocol)
Maritime and inland waterways• “Member States shall promote the economic and social development of the region
by developing and implementing harmonized international and regional transport policies in respect of the high seas and inland waterways.” (Article 8.1, TCM Protocol)
• Article 8 includes such provisions as “promoting the role of the private sector in providing cargo handling services” and “the progressive elimination of restrictions, if any, on cabotage by ships registered in a Member State”
Trade provisions in TCM Protocol
Air services• Article 9 includes the provision that Member States agree to “the
gradual liberalization of intra-regional air transport markets for the SADC airlines”.
Key questions for breakout groups
Transport costs
1. How significant an issue for the SADC region are transport costs?
2. What can we learn from the study on competitive markets in transport services to help the negotiations on transport services?
Offers
3. With eight offers covering transport services, how far have requests have been met?
4. How far would these offers make a real difference to regional trade and regional integration in transport services? What is still needed?
Key questions for breakout groups
Sector study recommendations3. To what extent do Member States believe the sector
recommendations are appropriate to the objectives of regional integration in transport services?
4. How could the current negotiations support progress in these issues?
5. What scope is there for reflecting liberalization objectives in a reference paper of pro-competitive regulatory principles for the transport sector?