The Hindu Business Line : For a modern day Silk Road

Reopening of trade by the land route will drive progress across the Euroasian landmass. A beginning has already been made with the launching of the historic Beijing-Brussels and Belgrade - Istanbul caravans.

MR UMBERTO DE PRETTO, DEPUTY SECRETARY GENERAL, IRU

Mr Umberto de Pretto, Deputy Secretary-General of the Geneva-based International Road Transport Union (IRU), was recently in India to encourage the Indian authorities and the members of the Confederation of Indian Industry to implement multilateral facilitation and security instruments such as TIR Convention to remove impediments to road transport and trade by road with South Asian and global trading partners. In an interview to Business Line, Mr Pretto explains why it is important for India to join the IRU and sign the TIR (UN Road Transport Protocol) Convention.

Excerpts from the interview:

What is IRU?

It is International Road Transport Union. It was founded as early as 1948 to facilitate the reconstruction of the war-ravaged Europe. The reconstruction work presupposed seamless movement of goods vehicles among various European nations. The members of IRU therefore decided to allow hassle-free transportation of goods by road among themselves. The eight founding states included Belgium, Denmark, France, the Netherlands, Norway, Sweden, the UK and Switzerland. Today, IRU has 180 members in 70 countries.

How did the evolution take place?

Evolution is a gradual process. In 1973 a permanent delegation to the European Union was established in Brussels, in 1998, IRU permanent delegation to the CIS countries in Moscow, and in 2005, IRU permanent delegation to the Middle East in Istanbul.

And in Asia...

We do not have much presence in Asia, presumably because IRU never tried to market itself. In the past 60 years we never went out to enrol new memberships. The membership growth has been by natural expansion. Fortunately, the situation is changing now. Some of the Asian countries, including China, are close to signing the TIR Convention. Unfortunately, India is not one of them.

Why?

I feel this is more of an ignorance. Not many countries, including India, have a clear idea about IRU or the TIR Convention.

What about the United States?

The US is signatory to the Convention but yet to implement it. But once China signs the Convention, the US will be forced to change its present stand.

What is TIR?

TIR (Transport Internationaux Routiers) Convention is the UN Road Transport Protocol. The adoption of the protocol facilitates seamless road-based trade and travel across national boundaries. It is administered by IRU. The TIR system operates through the issue of a document called TIR Carnet. With the TIR Carnet, a truck carrying international goods can avoid detailed screening and physical inspection in borders. There is rapid screening of the TIR Carnet document and TIR seal at border crossings and there is no need for detailed Customs declarations and inspections, which can be done in inland Customs stations in the originating and destination countries. The adoption of TIR will benefit Indian trading community immensely.

How?

Take for example India's trade with Bangladesh. The bulk of it is by the land route. Every one knows the problem of detention of trucks at the border, throwing up a host of other problems. All these can be avoided through adoption of TIR.

How can this be adopted?

The implementation of this system would require ratification of few more UN Conventions by India and the neighbouring countries through legislative action and also forming an apex road transport association in each country that can become an affiliate body of IRU.

Which means, unless Bangladesh also adopts the Convention, India will not be able to avail itself of the benefit of TIR system in respect of India-Bangladesh trade by the land route...

Yes. Fortunately for India, two of its neighbours, Pakistan and China, are on the way to ratifying the TIR Convention and will start trading vide the TIR System.

Is the TIR system applicable to multi-modal transportation?

Certainly, provided road is used in one leg of the journey. At the port of entry in the European Union, there are advantages for containers arriving under TIR by sea from Asia. No third party will be involved leading to reduced delay and therefore reduced costs, completion of Customs formalities the same day, Customs clearance in final destination and cost only that of TIR Carnet.

Can a country nominate more than one transport associations for affiliation of IRU?

No. Only one association can affiliate itself. We experimented with two associations in an East European country and the experience was far from satisfactory.

What are your immediate priorities?

Our priorities for 2007 are clearly defined — sustainable development through innovation, incentives and infrastructure and facilitation of trade tourism and road transport. If the Silk Road worked for Marco Polo then, why shouldn't it work for trade and transport today? Reopening of trade by the land route will drive progress across the Euroasian landmass. A beginning has already been made with the launching of the historic Beijing-Brussels and Belgrade - Istanbul caravans.

What is your impression after discussion with the Indian authorities?

From the response, we have reasons to feel hopeful. However, to get things going perhaps a big push will be needed.