Issues facing Road Freight Transport Private Sector & Regulators in Trade in Services Negotiations

Outline Introduction Trade in Services and Trade facilitation (difference) SADC Protocol on TiS and Transport and infrastructure (linkage and possible area of synergy) Players in road freight transportation Private sector participation in negotiations and regulator negotiators Key issues towards liberalization (for private sector and regulators) – Policy issues – Offensive and Defensive interest

Introduction Trade in Services means the supply services through (M1) Cross border supply: service moves from country A to country B (M2) Consumption abroad: a national of country A consumes a service in country B (M3) Commercial Presence: Service provider from country A establishes a business in country B (M4) Presence of Natural Person: A natural person from country A provides a service in country B. Trade in services under the SADC Protocol exclude services under governmental authority, and services procured by the government.

Two interlinked agendas… Trade Facilitation agenda “Brick and mortar” Infrastructure issues – Roads infrastructure development, weight bridge calibration, etc. Customs-related issues – transit management stems/ bonds and guarantees – Red tape/documentation (standardization of systems and requirements, ) Other standards and requirements – Axle-load issues, vehicle standards & dimensions – Road safety requirements: abnormal loads, 3 rd party MV insurance, etc. Trade policy: quota restriction administration Core Trade in Services agenda Issues relating to discrimination ( i.e. locals are favored over foreigners ) – Cabotage restrictions – Recognition – Multiple Road user charges Issues relating to investment ( establishing businesses abroad) Issues related to driver’s permits-movement of persons Many of the issues are overlapping !

Key factor for Competence in Road freight transport Efficient customs clearance process; Quality of transport related infrastructure; Alternatives/options for shipments; Competence and quality of logistics services; Ability to track and trace consignments; and Timely delivery of consignment

Participation in the Liberalization Negotiations Insufficient and ad hoc consultation Private sector and Regulator involvement is necessary & vital particularly in negotiating lists of commitment Collaboration among Policy Makers, Regulator, and Private sector Identify key players and establish consultation mechanism & compose negotiating team Familiarize with the Protocol & Guidelines, identify offensive and defensive interests Offers and requests should reflect your interests, Prepare fall back positions

Key Players in Road freight services Private sector and Civil society – Transport operators, – Distributors, – Freight forwarders, – Shippers – Transport associations and NGOs dealing with Transport Consumers associations Government – Transport Regulators /National Road Authorities – Customs and border agencies, local governments, – Other Agencies i.e. weights/measurements/standards bureaus, traffic police, etc.

Consultation Mechanism and Composition of Negotiating Team Consultation Mechanism – Dynamic, all-inclusive and adhere to national decision making structure – Involve all stakeholder (Policy-Regulator-Private sector) – Maintain constant and regular feedback Minimum Negotiating Team – Chief Negotiator (s) – Sector Ministry, Regulator (s) and Legal advisor – Private Sector (national) – Regional organizations with observer stutas?

Key issues from SADC Protocol on Trade in Services Provides for: – Most-Favored –Nation Treatment: unconditionally and immediately extend other MS any favorable treatment offered to 3 rd party – National treatment: non discriminatory treatment among operators (local- foreign) unless otherwise scheduled – Mutual recognition of requirements, qualifications, licences and other regulations met/obtained in another MS through an Agreement (to be negotiated) – Domestic Regulation: develop disciplines on MS measures relating to qualification requirements and procedures, technical standards, and licensing requirements and procedures allow for effective market access Calls for liberalization through schedules of commitment – Starting with six priority sectors : communication, energy related, finance, construction, tourism and transportation) Calls for effective regulation and transparency – through prompt publication of measures applicable in services sectors, and by responding to request to share information on the same

Key Issues from Protocol on Transport, Communication and Metrology Horizontal Commitment on Road Transport Market liberalization to facilitate movement of goods and passengers through development of commercial road transport industry which provides effective transport services – International regulatory mechanism – Harmonization Traffic regulation Transport infrastructure Cross border procedures etc. Institutional frameworks Funding mechanisms (infrastructure development)

Identify offensive interests (Private Sector) Target markets: – Which Country? – What type of service/ customers? Market access: what market entry restriction do road transport operators face in other MS including: – Registration and licensing requirements, – Limitations on number of operators?, – Joint venture requirement?

Offensive interests (ctd.) Are there discriminatory measure in the country of interest that are based on nationality? -> e.g. different road user fees/charges, allocation of routes, etc. what are desirable regulatory changes in the target market for better market access ? -> – Legislation (registration and licensing) – Standard documentation

Defensive interest Are there any measures favoring local suppliers in the home market: – do they need to be maintained? – For which purpose and how long? – Does benefit of maintaining these measures outweigh the costs to consumers (higher prices) plus the maintenance of similar restrictions by other SADC partners? What is the domestic suppliers’ capacity development policy? Empowerment policy? Balanced sequencing of regulatory reforms and market liberalization

Regulators What national and regional legal frameworks are in place? Are they coherent? What are the market demands? Are existing operators efficient and effective? what reforms are required to match MD? What measures in place to ensure fair competition? Is there capacity to manage the reforms and competition? How to manage abuse of rights by operators? What is the desired level of control?

Key Policy Issues Policy What is the national trade in services agenda? policy? objective? What are the sector policy objectives? What is the state of play? What are the services development initiatives? What are the cross-cutting issues? Are they coordinate and coherent? Is there shared understanding across sectors? Sensitivity of the sector and the balance of consumer protection and broad-based access, local operator protection Vs. efficiency and effectiveness What other commitment that has been undertaken in the sectors under other agreements? What are options for achieving balanced benefits and simplicity in administering implementation of these agreements?

Key Regional Preparation for TiS Negotiations Conduct sectorial studies: build on existing (identify restrictions and state of play) – Made available in Services website Carryout sectorial consultations (national & regional level) Devise mechanism of dealing with horizontal and cross-cutting issues (MRAs, transparency, subsidies, movement of NP etc.)

Conclusion Liberalization is desirable, thus – Capitalize on commitment under the two Protocols – Political backup is necessary to facilitate implementation – Private sector advocacy for liberalization is important Complementary efforts are necessary such as – Accelerated harmonization of regulatory frameworks – Infrastructure development – Trade facilitation commitment and related implementation

Thank You By: Viola Sawere Trade Policy Advisor SADC/GFA Trade in Services Project