Trade Facilitation – Impossible Trade Facilitation – Impossible Without Facilitating LogisticsWithout Facilitating Logistics

Simon BennettSimon BennettSecretary, International Chamber of ShippingSecretary, International Chamber of Shipping

WTO Forum, Geneva,WTO Forum, Geneva,25 September 2008 25 September 2008

Presentation outlinePresentation 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 shipsContainer ships

International shipping – lifeblood International shipping – lifeblood of world trade 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 Trade efficiency needs liberalised shipping markets 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 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 Important obstacles to the efficiency of shippingefficiency 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 regulationRegional 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’ CO2 regime, UNFCCC principle of ‘common but differentiated responsibility’

New pressures with environmental rules – different standards in different ports means chaos

Major challenge -‘Post Kyoto’ CO2 regime, UNFCCC principle of ‘common but differentiated responsibility’

Security versus facilitationSecurity 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 facilitationChallenges 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 Keeping pace with the growth of maritime trademaritime trade

Source: Fearnley's Review

Port infrastructure and hinterland Port infrastructure and hinterland connections under serious strainconnections 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 CO2

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 CO2

Integrated transport policies 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 The shipping industry has much to gain from WTOto 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’

ConclusionConclusion

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

Thank you Thank you

For more information visit

www.marisec.org

www.shippingfacts.com

www.marisec.org/icsfilm

For more information visit

www.marisec.org

www.shippingfacts.com

www.marisec.org/icsfilm