Scheduling transport commitments under a GATS-like agreement: Tips and pitfalls Pierre Latrille, WTO SADC Transport Services Liberalization Forum, Durban, September 2012

outline Scheduling commitments in general Scheduling air transport commitments Scheduling commitments for auxiliary services to all modes of transport Scheduling rail transport commitments Scheduling road transport commitments Scheduling maritime transport commitments

Scheduling in general the tools : the TIS, the negotiating and scheduling guidelines, the W120, the CPC the Man: Markus The concepts : the modes, the positive listing of sectors, the negative listing of restrictions, and its five degrees of liberty, the type of restrictions, the mfn effect, the minimum effect, the articulation with mfn exemptions, the quasi- irreversibility

Trade in Services through four modes of supply Mode of SupplyDescriptionExample Mode 1Cross-border trade A domestic operator transports goods or people from its home base to a destination in another country Mode 2Consumption abroad Nationals or companies from one country use transport services within another country to move people or merchandise within that territory Mode 3Commercial 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) Mode 4Temporary 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

sectors Defined by default by w120/CPC (except for air transport and to certain extent maritime) It is not a “take it or leave it”: - You can subdivide them -You can use your own definitions … at your own risks there are market access and national treatment only in the sectors explicitly listed But there is an across the board mfn obligation regardless of whether the sector has ben listed or not, except if an mfn exemption is listed

Negative listing of restrictions Be careful : a forgotten restriction is a dead restriction Five degrees of liberty: (at modal level) – Unbound (or no commitments) – None – Status quo – Roll back (partial dismantling of an existing restriction) – “margin”(keeping some regulatory freedom, allow for more favourable treatment in practice, but reversible and mfn) – + a 6th, anecdotal, case Unbound* (due to lack of technical feasibility)

restrictions MARKET ACCESS (MA) (Article XVI) 6 types of restrictions: (a) Number of service suppliers (b) Value of transactions or assets (c) Total number of operations or output quantity (d) Total number of natural persons (e) Type of legal entity (f) Foreign capital participation

Restrictions-MA Discriminatory and non discriminatory measures ( save for foreign participation always discriminatory ) Quantitative limitations can be expressed in absolute numerical terms, percentage or case by case authorization basis (“ economic needs test”),If so specify the criteria

Restrictions: NT, add. Com. NATIONAL TREATMENT (NT) (Article XVII) -any discrimination of foreign services and service suppliers with regard to all measures affecting the supply of a service -De jure and de facto -- no list, a test -An overlap with market access(MA+NT=schdMA) -TIPS: sequential approach, SL92 list of examples of NTrestrictions - -Additional commitments : - the cherry on the pie -TIP : S/CSC/W34

An example of schedule :

Relationship with actual policy Commitments guarantee minimum levels of Market Access and National Treatment Members remain free to offer better conditions (subject to MFN principle) Commitments may be upgraded at any time to reflect improved conditions

Relationship with MFN Type of non MFN treatment If commitmentsIf no commitments Less than MFN (or MFN minus e.g. reciprocity) Impossible as commitments are MFN Possible if MFN exemption listed More than MFN (MFN+ or preferential ) Possible if MFN exemption listed

Air transport TIS lists explicitly only three auxiliary services : aircraft repair and maintenance/ computer reservation services /selling and marketing of air transport services (art 3.3.b) No definitions in TIS : GATS’ definitions mutatis mutandis ? A controversy among GATS’ Members on the coverage of ground handling and airport services Some FTA cover aerial work/specialty air services

GATS air annex definitions "Aircraft repair and maintenance services" mean such activities when undertaken on an aircraft or a part thereof while it is withdrawn from service and do not include so-called line maintenance. "Selling and marketing of air transport services" mean opportunities for the air carrier concerned to sell and market freely its air transport services including all aspects of marketing such as market research, advertising and distribution. These activities do not include the pricing of air transport services nor the applicable conditions. "Computer reservation system (CRS) services" mean services provided by computerised systems that contain information about air carriers' schedules, availability, fares and fare rules, through which reservations can be made or tickets may be issued

Air transport Overall liberal regimes for the 3 TIS listed sectors Modes 2 and 3 key for maintenance Possible problem if code of conduct for CRS displays Scheduling commitments on ground handling and airport services is a good way to “lock in” internal reform on multiplicity of providers ( GH) and concessions or private management (airports) Possible mfn exemption need for gh because of GH clause in bilateral air services agreement No other scheduling difficulties

Services auxiliary to all modes of transport H.Services auxiliary to all modes of transport a.Cargo-handling services741 b.Storage and warehouse services742 c.Freight transport agency services748 d.Other749

Services auxiliary to all modes of transport cargo handling: definition 741Cargo handling services Container handling services Cargo handling services provided for freight in special containers. Included are services of freight terminal facilities, on a fee or contract basis, for all modes of transport, including stevedoring services (i.e. the loading, unloading and discharging of vessels' containerized freight, at ports) Other cargo handling services Cargo handling services provided for non ‑ containerized freight or for passenger baggage. Included are services of freight terminal facilities, on a fee or contract basis, for all modes of transport, including stevedoring services (i.e. the loading, unloading and discharging of vessels' non ‑ containerized freight, at ports), and cargo handling services incidental to freight transport, not elsewhere classified. Also included are baggage handling services at airports, and at bus, rail or highway vehicle terminals. Exclusions: Other supporting and auxiliary transport services linked to a specific mode of transport are classified in subclass for railway transport, subclass for road transport, subclass for water transport and subclass for air transport

Services auxiliary to all modes of transport cargo handling TIPS: - Subdivisions make little sense modally (except container versus bulk in shipping) - Does not exist as a third party activity for road, rail, pipelines - Raises a scope question for air - Key for maritime where it is addressed in an integrated manner in one of the two scheduling options ( maritime model schedule) -GATS-type disciplines are ill-suited for concessions but can prevent the re-creation of a monopoly - Largely internal policy questions

Services auxiliary to all modes of transport storage and warehousing :definitions 742Storage and warehousing services Storage services of frozen or refrigerated goods Storage and warehousing services of frozen or refrigerated goods, including perishable food products Bulk storage services of liquids or gases Bulk storage and warehousing services of liquids and gases Other storage or warehousing services Storage and warehousing services of other goods, including: cotton, grain, wool, tobacco, other farm products, and other household goods.

Services auxiliary to all modes of transport storage and warehousing :tips the only true intermodal services -beware of overlap with the maritime model schedule ( container depots and stations) subdivisions while technically sound do not make sense from a market access regulatory point of view Generally liberal regimes, worth binding

Services auxiliary to all mode of transport freight agency and others: definitions Freight transport agency services Freight brokerage services, freight forwarding services (primarily transport organization or arrangement services on behalf of the shipper or consignee), ship and aircraft space brokerage services, and freight consolidation and break ‑ bulk services Other supporting and auxiliary transport services Freight brokerage services; bill auditing and freight rate information services; transportation document preparation services; packing and crating and unpacking and de ‑ crating services; freight inspection, weighing and sampling services; and freight receiving and acceptance services (including local pick ‑ up and delivery).

Services auxiliary to all mode of transport freight agency and others: tips the two definitions overlap (freight brokerage), are difficult to distinguish and do not correspond to professional categories Potential overlap with the maritime model schedule (maritime agency,maritime freight forwarding ) commit on both or on none and delineate well the borderline with maritime (eg by committing maritime auxiliary services separately worth binding as perfect target for protectionism

Rail transport: classification E.Rail Transport Services a.Passenger transportation7111 b.Freight transportation7112 c.Pushing and towing services7113 d.Maintenance and repair of rail transport equipment8868** e.Supporting services for rail transport services 743

Rail transport : definitions DIVISION 71 LAND TRANSPORT SERVICES 711Transport services by railway 7111Passenger transportation 71111Interurban passenger transportation Interurban passenger transportation provided by railway, regardless of the distance covered and the class used Urban and suburban passenger transportation Urban and suburban passenger transportation by railway. Urban traffic is defined as traffic the origin and destination of which are within the borders of the same urban unit; and suburban commuter traffic as traffic within a greater metropolitan area including contiguous cities. Included here are services provided by urban mass transit railways (underground or elevated railway). TIP : beware it covers also urban and surbuban transport, make clear your intention for both subsectors ( different regulators and management modes) and if need be exclude one of them

Rail transport : definitions 7112Freight transportation 71121Transportation of frozen or refrigerated goods Transportation by railway of frozen or refrigerated goods, e.g./perishable food products, in specially refrigerated cars Tranportation of bulk liquids or gases Transportation by railway of bulk liquids or gases in special tank cars. These cars may also be refrigerated Transportation of containerized freight Transportation by railway of individual articles and packages assembled and shipped in specially constructed shipping containers designed for ease of handling in transport Mail transportation Transportation of mail by railway on account of national and foreign postal authorities Transportation of other freight Transportation by railway of freight, not elsewhere classified. TIPS : -mail is also covered by postal and courier, exclude it, -subdivision do not make sense from a market access regulatory point of view

Rail transport: definitions Pushing or towing services Railway pushing or towing services, on a fee or contract basis, e.g. the movement of wagons between terminal yards, industrial sidings, etc Repair services of other transport equipment on fee or contract basis Supporting services for railway transport Railway passenger terminal services, except cargo handling, and other supporting services for railway transport, not elsewhere classified. Exclusions: Shunting services are classified in subclass (Pushing or towing services). Railway freight cargo handling services are classified in subclass (Container handling services), if for containerized freight, and in (Other cargo handling services), if for non ‑ containerized freight or passenger baggage. TIPS: some non–integrated activity in those three areas, in general liberal regime, the few Gats rail transport commitments are essentially made in those sectors

Rail transport liberalization: lack of GATS type tools GATS type disciplines are ill-suited for concessions but can prevent the re-creation of a monopoly WTO Members have not developed access to use of disciplines to cover vertical separation and allocation of paths. Some Members (e.g. Australia) have tried to do it on their own for freight transport in their GATS offer:

Australia: market access offer for rail freight transport 1) None 2) None 3) Below track: Most rail-track networks in Australia are government owned although much is leased to private operators. There are no restrictions on the right to establish new networks but access to public land may not be guaranteed. Above track (rail transport services (such as trains) that operate over the rail-track infrastructure): none except that access to rail infrastructure is allocated under pro-competitive principles for safety, efficiency and the long term interests of users. 4) Unbound except as indicated in the horizontal section.

Road transport : preliminary warnings transit quotas not covered GATS/TIS only deal with import -not export-on your territory of road transport (Mode 1) consumption abroad of road transport (Mode2) establishment (mode 3)and movement of drivers (mode 4) for the GATS the truck and the driver are separable anyhow drivers are seldom covered by mode 4 commitments if at all While officially in the scope of the GATS international road transport is largely devoid of commitments and full of MFN exemptions. Notions such as freedom or cabotage do not sit well with the “modal “ framework of the GATS

Road transport: classification F.Road Transport Services a.Passenger transportation b.Freight transportation7123 c.Rental of commercial vehicles with operator 7124 d.Maintenance and repair of road transport equipment e.Supporting services for road transport services744

Road transport :definitions 7121 Other scheduled passenger transportation Urban and suburban regular transportation Urban and suburban special transportation Interurban regular transportation Interurban special transportation Other scheduled passenger transportation 7122 Other non-scheduled passenger transportation Taxi services Rental services of passenger cars with Rental services of buses and coaches wit operator Passenger transportation by man- or animal-drawn vehicles Other non-scheduled passenger transport n.e.c. TIP :this definition encompasses all non rail passenger land transport including urban transport among which taxis. Is that what you want to liberalize ? If so examine the situation in each sub-subsector one by one, and schedule accordingly if not exclude the sub-subsectors that you do not want to liberalize.

Road transport :definitions 7123 Freight transportation Transportation of frozen or refrigerated goods Transportation of bulk liquids or gases Transportation of containerized freight Transportation of furniture Mail transportation Freight transportation by man- or animal-drawn vehicles Transportation of other freight TIPS : mail is already covered by postal and courier,exclude it, the subdivisions do not really make sense form a regulatory point of view, what matters is mode1, mode 3 and cabotage

Road transport : definitions Rental services of commercial freight vehicles Maintenance and repair services of motor vehicles Repair services n.e.c. of motor vehicles, trailers and semi-trailers, on a fee or contract basis 744Supporting services for road transport Bus station services Passenger terminal services in connection with urban, suburban and interurban bus passenger transport, on a fee or contract basis. Exclusion: Baggage and freight handling services are classified in subclass (Other cargo handling services) Highway, bridge and tunnel operation services Services of fixed facilities operation, such as roads, tunnels, bridges and causeways, on a fee or contract basis. Exclusion: Services of vehicle parking facilities are classified in subclass (Parking services) Parking services Parking services provided by car parks, parking lots and parking garages, whether or not roofed Other supporting services for road transport Commercial road vehicle maintenance and minor repair services, on a fee or contract basis, and other supporting services for road transport, not elsewhere classified. TIPS : the regimes of those services is largely liberal in practice, the item” bridges, highways and tunnel operations “ is often neglected where as it is key : it covers tolls and concessionned highways in particular, a commitment here is a real guarantee for a BOT /PPP investor

Now on to the meat : road freight preliminary warnings transit quotas not covered GATS/TIS only deal with import -not export-on your territory of road transport (Mode 1) consumption abroad of road transport (Mode 2) establishment (mode 3)and movement of drivers (mode 4) for the GATS the truck and the driver are separable anyhow drivers are seldom covered by mode 4 commitments if at all While officially in the scope of the GATS international road transport is largely devoid of commitments and full of MFN exemptions. Notions such as freedoms or cabotage do not sit well with the “modal “ framework of the GATS

Tackling road freight commitments A truly implemented a bilateral agreement containing cargo sharing (or other bilateral key) is GATS /TIS inconsistent and can only be preserved through an unbound in modes 1 and 2 and an MFN exemption. Even if the cargo sharing is not implemented, if third party operations are prohibited,the agreement remain MFN inconsistent and can only be preserved at the same conditions the same goes if some third party operator (either from SADC or not) are admitted but not all SADC members. Better put the same entry in modes 1 and 2 as the meaning of mode 2 is unclear MFN exemptions do not have to be legally symmetrical but they have better be in practice (else one of the bilateral share is open to third parties) MFN exemptions can be used for future agreements if the GATS rules for listing MFN exemptions apply (unlike SL 92 they are not cross-referred by the TIS scheduling guidelines

An example of road transport MFN exemption: EU Sector or subsectorDescription of measure indicating its inconsistency with Article II Countries to which the measure applies Intended durationConditions creating the need for the exemption Road transport - passenger and freight Provisions in existing or future agreements on international road haulage (including combined transport - road/rail) and passenger transport, concluded between the EC or their Member States and third countries, which: -reserve or limit the provision of a transport service between the contracting parties or across the territory of the contracting parties to vehicles registered in each contracting party; -provide for tax exemption for such vehicles. Switzerland, States in Central, Eastern and South-Eastern Europe and all Members of the Commonwealth of Independent States, Albania, Turkey, Lebanon, Israel, Syria, Jordan, Egypt, Tunisia, Algeria, Morocco, Cyprus, Malta, Iran, Afghanistan, Iraq, Kuwait IndefiniteThe need for exemption is linked to the regional characteristics of the cross-border provision of road transport services

Road transport :mode 1 policy choices Ready for a “big bang” intra-SADC (i.e. no implementation of quotas,and no prohibitions of operation for other SADC partners on the bilateral relation ? commitments :1)2) none, no MFN exemption Want to keep implemented quantitative restrictions and/or prohibition of all or some third party operators? com:1)2) unbound, MFN exemption want a progressive liberalization. Problems start….

Mode 1 progressive liberalization phase out erga omnes ? no problem Preferential phase out with some SADC members? Seems possible :TIS article 4.2 but MFN exceptions still apparently required art asymmetry principle Art 16.4 Anyhow don’t you have already liberalized de facto? Quota are not implemented, nor is apparently third country rule Joking of course, well half…

Road transport :other modes Don’t underestimate mode 3, liberal regime, job and equipment provider do not repeat the errors of the WTO, Address modes 1 and 4 simultaneously when it comes to trucking mode 2 will forever remain a mystery so be consistent with 1

PL Maritime minimum40 Two overlapping classifications - Rental and Leasing with crew - Maintenance and repair - Pushing and towing - Supporting services for water transport by sea-going vessels* - Access to/use of ports services - Container depot station - [Multimodal transport] - [Access to/use of multimodal transport] - Custom clearance - Maritime agency services (?) - International maritime transport (freight and passenger) - Cargo handling - Storage and warehousing - Freight forwarding - Freight brokerage, bill auditing… (749) CPC MMS * port and waterway operation, pilotage, navigation, aid, salvage, cleaning... A H

A.Maritime Transport Services a.Passenger transportation7211 b.Freight transportation7212 c.Rental of vessels with crew7213 d.Maintenance and repair of vessels8868** e.Pushing and towing services 7214 f.Supporting services for maritime transport745** maritime :CPC scheduling

Maritime CPC scheduling 11. TRANSPORT SERVICE A. Maritime Transport Services a. Passenger transportation Passenger transportation by ferries Passenger transportation by ocean ‑ going or coastal water ferries, including hydrofoils and hovercraft, on a scheduled or non ‑ scheduled basis Other passenger transportation Passenger transportation on the high seas and on coastal waters by seagoing vessels, on a scheduled or non ‑ scheduled basis, regardless of the class of service, and including passenger accompanying baggage transportation Tips. Beware of cabotage, think international ferries and cruises

Maritime : cpc scheduling b. Freight transportation Transportation of frozen or refrigerated goods Transportation by seagoing vessels of frozen or refrigerated goods in specially refrigerated compartments Transportation of bulk liquids or gases Transportation by seagoing vessels of bulk liquids or gases in special tankers. These vessels may also be refrigerated Transportation of containerized freight Transportation by seagoing vessels of individual articles and packages assembled and shipped in specially constructed shipping containers designed for ease of handling in transport Transportation of other freight Transportation by seagoing vessels of freight not elsewhere classified. Tips : categories only partially relevant (liner /bulk and other is better ), beware cabotage is included by default

Maritime CPC scheduling c. Rental of vessels with crew Rental services of seagoing vessels with operator d. Maintenance and repair of vessels 8868** e. Pushing and towing services Towing and pushing services Towing and pushing services on the high seas and on coastal waters. These services are generally provided by vessels which do not themselves carry freight or passengers. Included here are towing services of oil rigs, floating cranes, dredging vessels, buoys, and of hulls and incomplete vessels, on a fee or contract basis. Towing services for distressed seagoing vessels are also included. Tips : beware cabotage included in towing pushing, beware also of monopoly/ concession granted

Maritime CPC scheduling f. Supporting services for maritime transport 745** Port and waterway operation services (excl. cargo handling) Port operation services such as wharves, docks, piers, quays and other marine terminal facilities related services, including passenger terminal services in connection with marine transportation, on a fee or contract basis, and operating and maintenance services of boat, barge and ship canals, of canalized rivers and of other artificial inland waterways. Also included here are services of locks, boat lifts, weirs, sluices and towing services on canals other than by tugboat, e.g. by tractors or locomotives on the towpath Pilotage and berthing services Navigation aid services Vessel salvage and refloating services Other supporting services for water transport (Cleaning, disinfecting, fumigating, vermin control and similar services, on board docked or anchored vessel,… icebreaking, vessel registration, vessel laying ‑ up and storage services, etc. TIPS: meaning of “**” unknown; mostly public or rmonopolized activities, no requests, unwise to commit save specific reasons

Maritime model schedule The inadequacies of classical classification have led to the elaboration of the model schedule, based on four “pillars”: -international maritime transport -maritime auxiliary services -access to /use of port services -multimodal transport

Maritime model schedule Pillar 1: International transport suggested to be defined … -without cabotage -according to CPC or ad hoc definitions (including or not multimodal) -distinguishing liner from bulk in mode 1 -distinguishing the establishment of registered company operating the national flag from other forms of commercialpresence (mode 3) -distinguishing the situation of the ship’s crew from the one of on shore key personnel (mode 4)

Maritime model schedule

Pillar 2: maritime auxiliary services 6 services with proper definitions: – cargo handling ( excluding dockers) – storage and warehousing – custom clearance services – container station and depot services – maritime agency – freight forwarding services

Maritime model schedule Pillar 3: access/use of port services - shipowner seen as users of port services -the aim is not to liberalize the port services concerned… -but to ensure that are available on reasonable and non discriminatory terms and conditions -hence the additional commitments tool

Maritime model schedule 9 services covered: -pilotage -towing and the tug assistance -provisioning fuelling and watering -garbage collecting and ballast waste disposal -port captain services -navigation aids -shore based operational services essential to ship operations including communications water and electrical supplies -emergencies repair facilities -[anchorage berth and berthing services]

Maritime model schedule

Pillar 4: multimodal transport -two options: A) maximal option: liberalize the activity itself B) minimal option: liberalize the access to and use of multimodal transport

Maritime model schedule

Transport scheduling Basically that’s it Thank your for your attention