trade facilitation – impossible without facilitating logistics contribution by the international...

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

Road transport tonnage distancesRoad transport tonnage distancesin Europein Europe

Road transport tonnage distancesRoad transport tonnage distancesin Europein Europe


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


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


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!


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


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


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


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



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



Consequences for new AgreementConsequences for new Agreement


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




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




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”?




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



Consequences for theConsequences for the Freedom of TransitFreedom of TransitConsequences for theConsequences for the Freedom of TransitFreedom of Transit


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




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




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)




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

trade facilitation – impossible without facilitating logistics contribution by the international...

Documents

transport cargo

goods transport

transport operation

road transport share

europe slide

procedure slide

unreliable transport

tir system slide