Cargo Preference and Restrictions Applying to Specific Trades Name : Jae-sun Lee

1. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 Cargo Preference and Restrictions Applying to Specific Trades Name: Jae-sun Lee Organisation: Ministry of Oceans and Fisheries Economy: Republic of Korea

2. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 BACKGROUND (1/3) • 2005 (Washington) • Maritime Initiative(Facilitation of International Shipping Project(2000-2004)) • 1994 (Bogor) • Leaders’ Declaration – Bogor Goal • 2007 (Adelaide) • TMM5 Joint Ministerial Statement • Free and open trade and investment in the Asia-Pacific region • To consider timetable for progressive removal of regulatory constraints; • To identify the remaining areas requiring attention by member economies to meet the Bogor Goals; • To proceed the roadmap work by developing a specific action plan • Policy Item 4: Cargo Preference • Policy Item 5: Restrictions Applying to Specific Trades • 1995 (Osaka) • Leaders’ Declaration – Osaka Action Agenda • Trade and investment liberalization • Trade and Investment Facilitation

3. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 BACKGROUND (2/3) • 2008 (Manila) • 30th TPT-WG • 2008 (Lima) • 31th TPT-WG • 2009 (Manila) • TMM6 Joint Ministerial Statement • Korea took on the role of champion for the Policy Item 5, “Restrictions Applying to Specific Trades” • Korea additionally took on the role of champion for the Policy Item 4, “Cargo Preference” and indicated that it will include both policy items in a single project proposal to be submitted for consideration by the MEG at TPT-WG32 • Liberalization and facilitation of transport services • 2011 (Australia) • 34th TPT-WG • 2008 (Lima) • Leaders’ Declaration • Cargo Preference and Restrictions Applying to Specific Trades • To modify and resubmit proposal in initial stage • Welcome progress made by member economies towards the Bogor Goals of free and open trade and investment in the Asia-Pacific region

4. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 BACKGROUND (3/3) • 2012 (Thailand) • 35th TPT-WG • 2013 (Vietnam) • 37thTPT-WG • 19 June 2013 • Contract was made • The modified proposal has been approved • Presented full proposal • Service Provider : KMI • Project Overseer : MOF OBJECTIVES • To help undertake the two APEC Policy Items, CargoPreference (Policy Item 4) and Restrictions Applying to Specific Trades (Policy Item 5) with a view to achieve the Bogor Goals

5. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 CURRENT STATUS • With liberalization and privatization, cargo preferencemeasures have been significantly reduced in recent times • Restrictions applying to the specific trades have also been greatly reduced over the last two decades • This mitigation may find its reason in the emphasis of the necessity to increase national shipping competitiveness and to ensure transport security of strategic cargoes, notwithstanding the fact that the core of shipping liberalization lies in a shipper’s right to choose a carrier

6. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 Cases : Cargo Preference

7. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 Examples : Specific Trades • OEM Trade • Plant Trade • Consignment Export Trade • Trades related to food safety, animal health, planet health • - Mad cow disease • - Mexican restrictions on Thai milled rice • (to avoid the introduction of pests)

8. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 EXPECTED END-OF-PROJECT TRAGET • The consultant study will include findings of existing cargo preference measures and restrictions applying to the specific trades • Arguments for and against retaining restrictive practices(benefit, disadvantage, adequacy, fairness, etc) • Characteristics and contributory effect of commercial barriers on trades • The MEG would consider, from these findings, a need to carry out a further study to analyze and develop a comprehensive policy approach that would best reflect the concerns of the APEC member economies

9. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 BENEFICIARIES • The understanding of current regulatory and market conditions would benefitfor each APEC member economy • - Governments and maritime policy administrator • - Shipping companies • - Port agencies and enterprises • - Shippers (e.g. importers and exporters) • - APEC Economies

10. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 EXPECTED PROJECT PROGRESS • Propose the extension of the project to June 2014

11. Phase 1 • Information gathering Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 METHODOLOGIES (1/2) • Phase 1:Information gathering • During this phase the consultant will • (a) collect information on restrictions applied to the specific trades and cargo preference that existed previously and still exist within the APEC region by literature review, survey, and (if necessary) direct interviews with governments, shipping and freight industries, and etc. • (b) conduct field surveys to investigate current status associated with cargo preference and specific trades. • - China(Beijing), Philippine(Manila) as co-sponsoring economies • - Singapore, Indonesia(Jakarta) as activity cargo trading economies • Phase 2 • Fact finding & Verification • Reporting

12. Phase 1 • Information gathering Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 METHODOLOGIES (2/2) • Phase 2:Fact finding and Verification, Report • During the second phase, the consultant will liaise with shipping lines or operators during their research and analysis to cross-check the current status • Also the government agencies of APEC economies responsible for maritime transport and competition policy would provide their views and feedback to be incorporated into the finding and evaluation • Meetings, questionnaires, interviews and etc would be widely made in order to best reflect the existing restrictions and cargo preference for the expected stakeholders • Phase 2 • Fact finding & Verification • Reporting

13. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 FURTHER STUDY • The MEG would consider, from these findings, a need to carry out a further study to analyze and develop a comprehensive policy approach for the APEC member economies • During the further study, the consultant will conduct an analysis on advantages and disadvantages of the existing restrictions and cargo preference • The analysis will also include references to the international maritime regulations such as found in WTO and case studies of EU’s maritime integration policy and ASEAN’s single shipping market efforts

14. Thirty Eight APEC Transportation Working Group Meeting, Bali, Indonesia 1 – 5 July 2013 THANK YOU FOR YOUR ATTENTION