Trade Facilitation – Impossible Without Facilitating Logistics Simon Bennett Secretary, International Chamber of Shipping WTO Forum, Geneva, 25 September 2008

Presentation outline Presentation outline Introduction to international shipping - carrier of 90% world trade Obstacles to efficiency of shipping The need for successful conclusion to WTO facilitation negotiations Introduction to international shipping - carrier of 90% world trade Obstacles to efficiency of shipping The need for successful conclusion to WTO facilitation negotiations

What is ICS? What is ICS? Principal international trade association for shipowners Representing shipping at international regulatory level – especially International Maritime Organization Also all other inter-governmental bodies impacting on shipping e.g. World Customs Organization, OECD, United Nations Principal international trade association for shipowners Representing shipping at international regulatory level – especially International Maritime Organization Also all other inter-governmental bodies impacting on shipping e.g. World Customs Organization, OECD, United Nations

ICS members are national shipowners associations Passenger ships

ICS represents all ship types and trades and 75% of world merchant fleet Bulk carriers Tankers Passenger ships Container ships

International shipping – lifeblood of world trade 90% world trade carried by sea Without shipping, intercontinental trade, bulk transport of raw materials and affordable food would not be possible Low cost and efficient transport has permitted shift of production to Asia, raising global living standards 90% world trade carried by sea Without shipping, intercontinental trade, bulk transport of raw materials and affordable food would not be possible Low cost and efficient transport has permitted shift of production to Asia, raising global living standards

One tonne iron ore Typical shipping cost Australia - Europe $US 20

One gallon of petrol at the pump Typical shipping cost Arab Gulf - US (crude) $US 0.015

Bottle of whisky Typical shipping cost UK - China 20 cents

Trade efficiency needs liberalised shipping markets Preservation of OECD maritime principles- codification in WTO agreement on maritime services Shipowners work closely with Consultative Shipping Group (CSG) of maritime governments Need for traditional maritime nations to set example Preservation of OECD maritime principles- codification in WTO agreement on maritime services Shipowners work closely with Consultative Shipping Group (CSG) of maritime governments Need for traditional maritime nations to set example

WTO facilitation negotiations Successful outcome will promote international standards and simplification of customs procedures If other parts of Doha round do not succeed, means should be found of preserving progress on facilitation Successful outcome will promote international standards and simplification of customs procedures If other parts of Doha round do not succeed, means should be found of preserving progress on facilitation

Important obstacles to the efficiency of shipping Regional regulation Security – protecting the supply chain vs. keeping world trade moving Can infrastructure keep pace with increasing trade volumes? Regional regulation Security – protecting the supply chain vs. keeping world trade moving Can infrastructure keep pace with increasing trade volumes?

Regional regulation Industry mantra – global regulation for a global industry Shipping relies on international regulatory framework, not least through International Maritime Organization (IMO) Importance of level playing field, fair competition Industry mantra – global regulation for a global industry Shipping relies on international regulatory framework, not least through International Maritime Organization (IMO) Importance of level playing field, fair competition

Unilateral rules create market distortions, reducing efficiency of maritime transport and trade New pressures with environmental rules – different standards in different ports means chaos Major challenge -Post Kyoto CO 2 regime, UNFCCC principle of common but differentiated responsibility New pressures with environmental rules – different standards in different ports means chaos Major challenge -Post Kyoto CO 2 regime, UNFCCC principle of common but differentiated responsibility

Security versus facilitation Balance between legitimate security concerns, and practicalities of maintaining efficient trade, shifted since 9/11 Focus of debate at World Customs Organization (WCO SAFE framework) Erosion of IMO Facilitation Convention standards Balance between legitimate security concerns, and practicalities of maintaining efficient trade, shifted since 9/11 Focus of debate at World Customs Organization (WCO SAFE framework) Erosion of IMO Facilitation Convention standards

Challenges to facilitation US Law for 100% container scanning (not feasible, unfair on trading partners) Implementation of EU cargo security rules (potential IT chaos) Proposed China cargo security regime Restrictions on movement (and shore leave) for seafarers US Law for 100% container scanning (not feasible, unfair on trading partners) Implementation of EU cargo security rules (potential IT chaos) Proposed China cargo security regime Restrictions on movement (and shore leave) for seafarers

Keeping pace with the growth of maritime trade Source: Fearnley's Review

Port infrastructure and hinterland connections under serious strain Not keeping pace with maritime growth, requires big investment Serious congestion e.g. US West Coast, North West Europe, may impact on economies as a whole New demand for improved efficiency throughout supply chain to help reduce CO 2 Not keeping pace with maritime growth, requires big investment Serious congestion e.g. US West Coast, North West Europe, may impact on economies as a whole New demand for improved efficiency throughout supply chain to help reduce CO 2

Integrated transport policies Need for co-ordination between policy makers to reconcile conflicts between trade and environment, e.g. port expansion and multimodal connections Threat to wider economy needs to be understood. Maritime transport out of sight, out of mind – needs often neglected by policy makers Need for co-ordination between policy makers to reconcile conflicts between trade and environment, e.g. port expansion and multimodal connections Threat to wider economy needs to be understood. Maritime transport out of sight, out of mind – needs often neglected by policy makers

The shipping industry has much to gain from WTO Services negotiations – codifying existing free practices Trade facilitation agreement – locking in customs best practice and Reinforcing facilitation work carried out in other bodies – WCO, IMO FAL Promotion of e-commerce and single window concept Services negotiations – codifying existing free practices Trade facilitation agreement – locking in customs best practice and Reinforcing facilitation work carried out in other bodies – WCO, IMO FAL Promotion of e-commerce and single window concept

Conclusion Proper consultation with trade means better legislation and results WTO facilitation efforts can promote international standards – vital for global shipping industry and efficient world trade Proper consultation with trade means better legislation and results WTO facilitation efforts can promote international standards – vital for global shipping industry and efficient world trade

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