(MENAFN- Muscat Daily) Muscat- The International Road Transport Union's (IRU) secretary general, Umberto de Pretto believes that Oman will soon grant access to UN TIR (Transports Internationaux Routiers or International Road Transports) which will boost trade between the GCC countries and will help Oman in branding itself as a logistics hub in near future. In an emailed interview with Muscat Daily, Pretto talked about how TIR can help in improving connectivity among the GCC countries.
Recently, there was a news regarding Saudi Arabia's accession to the TIR Convention to support improved regional integration. Can you elaborate on this?
The IRU is delighted by the Saudi decision to accede to the TIR Convention. With more than 30 per cent of the world's trade crossing the Red Sea, Saudi Arabia is pivotal for transit through the GCC countries and the Middle East due to its geographic and economic status. The Saudi government will use the TIR system to help improve and develop its transport sector, as outlined in its Vision 2030 and National Transformation Program 2020, positioning the country as a key logistics hub. Saudi Arabia joins major trading nations, including Pakistan, China and India, to ratify TIR recently. TIR transits began operating recently across the China-Russia border, and are soon to start between Pakistan and Iran.
How TIR can help in improving connectivity among GCC nations?
At the heart of TIR is the notion of interconnection: We know that this international customs transit system, and its related tools such as Electronic Pre-Declaration (TIR-EPD) at customs points, helps improve the flow of trade across borders. Since its inception in 1949, TIR has proved a solution to achieve regional unity, dynamic trade flows, and has significantly contributed to safer roads, drivers and a highly skilled professional driving community. This is why IRU promotes TIR as a mechanism for regional and economic integration, and as a way for countries to work together and enjoy better trade relations.
Bilateral trade between Arab countries is currently as low as 10-15 per cent. TIR, with its benefits of seamless cross-border connectivity, will significantly transform the trade potential of the region. TIR enables goods to transit from a country of origin to a country of destination in sealed load compartments that are controlled by customs via a multilateral, mutually recognised system. This system secures customs duties and taxes and provides a robust guarantee mechanism, reducing trade transaction costs, facilitating higher growth of intra-regional and inter-regional trade.
Oman also aims to become a global logistics hub, so could Saudi's accession or any other development help the country in achieving this target?
Saudi Arabia's accession will positively impact Oman's national ambition to become a global logistics hub. With TIR facilitating the free flow of goods and with Oman and Bahrain set to join other GCC TIR countries, there is no doubt that Oman will play a strategic role in expanding regional trade.
Foreign investors, looking at indicators such as border crossings and customs formalities, would be encouraged to invest once a country accedes to TIR. Adopting the global standard sends a strong signal to investors, who would have more confidence in the attractiveness of investment opportunities relating to transit and trade.
IRU is planning to hold the IRU World Congress in Muscat later this year. Can you explain why Oman was chosen for the venue and how it will benefit the sultanate?
The IRU World Congress, to be held in Muscat from November 6 to 8, 2018, will bring together industry and government leaders from around the world to tackle transport and trade challenges in both goods and passenger transport. The selection of Oman to host the IRU World Congress was the result of a competitive bid, which highlighted the country's modern transport, event and tourism infrastructure, its geopolitical role in the Gulf region and beyond, and its ambitious vision for growth in trade and the logistics sector. In addition, Oman's strategic location as a trade hub and its dynamic investment strategy to become a logistics leader over the coming years, both regionally and globally, makes it an ideal venue for engaging transport and trade leaders from around the world.
How can IRU help Oman in developing its logistics sector in the future?
As the world road transport organisation, IRU manages the TIR international guarantee chain, distributes TIR guarantees through its member associations, and oversees IT and administration processes. IRU also develops new and innovative resources and services that work with and alongside TIR to facilitate trade and goods transport. Customs authorities implement TIR at the national level, including border controls, approvals of national TIR operators and vehicles. They can also contribute to amendments to the TIR Convention. We hope that Oman will accede to TIR very soon, which will enable us to work with the relevant agencies to roll out the system and begin to see TIR operations across the region. We would seek to work closely with Oman to develop a digital TIR system that applies the latest technologies and is at the core of efforts to ensure a seamless, transparent and more efficient supply chain. By going digital, each shipment benefits from increased overall efficiency of logistics, resulting in increased economic competitiveness.
What do you think are key challenges in rapid development of logistics sector or interconnectivity between GCC countries?
Up to 57 per cent of transport time is spent at border crossings and 38 per cent of transport costs go towards unofficial levies. This presents a barrier to trade – which TIR can tackle effectively. With bilateral trade between Arab countries low, the main opportunity now is for TIR to be adopted by every country in the region to maximise its potential for facilitating trade. Nabil al Bimani, group chief on ports and freezones for Asyad Group – confirmed in a meeting with us, the next steps for the government are to simplify regulations and practices related to the movement of goods along domestic and international routes. This includes customs facilitation and enhancing safety on the roads. In addition, with the World Trade Organization's Trade Facilitation Agreement (TFA) coming into force last year, the spotlight has been on TIR as an effective tool to implement the TFA's objectives.
As an expert on the matter, what suggestion would you like to make for Oman's government?
The IRU has long advocated for ending silo approaches to border processes and unifying them under global conventions – such as TIR. For seven decades TIR has been facilitating and securing customs procedures for road transport. We have also worked to apply TIR to the inter-modal context – which is particularly relevant for Oman. Pilot projects have shown considerable savings in time and costs, as a result of reduced border processes; reduction in emissions with shorter waiting times; and, conversely, a significant boost to trade as the number of transports could potentially rise.
I would reinforce the message, therefore, that by signing up to global conventions, Oman will see its transport sector become ever more professional and efficient. We look forward to working closely with Oman on its accession to TIR as a first important step and we intend to develop dynamic debate around all of these issues at our World Congress in Muscat this coming November.
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