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SADC negotiations on trade in transport SADC negotiations on trade in transport

SADC negotiations on trade in transport - PowerPoint Presentation

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SADC negotiations on trade in transport - PPT Presentation

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 ID: 774043

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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 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

Africa’s transport corridors

SADC’s transport corridors

Logistics Performance Index 2012 Country Year LPI Rank LPI Score Customs Infrastruc-ture Inter-national shipments Logistics compe-tence Tracking & tracing Timeliness Singapore 2012 1 4.13 4.10 4.15 3.99 4.07 4.07 4.39 Hong Kong, China 2012 2 4.12 3.97 4.12 4.18 4.08 4.09 4.28 Finland 2012 3 4.05 3.98 4.12 3.85 4.14 4.14 4.10 Germany 2012 4 4.03 3.87 4.26 3.67 4.09 4.05 4.32 Netherlands 2012 5 4.02 3.85 4.15 3.86 4.05 4.12 4.15 Denmark 2012 6 4.02 3.93 4.07 3.70 4.14 4.10 4.21 Belgium 2012 7 3.98 3.85 4.12 3.73 3.98 4.05 4.20 Japan 2012 8 3.93 3.72 4.11 3.61 3.97 4.03 4.21 United States 2012 9 3.93 3.67 4.14 3.56 3.96 4.11 4.21 United Kingdom 2012 10 3.90 3.73 3.95 3.63 3.93 4.00 4.19

Logistics Performance Index 2012 Country Year LPI Rank LPI Score Customs Infrastruc-ture Inter-national shipments Logistics compe-tence Tracking & tracing Timeliness South Africa 2012 23 3.67 3.35 3.79 3.50 3.56 3.83 4.03 Malawi 2012 73 2.81 2.51 2.78 3.01 2.85 2.56 3.09 Madagascar 2012 84 2.72 2.80 2.40 2.40 2.80 2.80 3.13 Tanzania 2012 88 2.65 2.17 2.41 2.91 2.64 2.77 2.97 Namibia 2012 89 2.65 2.73 2.72 2.49 2.65 2.85 2.52 Zimbabwe 2012 103 2.55 2.31 2.20 2.67 2.27 2.50 3.27 Angola 2012 138 2.28 2.33 2.48 2.26 2.00 2.00 2.59 Lesotho 2012 142 2.24 2.00 2.12 2.12 2.42 1.99 2.73 Congo, Dem. Rep. 2012 143 2.21 2.10 1.96 2.23 2.17 2.35 2.38

Bilateral transport agreements in SADC COUNTRIES Angola Botswana Lesotho Malawi Mozambique Namibia South Africa Swaziland Tanzania Zambia Zimbabwe Angola  -                     Botswana    - MOU     MOU-C MOU-C /MOU MOU      BRT Lesotho   MOU  -       MOU MOU       Malawi        -  BP   BRT   C     Mozambique       BP  -   BG/BP BRT  BG/BP   BRT Namibia   MOU-C        - MOU-C     BRT   South Africa   MOU-C /MOU MOU BRT BG/BP MOU-C  - MOU   BRT BRT Swaziland   MOU MOU   BRT   MOU  -       Tanzania        C  BG/BP        - BRT   Zambia           BRT BRT   BRT  -   Zimbabwe   BRT     BRT   BRT        -

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

Classification Sun-sector Scope Maritime Ports and shipping Inland waterways Air Excludes services related to traffic rights – generally understood to cover sales and marketing, computer reservation services (CRS) and aircraft maintenance and repair services) What about ground handling? Space Rail Road Pipeline Auxiliary services E.g. freight forwarding, storage and warehousing, cargo handling)

Transport or logistics?

Assessment of requests   DRC MUS SWZ SYC ZAF Maritime NAM: All sub-sectors MOZ, SYC, ZAF: All sub-sectors (Mode 3) SYC: Maritime auxiliary services   All MS: All sub-sectors, especially in Mode 3 AGO, BWA, DRC, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors Inland waterways NAM: All sub-sectors       AGO, BWA, DRC, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors Air NAM: All sub-sectors SYC, ZAF: Sales and marketing, CRS, aircraft maintenance and repair, ground handling, airport management (Mode 3)     AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors Space         AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors

Assessment of requests   DRC MUS SWZ SYC ZAF Rail NAM: All sub-sectors       AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors Road NAM: All sub-sectors SWZ: Passenger and freight; rental of commercial vehicles with driver; support services   AGO, BWA, MOZ, MUS, MWI, NAM, SYC, TZA, ZMB, ZWE: All sub-sectors LSO: Rental of commercial vehicles with driver; support services   AGO, BWA, DRC, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors LSO: Passenger and freight (Modes 1 and 2); maintenance and repair (Mode 1); Rental of commercial vehicles with driver; support services

Assessment of requests   DRC MUS SWZ SYC ZAF Pipeline NAM: All sub-sectors       AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: All sub-sectors Auxiliary NAM, SWZ: Cargo handling; storage and warehousing; freight transport agency services   AGO, BWA, MOZ, MUS, MWI, NAM, SYC, TZA, ZMB, ZWE: All sub-sectors LSO, ZAF: Cargo handling; storage and warehousing; freight transport agency services   AGO, BWA, DRC, LSO, MOZ, MUS, MWI, NAM, SYC, SWZ, TZA, ZMB, ZWE: Cargo handling; storage and warehousing; freight transport agency services

Assessment of offers DRC MWI MUS SYC SWZ TZA ZAF ZMB Maritime Wide sectoral coverage – Mode 2 only Full commitment Passenger and freight transport (excluding cabotage ), rental of vessels, maintenance and repair Maintenance and repair, vessel salvaging and refloating (49% foreign equity limitation in Mode 3) X Mainly none Unbound except for Mode 2 X Inland waterways Wide sectoral coverage – Mode 2 only Full commitment X X X X Unbound except for Mode 2 X Air Wide sectoral coverage – Mode 2 only X Broad commitments in three sub-sectors – unbound in Mode 3 for maintenance and repair X X Passenger and freight transportation; also includes rental, maintenance and repair and support services Unbound in passenger and freight except for Mode 2; None except foreign equity limit in ancillary air services X

Assessment of offers DRC MWI MUS SYC SWZ TZA ZAF ZMB Space X X X X X X Unbound except for Mode 2 X Rail Wide sectoral coverage – Mode 2 only Broad commitment – passenger and freight unbound in Mode 3 X X X Passenger, freight and maintenance and repair - mainly none Unbound except for Mode 2 X Road Wide sectoral coverage – Mode 2 only Broad commitment – passenger and freight unbound in Mode 1 X X Passenger and freight (Mode 2 only); full commitment for other sub-sectors Passenger and freight - mainly none Unbound except for Mode 2 and Mode 3 – mainly None Freight transport only, Mode 2 (full commitment); Mode 3 (incorporation in Zambia + nationality requirements)

Assessment of offers DRC MWI MUS SYC SWZ TZA ZAF ZMB Pipeline X Full commitment X X X X Unbound except for Mode 2 X Auxiliary services Wide sectoral coverage – Mode 2 only Cargo handling, storage and warehousing, freight transport agency services Storage and warehousing, freight transport agency services and other services X Cargo handling, storage and warehousing, freight transport agency services X Unbound except for Mode 2 X

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?