In an interview with the Dhaka Tribune, the secretary general of the International Road Transport Union (IRU), Umberto de Pretto, explains the importance of the only global customs transit system on bilateral trade moved between Bangladesh and India or neighbouring countries by road
The International Road Transport system (known as TIR: Transports Internationaux Routiers) offers a single customs guarantee backed by the TIR international chain, managed by IRU. Could you define the process?
Under the TIR system, customs-sealed vehicles and freight containers are allowed to transit countries with one single document (TIR Carnet) with minimised border checks. TIR Carnet is the customs declaration and a guarantee for customs duties and taxes.
This convention streamlines border crossing procedures and guarantees the payment of customs duties and taxes. Customs formalities are performed at origin and destination rather than at each frontier, while costs are reduced both for customs authorities and for private sector.
The progress in the Bangladesh-Bhutan-Indian-Nepal Motor Vehicle Agreement (BBIN-MVA) has been slow over the last two years. Do you think it will be mobilised through the introduction of a global customs transit system like TIR?
The BBIN Motor Vehicle Agreement is a framework agreement. To make it operational you need tools which could facilitate its implementation. As the BBIN study shows, the TIR system offers concrete transit mechanisms and could significantly contribute to the implementation of this agreement.
How can CUTS International and IRU provide the ideal transit mechanism?
TIR Convention is a global UN convention with 71 contracting parties which has been tried and tested over 60 years. IRU has been mandated by the UN to manage this convention. In fact, CUTS International conducted this study in cooperation with IRU to explore the benefits of this convention for the implementation of BBIN MVA.
The results are promising and led to India’s accession to the TIR Convention. The conclusions made by the study are also useful for and can be taken into account by other BBIN countries.
The BBIN-MVA is designed to improve trade and investment ties among the countries, but are they ready to overcome the challenges such as the huge road maintenance costs and immigration?
To overcome the challenges, you need to take a step-by-step approach. The signature of BBIN MVA in 2015 was the first step which allows international transport within the region. Accession to TIR is the second step which has been taken by India and needs to be followed by others to turn international transport into reality.
I am confident that when the transport and transit is promoted, investments will follow. One should also notice that transit could boost national economy and trade. It could create more jobs in the transit corridors and tolls can cover the maintenance costs of the road.
India may decide to approve the TIR Convention to boost overland trade. Do you think other countries, including Bangladesh, will agree to it?
One of the early results of the BBIN study was the accession of India to the TIR Convention which took place on June 15, 2017. Now IRU is working closely with India to make TIR operational by the end of this year.
Bangladesh will be the next immediate beneficiary of the system. Bangladesh’s accession to TIR could solve many of the current impediments on trade and transport between the two countries and will promote connectivity and regional integration.
Accession to TIR will reduce transport and trade costs. TIR will also facilitate the implementation of WTO’s Trade Facilitation Agreement, of which Bangladesh is a party to. Under TIR and BBIN MVA, Bangladesh goods could be cleared in Delhi and other inland customs offices rather than at borders.
Will the TIR Convention also provide security against militants?
One of the main features of TIR system is the security element which is supported by ITC tools. In fact, only authorised transport operators could be admitted into the system under strict rules and regulations and they may be excluded from the system in case of any violation.
Only the trucks and containers that are ready for the transport under customs seals can be used for TIR. Any irregularity will be identified and reported to all countries en route thanks to real-time ITC tools.
Will the developing countries be able to provide such technical support required for the TIR system?
IRU provides technical support to the countries before and after the accession. TIR system has already been set up. So the government doesn’t need to invest in it. TIR is based on public-private partnership. We cooperate closely with the government and the private sector, and provide all kind of support including legal, technical and training in order to prepare the country for the implementation.
Will movement of Indian vehicles affect trade disparity? Will it also increase smuggling of goods into Bangladesh from India?
The TIR system is most secure. The rate of irregularity and claims in the system is almost near to zero. Regarding the issue of disparity, I understand that this concern has been removed under the BBIN MVA through a quota and permit system. In fact, trade already exists between Bangladesh and India. TIR will only facilitate and reduce the costs for both sides.
How does connectivity with India relate to our link to the Asian highway?
That is an important issue. In fact, TIR is the only global transit system. So it not only connects the countries in the region, but connects BBIN region to all other TIR contracting parties around the world. There is no need to establish costly regional transit systems under TIR. All corridors such as BBIN, BCIM, BIMSTEC could be operational through it. China also acceded to TIR in 2016, so with Myanmar and Bangladesh the BCIM corridor could be operational under TIR system.
Does IRU have any plan to discuss further the TIR system with the Bangladesh government or call a meeting with the stakeholders?
IRU officials visited Dhaka in 2016 and discussed TIR with all relevant stakeholders. We are in contact with the Bangladesh government and have expressed our readiness to provide any support to Dhaka before and after the accession. We would be happy to continue our efforts to promote connectivity and regional integration by establishing the TIR system in the whole region.