Trade in Transport Services in South Asia

Prabir DeRIS, New Delhi18 April 2013

Outline

• Importance of transport services• GATS and transport services• Transport services in South Asia• Major barriers to trade and transport servcies• Challenges• Recommendations

Why so important? • Essential for the physical movement of goods and

services– Produces tradable services

• Generates large scale employment (labour-intensive) – Helps reduce poverty

• Transportation services is very unique in terms of generation of capital as well as labour. – In some transportation services sectors such as air

transportation, difficult to substitute capital for labour

Service links drive production network and integration

Source: Kimura et al (2009)

Drivers of growth and rationale

• Trade in transportation services has grown rapidly, primarily driven by its import.

• In a static sense, benefits coming out of transport services have become negative or negligible for developing countries – while import of transportation services has been helping

India’s trade to reach global market, surplus generated in services trade sector is being wiped out by the rise in import of transportation services.

• In a dynamic sense, benefits are large, having strong spill over effects. The expansion of transportation services and the emergence of new type of transportation services have been driven by income-related demand shifts, technological developments, falling costs of communications and the increased presence of MNEs.

• Transportation services trade liberalization is a necessity for the integration of the world economy.

Transport services in GATS

• Air transport• Land transport• Maritime transport• Services auxiliary to all modes of transport —

Logistics services

Air transport services • Air transport services are governed by a specific annex of the GATS. • A first review took place in 2000-2003. The second review is on-going. • In preparation for the second review, WTO developed the Quantitative

Air Services Agreements Review (QUASAR) database and methodology to assess, on a universal scale, the degree of liberalization achieved by the air transport sector.

• WTO also produced the Air Service Agreements Projector (ASAP), an analytical tool that allows for the visualisation of elements of the QUASAR database:– information on an economy's network of bilateral Air Services Agreements

and correlated traffic flows.• On 16 January 2013, the WTO released an update to its ASAP tool, based

on 2011 regulatory and traffic data.

Land transport

• Land transport sector covers a wide range of activities which often have little in common.

• Some types of transport are highly capital-intensive (rail transport, pipelines), whereas others require relatively little investment (taxis, trucks, even coaches).

• Some types of transport employ large numbers of people (rail transport, for example, taxis, HGVs), whereas in other cases labour costs are of only marginal importance (pipelines).

Maritime transport

• Maritime services have benefited in recent years by considerable expansion fostered by globalization.

• Many restrictive maritime policies have disappeared or ceased to be applied.

• Maritime services is an area where negotiations were scheduled to improve on the commitments included in the initial Uruguay Round schedules of commitments.

• Negotiations were originally due to end in June 1996 but participants failed to agree on a package of commitments. Talks resumed when the new services round of negotiations started in 2000.

• Commitments already exist in some countries' schedules, covering the three main areas in this sector: access to and use of port facilities; auxiliary services; and ocean transport.

Services auxiliary to all modes of transport — Logistics services

• The sector includes cargo handling services, storage and warehouse services, freight transport agency services including other auxiliary transport services, and other supporting and auxiliary transport services (freight brokerage services; bill auditing and freight rate information services; transportation document preparation services; packing and unpacking services; freight inspection, weighing and sampling services; and freight receiving and acceptance services).

Basic principles of GATS

• All services are covered by GATS• MFN treatment applies to all services, except the one-

off temporary exemptions• National treatment applies in the areas where

commitments are made• Transparency in regulations, inquiry points• Regulations have to be objective and reasonable• International payments: normally unrestricted• Individual countries’ commitments: negotiated and

bound• Progressive liberalization: through further negotiations

GATS modes • Services supplied from one country to another (e.g.

international air or ocean shipping), officially known as “cross-border supply” (“mode 1”)

• Consumers or firms making use of a service in another country (e.g. transport repair, fueling, etc.), officially “consumption abroad” (“mode 2”)

• A foreign company setting up subsidiaries or branches to provide services in another country (e.g. transport company setting up operations in a country), officially “commercial presence” (“mode 3”)

• Individuals travelling from their own country to supply services in another (e.g. transport engineer or consultants), officially “presence of natural persons” (“mode 4”)

Transport services in South Asia

South Asia’s rising share in world services trade

World trade in services

World trade in transport

services

World trade in services

World trade in

transport services

World trade in services

World trade in

transport services

(%

1991 1991 2001 2001 2011 2011

Bangladesh 0.06 0.08 0.07 0.15 0.09 0.23

Bhutan 0.00 0.00 0.00 0.00 0.00 0.00

India 0.60 0.85 1.22 1.41 3.08 3.74

Maldives 0.01 0.01 0.02 0.01 0.03 0.01

Nepal 0.02 0.02 0.02 0.02 0.02 0.02

Pakistan 0.21 0.42 0.12 0.32 0.15 0.28

Sri Lanka 0.07 0.13 0.10 0.16 0.08 0.21

100.00 100.00 100.00 100.00 100.00 100.00Source: BOPS, IMF

Transport services one of the major contributors to services trade

1991 2001 2011

(%)

Bangladesh 37.26 48.56 58.55

Bhutan 17.25

India 38.80 28.17 28.26

Maldives 19.44 15.62 9.27

Nepal 24.73 18.94 19.42

Pakistan 54.18 62.58 43.34

Sri Lanka 49.10 39.58 58.76

Source: BOPS, IMF

India's Trade in Services in 2011

124.592, 48%

137.68, 52%

Export India

South Asia having rising share in world transport services, driven by India

1.512.06

4.50

01122334455

1991 2001 2011% (s

hare

in w

orld

tran

spor

t ser

vcie

s

South Asia’s Share in World Transport Services

1991 2001 2011

(US$ billion)

World 497.30 749.80 1979.70

South Asia 7.50 15.44 89.02

India 4.22 10.55 74.12

India’s share in South Asia (%) 56.25 68.30 83.26

Trade in Transport Services

Source: BOPS, IMF

Volume of transport services, 2011 –South Asia

Export Import Total

Bangladesh 0.27 4.23 4.51

Bhutan 0.03 0.00 0.03

India 17.48 56.64 74.12

Maldives 0.06 0.17 0.23

Nepal 0.04 0.28 0.32

Pakistan 1.64 3.99 5.64

Sri Lanka 1.39 2.78 4.17

Source: BOPS, IMF

(US$ billion)

Trends in transport services

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

1991 2001 2011

Export of Transport Services

Bangladesh Bhutan India Maldives

Nepal Pakistan Sri Lanka

0.00

10.00

20.00

30.00

40.00

50.00

60.00

1991 2001 2011

Import of Transport Services

Bangladesh Bhutan India Maldives

Nepal Pakistan Sri Lanka

Source: BOPS, IMF

Trends in transport services, freight

Export Import

2005 2011 CAGR 2005 2011 CAGR

(US$ million) (%) (US$ million) (%)

Bangladesh 24.49 32.11 4.62 1304.92 3714.43 19.05

Bhutan 0.07 0.11

India 4244.64 11453.22 17.99 14920.50 47321.00 21.21

Maldives 5.00 15.29 20.49 68.38 125.02 10.58

Nepal 78.03 152.49 11.81

Pakistan 118.00 125.29 1.00 1837.00 2934.12 8.12

Sri Lanka 53.60 166.61 20.81 888.89 2048.71 14.93

Source: BOPS, IMF

Rising growth and increasing deficit in transportation services

1991 2001 2011Bangladesh -0.35 -0.96 -3.96Bhutan 0.00 0.00 0.02India -2.27 -6.45 -39.16Maldives -0.01 -0.03 -0.12Nepal -0.06 -0.02 -0.24Pakistan -0.50 -0.74 -2.35Sri Lanka -0.24 -0.46 -1.39

2001 - 1991 2011 - 2001Bangladesh 10.16 15.10BhutanIndia 9.60 21.53Maldives 9.52 12.42Nepal 1.27 10.39Pakistan 1.30 9.05Sri Lanka 6.69 12.99

CAGR (%) Volume of Trade Deficit (US$ billion)

Source: Calculated based on BOPS, IMF

Widening trade deficit

Passenger Freight

2005 2011 2005 2011

(US$ million) (US$ million)

Bangladesh -230.92 -452.15 -1280.43 -3682.32

Bhutan 27.37 -0.04

India -1923.96 -2501.00 -10675.86 -35867.78

Maldives -24.31 -47.21 -63.38 -109.73

Nepal -28.41 -68.16 -78.03 -152.49

Pakistan 173.00 37.48 -1719.00 -2808.83

Sri Lanka 62.31 166.53 -835.30 -1882.10

Source: BOPS, IMF

Three South Asian countries follow world trend in services trade deficit

1991 2001 2011

Total services

Transport services

Total services

Transport services

Total services

Transport services

(US$ billion)

Bangladesh -264.23 -348.22 -769.31 -960.02 -2851.28 -3960.81

Bhutan -5.10 -18.25 -35.03 24.64

India -1019.62 -2267.00 -2761.90 -6446.93 13086.00 -39163.90

Maldives 65.93 -9.44 244.24 -33.24 1440.96 -115.33

Nepal 55.91 -61.90 198.57 -24.35 81.32 -238.27

Pakistan -783.28 -503.81 -871.00 -735.00 -2927.82 -2350.53

Sri Lanka -215.89 -235.10 -394.02 -460.68 -928.04 -1385.24

World -43500.00 -41300.00 -14100.00 -71400.00 201200.00 -231900.00Source: BOPS, IMF

Major barriers and challenges to services trade

Major barriers• Large trade and investment barriers (visa

restrictions, domestic regulations, etc.)• Inadequate infrastructure – national and

regional (inadequate & poor stock and missing links in infrastructure)

• Absence of regional transit trade (no regional transit)

• High trade costs (transport costs outweigh tariffs)

• Others

Trade and connectivity flow – South Asia with neighbouring regions – rising trade not

supported by adequate connectivity

SouthAsia

Central Asia

Southeast AsiaMiddle east/

Gulf

Southwest Asia

ANZ +Pacific

East Asia

Africa

Europe

Trade linkage (strong)

Connectivity linkage (weak)

Weak

Moderate

Strong

Source: De (2012)

Logistics Performance Index

Country India Afghanistan Bhutan Nepal Pakistan

2007 2012 2007 2012 2007 2012 2007 2012 2007 2012

LPI 3.07 3.12 1.21 2.24 2.16 2.38 2.14 2.20 2.62 2.53

Customs 2.69 2.70 1.30 2.22 1.95 2.14 1.83 2.07 2.41 2.05

Infrastructure 2.90 2.91 1.10 1.87 1.95 1.83 1.77 1.80 2.37 2.08

International shipments 3.08 3.13 1.22 2.24 2.06 2.44 2.09 2.21 2.72 2.91

Logistics competence 3.27 3.16 1.25 2.09 2.18 2.24 2.08 2.07 2.71 2.28

Tracking & tracing 3.03 3.14 1.00 2.37 2.27 2.54 2.33 2.26 2.57 2.64

Timeliness 3.47 3.61 1.38 2.61 2.57 2.99 2.75 2.74 2.93 3.08

Source: World Bank

Trading across BorderAfghanistan Bhutan India Nepal Pakistan

2006 2013 2006 2013 2006 2013 2006 2013 2006 2013

Documents to export (number) 10 10 9 9 9 9 11 11 8 8

Time to export (days) 67 74 38 38 27 16 43 41 31 21

Cost to export (US$ per container) 2,180 3,545 1,150 2,230 864 1,120 1,600 1,975 996 660

Documents to import (number) 10 10 12 12 11 11 11 11 8 8

Time to import (days) 80 77 38 38 41 20 35 38 39 18

Cost to import (US$ per container) 2,100 3,830 1,780 2,330 1,324 1,200 1,725 2,095 317 705Source: World Bank

Some major challenges• Cumbersome procedures, archaic laws and non-

transparency in domestic regulations• Poor logistics infrastructure and complex supply chain

– High time and cost to export and import• Unfavourable payment system, mistrust and high bank &

insurance premium • Lack in simplification and harmonization of trade

procedures, more particularly at the border. Absence of regional corridor and modern corridor management techniques

• No master plan for South Asia connectivity as yet• Lack of financing and no resource mobilisation plan for

implementing regional connectivity projects• No regional institution for trade facilitation including

services trade.

Regional corridors in neighbouring regions

South Asia

SRMTC?

CAREC Economic Corridors

GMS Economic Corridors

Southeast Asia

Central Asia

IMT-GT Economic Corridors

BIMP-EAGARegionalCorridors

Trade and connectivity flow within South Asia – lopsided flows, but having high subregional potential

PakistanIndia

Sri Lanka

Nepal

Bangladesh

Bhutan

Southeast and

East Asia

MDS

AFG

ESAS

38% share in regional

trade (2011)

WSAS

Southwest andGulf

Central Asia

ILS

29% share in regional

trade (2011)Air

Land

Corridor modes

Pakistan

AFG

IndiaPakistan

AFG

MDS

IndiaPakistan

AFG

Sri Lanka

MDS

IndiaPakistan

AFG

Bangladesh

Sri Lanka

MDS

IndiaPakistan

AFG Bhutan

Bangladesh

Sri Lanka

MDS

IndiaPakistan

AFG Nepal Bhutan

Bangladesh

Sri Lanka

MDS

IndiaPakistan

AFG

Strong

Moderate

Weak

Ocean

Source: De (2012)

Established railways, but gauge changes lead to multiple handling

Source: taken from TAR, UNESCAP

Multiple handling in rail and road

• Trade Procedures at South Asia border points

Source: Based on ADB

Supply Chain complexity

Need to facilitate express delivery chain in South Asia

Pick-upLocal station

Gateway export Hub

Gatewayimport

Local station Delivery

Source: Author

Documents related to Exportation of Rice(from purchase order until the cargo container leaving the sea port)

21. Master Sea Cargo Manifest(17)22. House Sea Cargo Manifest (37)23. Export Declaration (114)24. Good Transition Control List (27)25. Application for Permission to Export Rice (KP. 2)

(24) 26. Sales Report (KP 3) (21)27. Application for the Collection of the Permit for the

Export of Rice (A. 3) (35)28. Permit for the Export of Rice (A. 4) (35)29. Application for Certificate of Standards of Product

(MS. 13/1) (44) 30. Certificate of Analysis (17)31. Certificate of Product Standards (MS. 24/1) (45)32. Certificate of Fumigation (21)33. Application for Phytosanitary Certificate (PQ. 9)

(29)34. Phytosanitary Certificate (33)35. Application for Certificate of Origin (42)36. Certificate of Origin (38)

1. Proforma Invoice (35)2. Purchase Order (39)3. Commercial Invoice (51)4. Application for Letter of Credit (24)5. Letter of Credit (32)6. Packing List (25)7. Cargo Insurance Application Form (20)8. Cover Note (23)9. Insurance Policy (24)10. Booking Request Form – Border Crossing (25)11. Booking Confirmation – Border Crossing (30)12. Booking Request Form – Inland Transport (16)13. Booking Confirmation – Inland Transport (18)14. Bill of Lading (42)15. Empty Container Movement Request (TKT 305)

(20)16. Request for Port Entry (TKT 308.2) (27) 17. Equipment Interchange Report (EIR) (24)18. Container Loading List (28)19. Container List Message (32)20. Outward Container List (34) * Number in parenthesis is the no. of data elements

36 Documents involving 15 parties, and more than 1,140 data elements to be filled in

A Thai Case BPA Example

Regulatory Docs

Transport Docs

Buy/Pay Docs

A Business Process Analysis - in Exporting Jasmine Rice from Thailand -

1. Buy - Conclude sales contract and trade terms2. Obtain export permit3. Arrange transport4. Arrange the inspection and fumigation 5. Obtain cargo insurance6. Provide customs declaration 7. Collect empty container(s) from yard

8. Stuff container(s)9. Transfer to port of departure10. Clear goods through customs 11. Handle container at terminal and stow on vessel12. Prepare documents required by importer13. Verify the accuracy/authenticity of exported cargo14. Pay - Claim payment of goods

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Day

Process

20

10

0

5

15

3 days

2 days

3 days

4 days

1 day

1

3

5

6 7 8 9

12

14

2

2 days4

2 days 10

1 day

131 day

16

11

Time-Procedure Chart

16 days are required for these procedures

and documents transaction

Export of carpet by Nepal through Port of CalcuttaProduct: Carpet

Time procedure chart

Export and import time in transit corridor

Process Product Exporter Importer ProcedureTime

(Days)

Export Carpet Nepal Third country

Buys (pre-shipment procedure) 5.00Export/Import proceduresDocuments preparation 8.00Inland transportation 2.00Time at Customs 2.00Time at border 2.00Time at transit 9.00Pay 1.00

Import CSOThird country

Nepal

Buys (pre-shipment procedure) 4.00Export/Import proceduresDocuments preparation 10.00Time at transit 11.00Time at Customs 1.00Time at border 1.00Inland transportation 1.00

Pays (post-shipment procedure) 1.00

Good progress, but manual handling of documentation still in South Asia

Sr. No. Process Submission of Documents

1 Buy Electronic and manual

2 Obtain export permit Electronic

3 Contract registration and inspection Electronic and manual

4 Excise inspection Manual

5 Obtain cargo insurance Electronic

6 Arrange pre-shipment inspection Manual

7 Obtain certificate of origin Electronic and manual

8 Obtain SAFTA certificate Electronic and manual

9 Submit customs declaration Electronic

10 Arrange transport for loading Manual

11 Transfer to LCS Manual

12 Parking of goods Manual

13 Customs clearance Electronic and manual

14 Send the goods to importer’s warehouse Manual

15 Pay Electronic

Indian Export of Fabrics to Bangladesh, 2010

Absence of international conventions on trade & transport facilitation

Convention Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka

Convention onRoad Traffic (1968)

No Yes No Yes No No Yes Yes

Convention on Road Signs and Signals (1968)

No No No Yes No No Yes No

Customs Convention on Temporary Importation of Commercial Road Vehicles (1956)

Yes No No No No No No No

Customs Convention on Containers (1972)

No No No No No No No No

Convention on International Transport of Goods under Cover of TIR Carnets (1975)

Yes No No No No No No No

Convention on the Contract for the International Carriage of Goods by Road (1956)

No No No No No No No No

Convention on the Harmonization of Frontier Controls of Goods (1982)

No No No No No No No No

Demonstration run of container train between ECO and SAARC?

Source: Drawn based on information of ECO & UNESCAP

SAARC connectivity – mixed progress• Negotiation of Regional Transport and Transit Agreement, and a Regional Motor

Vehicle’s Agreement (ongoing).• SAARC Expert Group finalized the text of the Regional Agreement on Railways in August

2011. • Launch of feasibility studies of pilot projects:

– Birganj and Kathmandu (160 km) completed in October 2008 – negotiation ongoing• Kathmandu-Birgunj-Kolkata/Haldia – rail corridor

– Birgunj-Katihar-Singhabad-Rohanpur-Chittagong with links to Jogbani, Biratnagar and Agartala – rail corridor

– Agartala-Akhaura-Chittagong – rail corridor• Construction between Agartala and Akhaura (14 km) is about to commence.

– Phuntsholing and Hashimara – road corridor– Ferry link - between Colombo and Tuticorin (started already) and Colombo and Cochin – Karachi – Mumbai ferry link– Air link - Malé-New Delhi and Islamabad-New Delhi; – Establishment of modern border crossing facility at Phuntsholing. – Indian ocean cargo cooperation

• On-going projects: – Feasibility study for India - Bhutan rail link– Construction of railway line from Jiribam-Tupui (near to Imphal, India) has commenced– Construction of Kaladan Multimodal Transport project has started in December 2010– Railway infrastructure improvement projects in Sri Lanka– Intermodal connectivity – Air Services Agreement (single ticket to fly between South Asian nations)

• Demonstration run of container train involving Bangladesh, India and Nepal is being planned

Progress in modernizing and opening of land customs stations

• India’s Integrated Check Post (ICPs) project – Attari already started working since April 2012 [spread over 118 acres, a passenger terminal 9,600 s.m; cargo terminal 4,700 s.m; separate import and export warehouses, 10,000 s.m., parking space 50,000 s.m., etc.)

• Opening of Banglabandha – Fulbari land port for trade

• Opening of border haat in Baliamari (Bangladesh) –Kalaichar (India), and fFew more border haats (e.g. between India and Bangladesh) coming up

Progress in Customs cooperation• SAARC Agreement on Mutual Administrative Assistance in

Customs Matter, signed in 2005• The Seventh Meeting of the Sub-Group on Customs Cooperation

(11-12 February 2010) made following recommendations with a view to facilitating trade in goods in SAARC. – Building infrastructure including roads and railways networks near the

LCSs.– Customs clearance procedures at LCSs need to be smoothened;– Customs Administrations may consider a system of customs facilitation in

which export documentation of one Member State could be considered by the Customs Administration in the importing country for the purposes of assessing and clearing the consignment.

– Need for developing an Electronic Data Exchange System within the region, including at LCSs, with a view to ensure better facilitation of trade in goods among the SAARC countries including improved compliance.

– SAARC Secretariat to develop a regional/sub-regional project to set up automated customs clearing mechanism at the designated LCSs.

– Harmonisation of 8-digit tariff lines is needed, and in order to make this task easier, all Member States would further provide upto only 100 8-digit tariff lines with a trade potential of 75% (in value terms) in the region.

Recent development in Customs cooperation• Declaration of the Fifteenth Meeting of the Committee on

Economic Cooperation - Maldives, 15-16 July 2012 (Source: SAARC Secretariat Press Release July 24, 2012)– The Meeting recognised delays in customs clearance

procedures and decided that henceforth electronic copies of specimen signatures and seals of officials authorised to sign SAFTA Certificates of Origin may also be accepted in addition to sending the original copies of such documents in order to save time and to ensure that the consignments are not held up at the customs border points.

• India – Pak customs cooperation agreement, mutual recognition of standards and redressal of trade disputes

Encouraging progress in transit• Common transit is must for a common market• All SAARC countries have in-principally agreed to regional

transit. • Motor Vehicle Agreement is being negotiated.• SAARC Expert Group finalized the text of the Regional

Agreement on Railways in August 2011. • Sub-regional transit has been agreed between India, Nepal,

Bhutan and Bangladesh. – Bilateral document between India and Bangladesh signed

during the state visit of Indian PM to Bangladesh in September 2011 to facilitate overland transit traffic between Bangladesh and India

– Demonstration run of container train between Bangladesh, India and Nepal is getting ready.

• Huge trade opportunities if Afghanistan – Pakistan Transit Agreement covers Western South Asia and Central Asia

Subregional transit better option to open regional transit

AGH

PAK IND

BHUNPL

BDG

Source: Author

ESAS

WSAS

SOUTH ASIA

Proposed transit

ESAS: Eastern South Asia Subregion WSAS: Western South Asia Subregion

Linking South Asia with neighbours• Uzbekistan – Afghanistan railway line (a section till

Mazar-i-Sharif already opened)• Highway in Afghanistan, aided by India• TAPI gas pipeline• China – Nepal highway and railway • India – Nepal railway project, India – Bhutan railway

project, etc.• India – Myanmar – Thailand trilateral highway (a

section already in operation)• India – ASEAN ocean shipping network • India – ASEAN open sky• Others

Three important developments on regional connectivity (Strong Impact on South Asian

Trade Flow)1. Transit for traffic between India, Bangladesh,

Nepal, and Bhutan.2. Integrated check posts (ICP) in Attari in Punjab,

Moreh in Manipur, Petrapole in West Bengal, and Raxul in Bihar.

3. Pakistan – ECO and India – ASEAN connectivity projects, particularly Mekong – India Economic Corridor (MIEC) and BIMSTEC Trilateral Highway

Policy options • Overland connectivity is not a distant dream, it would

increase transport services trade– Strengthen Afghanistan - India – Pakistan road, rail and air

link – South Asia Economic corridor!

• More direct links among ports. Few ports are directly connected – No direct call of container shipping

• Open sky???…. few airports are directly connected. – New routes for cargo + passengers – Complete ASA, & implement with all South Asian countries

Fostering South Asia transport services: Enabling environment

1. Accession to the International Conventions2. Multimodal Transport and Transit3. Strengthening and Harmonizing Rules, Regulations,

and Standards4. Demonstration Projects5. Financing Cross-border Transport Projects6. Strengthening Coordination among Countries and

Stakeholders7. Closer Cooperation on Security8. Strengthening Regional Cooperation

Policy recommendations

Simplification of domestic regulation

• Domestic regulations perform the role of tariffs in regulating services.

• Domestic regulations need to be disciplined to help the growth of the services sector and exports– Also need to retain those essential domestic

regulations which support the growth of the sector itself.

Liberalisation of transport services

• Liberalization of trade in transportation services is must. Reforms should be undertaken to strengthen domestic transport services.

• Liberalisation would encourage:– FDI flows,– integration national economies more effectively – reduce income and other disparities within and among

countries.

Improvement in transport infrastructure

• Countries are characterized by high restrictions in services trade as well as dearth of infrastructure.

• Services trade facilitation indicators focus on both infrastructural barriers and regulated market structure.

• Infrastructure development would facilitate trade and income• Convert land-locked into land-linked country• Regional infrastructure and transit more important for LLDCs. • Regional infrastructure fund important to support the

development transport infrastructure• Border infrastructure development• More involvement of private sector and PPP initiative.

Some specific recommendations1. Strengthen cross-border infrastructure (move from road corridors to

economic corridors)2. Accept subregional and subsequently regional transit3. Fast track lane and priority of goods in transit to cross the border4. Set-up SAARC Single Window (Customs) (pilot run of authorized economic

operator, AEO; and mutual recognition agreement)5. Simplification and harmonization of trade procedures, more particularly at

border. 6. Introduce modern corridor management techniques in selected corridors7. Promote multimodal transportation (with rail transit, regular container train

in the region)8. Improve the efficiency of border corridors (both side of border improvement

in ICP project in parallel)9. Liberalize visa regime10. Open sky in South Asia11. Effective project coordinationamong government stakeholders12. Stronger institution (public-private interface) for trade facilitation is urgently

needed. 13. Regional study for SAARC Master Plan of Connectivity should be done.14. Set-up SAARC connectivity coordination committee to coordinate the Master

Plan and its feasibility.

Thank you