HIGH‐LEVEL MEETING ON STRENGTHENING INTER‐ISLAND  SHIPPING AND LOGISTICS IN THE PACIFIC ISLAND COUNTRIES

HIGH‐LEVEL MEETING ON STRENGTHENING INTER‐ISLAND SHIPPING AND LOGISTICS IN THE PACIFIC ISLAND COUNTRIES
23‐25 July 2013
Session IV – Sustainable Maritime Transport
Trade Facilitation Issues in the Pacific
(current engagement)
Shiu Raj
Director (Economic Governance Programme)
Pacific Islands Forum Secretariat
Outline of the Presentation
1. Core Trade Facilitation Issues
2. Trade Facilitation in the Inter‐Island shipping context
3. Trade in services commitments – Transport sector
4. Possible options for sustainable maritime transport
Key challenges
• Low trade volumes
• Mostly one way trade – both for international and domestic: empty containers!
• Port facilities provide limitations: size of vessels, type of loading/unloading gear, etc.
• The tyranny of long distances – geography
• Small populations, dispersed
Trade Facilitation ‐ Definitions
• A number of definitions provided by International Organisations
¾ WTO and OECD, refer to trade facilitation as : “the simplification and harmonisation of international trade procedures including the activities, practices and formalities involved in collecting presenting, communicating and processing data and other information required for the movement of goods in international trade”
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The shortfall of above definition is it does not address other measures such as Non Trade Barriers (NTBs)
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Definition of TF applied within the context of Regional Trade Agreements (RTAs) refers mainly to the scope/objectives of measures covered in the
Agreements.
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Trade Facilitation is referred to in PICTA, PACER, PACER Plus
Trade Facilitation – WTO context
• The WTOs definition of TF includes activities such as transport, payments, and electronic facilities as well as issues related to customs and border crossing. This include documentation requirements; official procedures; automation and use of information technology; transparency; predictability and consistency.
• TF is covered by the relevant WTO articles as follows: GATT Articles V, VII, VIII, and X and Agreements on Customs Valuation, Import Licensing, Pre‐shipment inspection, Rules of Origin, TBT and the application of SPS measures
• Singapore Ministerial Conference (1996) mandated only GATT Articles V, VIII and X be considered for multilateral negotiations
Trade Facilitation – GATT
• Article V relates to the freedom of transit of goods and transportation vessels across territories
• Article VIII relates to the fees and formalities related to the imports and exports of goods
• Article X relates to the publication and administration of trade
regulation (measures that ensure transparency)
• A number of cases have been brought to the WTO DSB that involved either customs procedures or technical regulations and fall under GATT Art VII, VIII, and X or agreements on licensing procedures, TBT, SPS, RoOs or customs valuation.
Trade Facilitation Agreement
• WTO Members agreed to consider Trade Facilitation
Agreement (TFA) in 1996, but negotiations did not proceed
until 2011
• TFA is a possible candidate for Bali package (Ninth
Ministerial Conference – December 2013)
• FIC - WTO Members conducted their Trade facilitation
Needs assessment in April 2013, which identified:
• (i) Measures in the TF Agreement they will be implementing upon
entry into force of TFA;
• (ii) those measures requiring time or policy space; and
• (iii) Measures requiring technical and financial assistances from the
Donor Partners –called Category C
TRADE FACILITATION AND LOGISTICS
COST OF SHIPPING
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The TFA takes into account logistic cost that contribute
towards the high shipping cost among the island countries.
These logistic issues undermine PICs from integrating into
the multilateral trading system, and benefiting from the
International trade and commerce.
The TFA aims to address the Administrative and customs
related procedure cost associated with the clearance, release
and transit of goods.
Although all TF measures are important, our focus has been
on measures in the TFA that constitute logistics cost affecting
importation and exportation of goods at the sea ports.
MEASURES ADDRESSING
LOGISTIC COSTS
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Publication of Information
Conformity tests – standards
Pre-arrival processing of goods
Electronic means of sending documentations
Release of goods prior to final determination of the customs
duties, taxes, fees and charges
• Cooperation among Border Agencies, and also amongst
Ports, Customs, and Quarantine Authorities
• Customs Procedures
• Single Window - documentation and data requirement for
importation and exportation using single entry point
Key Trade Facilitation Issues
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Transport costs
Transport options
Standards and Conformance/Quality
Consistency in supply/Volumes
Sanitary and Phyto‐sanitary requirements
Access to finance/research
Market Access & Marketing
Trade in Services commitments
WTO Commitments: Fiji, PNG, Samoa, S.I., Tonga, Vanuatu
Pacific Island Countries Trade Agreement (PICTA) Trade in Services Protocol: commitments focused on business services, tourism, transport, financial services, communications, education, construction, health, environmental, distribution and recreational services. Transport Services Sector under PICTA TISPO
Transportation is an identified priority sector. Commitments under PICTA‐TISPO reflect the region’s desire for transport sector liberalisation to promote intra‐regional trade, and social and economic development.
• Maritime transport continues to be an important facilitator of economic growth, but is often hampered by gaps in service and infrastructure. Being island nations, heavy reliance on maritime transport for passenger and freight transportation. • The evaluation of the Schedule of Commitments highlights the prioritization of transport sector openness in the Pacific to some degree.
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Maritime Transport Services commitments
(under PICTA TIS Protocol)
1. Low level of commitment for both market access and national treatment are made for Pushing and Towing Services. Low level of
commitment in national treatment with medium level of commitment in market access for Supporting Maritime Transport Services is offered. 2. Medium level of commitment for both market access and national treatment is currently offered for Passenger Transport (International Only), Rental of Vessels with Crew, and Maintenance and Repair Services
3. High level of commitment is currently seen only for Freight Transport Services. It must be noted that offers to liberalize inland waterway transportation is omitted by all FICs, with the exception of Kiribati
Air Services (under PIASA, and PICTA TISPO)
1. The stand‐alone Pacific Islands Air Services Agreement (PIASA) addresses air transport liberalisation, and is the region’s effort to curtail the challenges of high fares, inconsistent schedules, aircraft leasing, safety, and commercial opportunities in the Pacific. 2. Commitments made to PICTA TIS complement PIASA arrangements, and carry the potential to deliver significant improvements in areas such as code sharing, pilot and crew training, and fleet maintenance and repair. Transport Sector Liberalisation – Potential Benefits
•Previously inaccessible routes and areas can be serviced
•Lower unit cost of transporting freight due to competition
•Discontinuance of unprofitable routes
•Increase in new international/ domestic routes
•Investment/construction of new ports, roads, access points, inter‐modal hubs, harbours, terminals, storage facilities/warehouses, employment
•Increase in local goods & services trading activities
•Increased ability to service rural population with medicines, medical services, food, etc
•Increase in local goods & services trading activities
•Closure of uncompetitive businesses
•Rise in cultural integration of regional nationalities
What has been done already?
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Forum Principles on Regional Transport Services
Pacific Forum Line
Feeder Services – with signed declarations
Regional Framework for Transport
Some national Transport Frameworks
Shipping Commissions
Transport Sector assessments/independent evaluations
What are the lessons and how do we replicate good results?
Possible Solutions
• What have we done with free/subsidised vessels and planes? Is there a lesson?
• Privatisation with strong regulatory mechanisms? Routes, Standards, Safety, etc.
• Can we survive without subsidy?
• Innovation in managing fuel costs – biofuel, wind/solar energy, • Port facilities and administration – capacity and efficiency
Possible Solutions
• Trade volumes: create trade in bulky products – liquids (water, oil, beer, etc.), copra, coconuts, etc
• Bulk breaking/Cargo Consolidation
• Replace diesel with coconut oil?
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• Pacific Aid for Trade Strategy has identified ‘trade‐related infrastructure’ as a key priority! Thank You