12^th September 2012.

FESARTA’s working link with SADC was normally through the Infrastructure and Services Directorate and a good relationship was established.

This Forum on Transport Liberalization was organized by the SADC Trade in Services Directorate, and was done to ensure the programmes of I&S in the transport liberalization field, were in sync with those of TiS.

The USAID Southern African Trade Hub and GIS were the funders of the event and funded FESARTA’s travel and accommodation.

There was a Transport, Communications and Meteorology Protocol (TCM), a Trade Protocol (T) and a new Trade in Services Protocol (TiS).

Whilst the TCM and TiS Protocols were different, their recommendations for liberalization were not in conflict with each other.

There was discussion on the confusion in coverage of the three Protocols.

FESARTA recommended that the Protocols focused on the following coverage:

• TCM    transport operations (vehicles, insurances, safety) and transport infrastructure
• T          goods (import-export, duties, insurances, VAT etc)
• TiS       doing business in other countries

The official response was that one Protocol would focus on a particular issue and the other Protocols could well back it up, rather than duplicate it.

The TIS Protocol covered 11 services, including transport.

Its main objective was to liberalize intra-regional trade and required countries to offer services to foreign nationals on the same favourable conditions as to its own nationals.

In transport, it covered cabotage and the 3^rd country rule, though not identified as such in those terms.

Cabotage was a serious concern, though definition of the term was not always clear.  (In the road transport industry, cabotage meant the movement of goods by vehicles registered in country A, between two points in country B.)

Third country rule could be described as restricting the movement of goods between two countries, to the vehicles registered in those two countries.  Or, preventing a vehicle registered in country A from picking them up in country B and offloading them in country C.

Some observations from the WTO consultant:

• In the majority of OECD (Organization for Economic Co-operation and Development) countries, the governments generally did not regulate the road transport industry.  Companies needed to be registered with their governments and that was all.  The conclusion drawn, from many publications, was that prices subsequently went down and quality went up.
• Passenger transport should not be liberalized.
• The movement of goods was categorized into four modes:

1. Doing cross-border transport
2. Using the services of a foreign country (consumption), eg repairing vehicles
3. Setting up a business abroad (establishment)
4. Drivers from one country working in another country

Modes 1 and 4 should be regulated together and not separately.

The road/rail debate was very active and some points were noted:

In favour of road:

• Internationally, market forces determined that road was preferable
• The global trend of “just-in-time” called for road
• Road provided a “door-to-door” service

In favour of rail:

• Some government decision-makers had interests in road transport companies and so put country resources into road
• Road transport may not have been paying its fair share of road maintenance and upgrading
• There was serious congestion on some roads

Approximately 100000 cross-border road transport permits were issued every year.

The road transport consultant ascertained that up to 85% of the content of bi-lateral agreements was not being implemented.

He recommended that road transport should not be regulated by “quantity” (road transport permits) as was the current status, but by “quality” (standards of safety and professionalism).

He proposed a multi-lateral agreement that was based on quality.

This meeting was not intended to find solutions to issues, but rather to enlighten delegates on the three Protocols and how they would address transport liberalization.

The process of liberalizing transport was being carried out by SADC and meetings had already been held.  This process would continue.

Barney Curtis.