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SADC negotiations on trade in transport services. Workshop for 22 nd TNF Services Johannesburg 5 August 2014. Outline. State of play in negotiations Classification issues Issues arising from sector study Summary of requests and offers Issues related to TCM Protocol
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SADC negotiations on trade in transport services Workshop for 22nd TNF Services Johannesburg 5 August 2014
Outline • State of play in negotiations • Classification issues • Issues arising from sector study • Summary of requests and offers • Issues related to TCM Protocol • How will the negotiations make a difference to regional trade • Decisions required • Key questions for breakout groups
State of play with FS negotiations • Sector forum – 2012 • Requests from 5 Member States • Initial offers from 8 Member States (of which 2 recently received) • No revised offers as yet in response to bilateral negotiations
Bilateral transport agreements • The agreements: • restrict the carriage of bilateral trade to carriers from the two countries • prohibit cabotage • provide that the regulatory authorities of the two parties shall share information concerning traffic development • define the types of permits that may be issued, namely 14 days, short term (3 months), and long term (12 months) • state that cargo rates and charges shall be determined by the market • provide for the establishment of a joint route management group to determine transport needs on a route, among other things
Transport issues • Current levels of liberalization • Largely liberalized – road freight transport, maritime port management, auxiliary services (freight forwarding; cargo handling; storage and warehousing) • Protected – passenger services; rail • Air services – maintenance and repair; sales and marketing; CRS; groundhandling • Limited opportunities – inland waterways, pipelines • Logistics?
Transport issues • Cabotage • TCM Protocol recognizes bilateralism in transport, but how does this square with regional integration? • Transport costs increased because of empty truck movements due to route and cabotage restrictions • Bilateral transport agreements • Accommodated by TCM • How to reflect within TIS negotiations
Non-TIS issues • Trade facilitation • One of the most pressing problems - the effects of customs and revenue authority border requirements and procedures • Transport regulations and standards • Vehicle standards, e.g. axle weights • Drivers’ regulations, e.g. drivers’ hours, work permits
Business wish list for transport • Inter-state recognition • Charges, levies, taxes • Overloading control • Infrastructure • Border procedures and documents • Bribery and corruption • Market access • Drivers • Road safety • Fitness of vehicles • Varied regulations between countries
Issues raised in sector study • Road: A commitment from all Member States to deregulate the supply of road transport services and focus on the achievement and promotion of the quality of transport services to meet the objectives of Chapter 6 of the TCM Protocol • this could include a commitment to review the relevance of restrictive measures such as the “third country rule”, which the study observes that the RISDP was intended to review in its “Facilitation of Road Transport Market Liberalisation Project”, which aimed to develop a multilateral road transport agreement to replace the myriad of bilateral agreements; • Rail: The need to develop a model for regional railways that will create separate entities for track supply and maintenance, safety regulator, economic regulator and train operators in order to create conditions to permit competition
Issues raised in sector study • Ports and maritime: The need for institutional restructuring of most ports in the region to create a system of single port authorities with local landlord jurisdiction under a national ports authority and regulator • Air: A commitment and action plan to implement the Yamoussoukro Decision on air transport
Trade provisions in TCM Protocol Road transport • “Member States shall facilitate the unimpeded flow of goods and passengers between and across their respective territories by promoting the development of a strong and competitive commercial road transport industry which provides effective transport services to consumers.” (Article 5.1, TCM Protocol) • “Member States shall progressively introduce measures to liberalize their market access policies in respect of the cross-border carriage of goods [following three Phases of liberalization] [albeit guided by the need to ensure reciprocal benefits …].” (Article 5.3, TCM Protocol)
Trade provisions in TCM Protocol Rail transport • “Member States shall facilitate the provision of a seamless, efficient, predictable, cost-effective, safe and environmentally-friendly railway service which is responsive to market needs and provides access to major centres of population and economic activity.” (Article 7.1, TCM Protocol) Maritime and inland waterways • “Member States shall promote the economic and social development of the region by developing and implementing harmonized international and regional transport policies in respect of the high seas and inland waterways.” (Article 8.1, TCM Protocol) • Article 8 includes such provisions as “promoting the role of the private sector in providing cargo handling services” and “the progressive elimination of restrictions, if any, on cabotage by ships registered in a Member State”
Trade provisions in TCM Protocol Air services • Article 9 includes the provision that Member States agree to “the gradual liberalization of intra-regional air transport markets for the SADC airlines”.
Key questions for breakout groups Transport costs • How significant an issue for the SADC region are transport costs? • What can we learn from the study on competitive markets in transport services to help the negotiations on transport services? Offers • With eight offers covering transport services, how far have requests have been met? • How far would these offers make a real difference to regional trade and regional integration in transport services? What is still needed?
Key questions for breakout groups Sector study recommendations • To what extent do Member States believe the sector recommendations are appropriate to the objectives of regional integration in transport services? • How could the current negotiations support progress in these issues? • What scope is there for reflecting liberalization objectives in a reference paper of pro-competitive regulatory principles for the transport sector?
