1. Trade Facilitation – Impossible without Facilitating Logistics Contribution by the International Road Transport Union (IRU) Peter Krausz, Head, Goods Transport and Facilitation 2008 WTO Public Forum Geneva, 25 September 2008 Contribution by the International Road Transport Union (IRU) Peter Krausz, Head, Goods Transport and Facilitation 2008 WTO Public Forum Geneva, 25 September 2008

2. Contents 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

3. Importance of Road Transport

4. 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

5. Transport Volume (tkm) – GDP Development in EU25, 1995=100% Eurostat, 2008

6. Road Transport Share (tkm) in EU25 Eurostat, 2008

7. © International Road Transport Union (IRU) 2008 Page 7 Road transport tonnage distances in Europe

8. © International Road Transport Union (IRU) 2008 Page 8

9. © International Road Transport Union (IRU) 2008 Page 9 Evolution of IRU Membership Updated January 2008 Created 1948 8 Founder States: Created 1948 8 Founder States: BelgiumDenmarkFranceNetherlands NorwaySwedenUKSwitzerland 2008 180 Members 72 Countries

10. Cost of Barriers

11. © International Road Transport Union (IRU) 2008Page 11 Cost of Barriers Source: Hague Consulting Group, 1998 * Includes lost opportunities

12. © International Road Transport Union (IRU) 2008 Page 12 IndicatorValue Average number of TIR carnets issued per year 2923481 Minimum number of border crossings in the TIR system per year 8770443 Total waiting time, hour per year, for TIR traffic 8770443 Value of an hour lost per truck, USD per hour 50 Total lost value per year, TIR traffic, USD 438522188 Total lost value** 1998-2005, TIR traffic, USD 3508177500 * EU25 External, EU4, CIS & Balkan Borders, 1998-2005 **Direct costs can double through losses to producers and traders, including lost opportunities due to longer and unreliable transport time, thus: total USD 7.0 billion. Source: IRU 2006 Border Waiting Time Costs Money!

13. © International Road Transport Union (IRU) 2008 Page 13 IRU Border Waiting Times Observatory

14. © International Road Transport Union (IRU) 2008 Page 14 IRU Border Waiting Times Observatory

15. © International Road Transport Union (IRU) 2008 Page 15 IRU Border Waiting Times Observatory

16. © International Road Transport Union (IRU) 2008 Page 16

17. © International Road Transport Union (IRU) 2008 Page 17

18. IRU Border Waiting Times Observatory

20. UN Conventions

21. TIR System

22. 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 - Visa Facilitate procedure Article 2 - Visa Facilitate procedure

23. 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 UN Border Control Harmonisation Convention 1982 & Annex 8

24. 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 UN Border Control Harmonisation Convention 1982 & Annex 8

25. 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 Convention 1982 & Annex 8

26. GATT Article V and Road Transport

27. © International Road Transport Union (IRU) 2008 Page 27 General comments facilitation of intl road transport has been neglected facilitation of intl road transport has been neglected trade facilitation - impossible without facilitated transport (cargo, vehicle & driver) trade facilitation - impossible without facilitated transport (cargo, vehicle & driver) GATT Article V - best legal instrument providing for the Freedom of Transit GATT Article V - best legal instrument providing for the Freedom of Transit Doha failure deals a blow to trade & transport facilitation Doha failure deals a blow to trade & transport facilitation The IRUs Views on GATT Article V on the Freedom of Transit

28. © International Road Transport Union (IRU) 2008 Page 28 do not to substitute, simply complement do not to substitute, simply complement do not edit, reduce or summarise freely, neither change order of items do not edit, reduce or summarise freely, neither change order of items do not overwrite multilateral conventions (like on customs transit) do not overwrite multilateral conventions (like on customs transit) do submit regional transit agreements to multilateral conventions do submit regional transit agreements to multilateral conventions do agree on the new WTO trade facilitation tool separately do agree on the new WTO trade facilitation tool separately The IRUs Views on GATT Article V on the Freedom of Transit Consequences for new Agreement

29. © International Road Transport Union (IRU) 2008 Page 29 Definition of Transit covers the most recent changes in transport technology and techniques covers the most recent changes in transport technology and techniques but does not cover the domestic transport legs ( exportation and importation) of the international transit of goods but does not cover the domestic transport legs ( exportation and importation) of the international transit of goods The IRUs Views on GATT Article V on the Freedom of Transit

30. © International Road Transport Union (IRU) 2008 Page 30 no need for new definitions, only precisions no need for new definitions, only precisions distinguish transit of goods and/or of means of transport from customs transit systems distinguish transit of goods and/or of means of transport from customs transit systems complement Article V to apply mutatis mutandis to domestic transport legs of international transit of goods and in specific transit situations (e.g. ports traffic) complement Article V to apply mutatis mutandis to domestic transport legs of international transit of goods and in specific transit situations (e.g. ports traffic) Consequences for the Definition of Transit The IRUs Views on GATT Article V on the Freedom of Transit

31. © International Road Transport Union (IRU) 2008 Page 31 Freedom of Transit Article V, a cornerstone of the GATT– too often disregarded Article V, a cornerstone of the GATT– too often disregarded non-discrimination - has suffered many infringements non-discrimination - has suffered many infringements MFN treatment - has been subject to too many flagrant infractions MFN treatment - has been subject to too many flagrant infractions Article V - for how long a Sleeping Beauty? Article V - for how long a Sleeping Beauty? The IRUs Views on GATT Article V on the Freedom of Transit

32. © International Road Transport Union (IRU) 2008 Page 32 reinforce the freedom of transit reinforce the freedom of transit no discrimination on any grounds no discrimination on any grounds no quantitative limitations of means of transport no quantitative limitations of means of transport prescribed routes or escort only exceptionally prescribed routes or escort only exceptionally NT or MFN: whichever is more favourable for international transit NT or MFN: whichever is more favourable for international transit The IRUs Views on GATT Article V on the Freedom of Transit Consequences for theFreedom of Transit Consequences for the Freedom of Transit

33. © International Road Transport Union (IRU) 2008 Page 33 Most Convenient Routes, no Delays & no Restrictions shippers and transport operators must be free to choose the most convenient itinerary for transit shippers and transport operators must be free to choose the most convenient itinerary for transit obviously limited to using appropriate customs houses obviously limited to using appropriate customs houses transit traffic of goods and/or means of transport must not be subject to unnecessary delays or restrictions transit traffic of goods and/or means of transport must not be subject to unnecessary delays or restrictions The IRUs Views on GATT Article V on the Freedom of Transit

34. © International Road Transport Union (IRU) 2008 Page 34 routes must always remain most convenient routes must always remain most convenient new control technology or joint controls at borders do not produce desired effects without access lanes and routine controls / physical inspections being separated new control technology or joint controls at borders do not produce desired effects without access lanes and routine controls / physical inspections being separated Consequences for theMost Convenient Routes, No delays & No Restrictions Consequences for the Most Convenient Routes, No delays & No Restrictions The IRUs Views on GATT Article V on the Freedom of Transit

35. © International Road Transport Union (IRU) 2008 Page 35 Duties and Charges; Regulations and Formalities – principles to preserve transit must be exempt from customs duties and other charges except for services rendered – to reinforce transit must be exempt from customs duties and other charges except for services rendered – to reinforce drivers and operators are very often victims of rent-seeking practices as well as procedural failures at borders (leading to unjustified customs claims) drivers and operators are very often victims of rent-seeking practices as well as procedural failures at borders (leading to unjustified customs claims) The IRUs Views on GATT Article V on the Freedom of Transit

36. © International Road Transport Union (IRU) 2008 Page 36 General 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

37. © International Road Transport Union (IRU) 2008 Page 37