16th MEETING OF THE COMCEC TRANSPORT AND

COMMUNICATIONS WORKING GROUP

Virtual Meeting

31 May 2021

“Mitigation Strategies for Transport Service Providers During and After COVID-19”

Alper ÖZELChairman of Executive Committee

INTERNATIONAL TRANSPORTERS ASSOCIATION

Transit Barriers Impede International Trade

Andreas KOPP; the World Bank

Long border waiting times cause serious economic losses across the world

a 1–day delay in transit reduces trade by 1%

a 10 per cent increase in transport costs leads to a 20 per cent reduction intrade volumes on average

High transport costs reduces competitiveness in two ways:

* Net domestic export prices are reduced* Gross imported input prices are higher

David L. Hummels & Georg Schaur, 2013. "Time as a Trade Barrier,"American Economic Review

each day in transit is equivalent to an ad-valorem tariff of 0.6 to 2.3percent

INTERNATIONAL TRANSPORTERS ASSOCIATION

EU RESPONSE TO BORDER RESTRICTIONS DURING THE COVID-19 PANDEMIC CRISIS:

GREEN LANES, TO KEEP BORDERS OPEN !

TURKEY’S ROAD TRANSPORT ROUTES TO CENTRAL ASIA

TRANSİT BOTTLENECKS ALONG THE CASPIAN CORRIDOR

Ro-Ro Lines Single TripSingle Trip cost

SingleTrip Nm/$

Round Trip $

Round Trip Nm/$

Pendik-Trieste 1190 Nm 1.267 $ 1,31 $ 2.513 $ 1,30 $

Mersin - Trieste 1353 Nm 1.292 $ 1,46 $ 2.562 $ 1,45 $

Yalova - Trieste 1200 Nm 1.267 $ 1,31 $ 2.513 $ 1,31 $

Yalova - Sete 1500 Nm 1.719 $ 1,03 $ 3.407 $ 1,21 $

Zonguldak -Ilıchevsk

300 Nm 500 $ 1,66 $ 1.000 $ 1,66 $

Baku – Aktau 296 Nm 1.200 $ 4,05 $ 1.800 $ 3,04 $

Limited Ro-Ro capacity : High prices

HIGH COSTS OF TRANSIT ALONG CASPIAN CORRIDOR

Bottlenecks on transit for Turkish road transporters;

• State Road Fund Tax between US $ 80 - US $ 1.000 ( Azerbaijan) • Payable permit charges between US $ 100 – US $ 600 (Azerbaijan)• Charges payable by Turkish transporters that bring back semi-trailers unloaded from roro vessels between

US $ 100 – US $ 350 (Azerbaijan) • Extra charges on ADR goods ( even red pepper is dangerous ) up to US $ 320 on average• Quotas on transit - Lack of sufficient transit permits (Kazakhstan) • Long waiting times at border crossing points due to insufficient capacity ( Turkish-Georgian border ,

Georgia-Russia border, Azerbaijan-Russia border)

Costs before the Turkish-Iran Agreement of 2015Distance travelled (km) x fuel consumption (0.32 litres/km) x Fuel Price

Difference Charge ( EUR 0,80)

Post- Agreement of 2015Distance travelled (km) x fuel consumption (0.32 litres/km) x Fuel

Price Difference Charge (EUR 0,30)

After 2020 – on grounds of Turkmenistan’s closure of borders since February 2020

Fuel Price Difference Charge INCREASED !

From EUR 163 to EUR 700

(charge introduced for return trips with pre-2015 levels )

HIGH COSTS INCURRED BY TURKISH TRANSPORTERS FOR

TRANSITING IRAN

Turkey ranks 47th in the “Global Logistics Performance Index” of the World Bank published in 2018

Kazakhstan ranks 71, Georgia ranks 119, Uzbekistan 99, Ukraine 66 (Azerbaijan not ranked in 2018index)

Logistics performances must be equalized along the Caspian Corridor for effective supply chains …

Main exporters are best logistics performers

Transit shall not be an instrument of blackmailingbut it should be taken as a geographicalresponsibility.

Transit shall be deemed as a universal rightdefined by international organizations.

It cannot be an element of negotiating power.

WTO TRADE FACILITATIONAGREEMENT

ARTICLE 11: FREEDOM OF TRANSIT

1. Any regulations or formalities in connection with traffic in transit imposed by a Member shall not be:(a) maintained if the circumstances or objectives giving rise to their adoption no longer exist or if the changed circumstances or objectives can be addressed in a reasonably available less trade-restrictive manner;(b) applied in a manner that would constitute a disguised restriction on traffic in transit.2. Traffic in transit shall not be conditioned upon collection of any fees or charges imposed in respect of transit, except the charges for transportation or those commensurate with administrative expenses entailed by transit or with the cost of services rendered.3. Members shall not seek, take, or maintain any voluntary restraints or any other similar measures on traffic in transit.

1) STRONG LOGISTIC INFRASTRUCTURES

-ROADS AND ESTABLISHMENT OF EFFICIENT BORDERS

-REGULAR RO-RO LINES

-STRONG INTERMODAL CONNECTIONS

2) Full Commitment To «Trade FacilitationAgreement»

• Cooperation between borders

• Put some facilitative project like single window into practice tosimplify and modernize customs procedures.

• Introduce projects to facilitate customs and transport transactions

• Adapting necessary conventions in order to enter World trade

3) Digitilization In Transportation andBorders

4) Removing Visa Barrier For Drivers

A MEETING OF THE SECRETARY GENERALS OF IRU, TRACECA, BSEC, ECO AND TURKIC COUNCIL, WAS HELD ONLINE ON 15 MARCH 2021. JOINT STATEMENT.

OBSERVATIONS : Took note of the significant economic decline of between -7% and -8% of GDP in 2020, alongside the related decline in road transport operator revenues of between -18% and -22% (IRU Covid-19 Impact Report, Geneva, 2020).

SOLUTIONS : • Keep national and international mobility and supply chains operational, while ensuring safe working conditions for transport workers.• Encourage targeted financial support measures for road transport operators to address the current liquidity crisis and prevent mass bankruptcies.• Encourage the use of digital tools that already exist, including eTIR, e-CMR and e-ticketing, which facilitate the flow of goods and passengers across borders without physical human contact.• Recognise road transport workers as key workers and award them the same protection as other vital service workers during the Covid-19 response, including vaccination priority. Consider coordinated approaches for a digital Covid-19 negative test / vaccine passport for commercial drivers.• Investigate the possibility of creating a network of designated focal points among Member States for enhanced coordination and collaboration.

THANK YOU