Category: short sea shipping

The real impact of CETA: Global Economic and Commercial Agreement  

CETA

CETA WILL GIVE ACCESS TO 500 MILLION CONSUMERS

The Government of Canada claims that the Canada-EU Comprehensive Economic and Trade Agreement (CETA) will give Canadian companies preferential access to 500 million European consumers, a market evaluated at $ 18 trillion[1] [2]. Accordingly, bilateral trade would increase by 20 percent and would increase Canada’s GDP by $ 12 billion a year. This would create nearly 80,000 new jobs and increase the average Canadian household’s annual income by $ 1,000. [3]

Are these predictions realistic ? What are the business opportunities for transport and maritime companies? In order to answer these questions, this text analyses the figures of Canada’s international trade with the rest of the world and the European Union. It also attempts to estimate the impact of this agreement on transportation and the Canadian marine industry.

1-SUMMERY OF THE AGREEMENT

The CETA is considered a modern and innovative agreement because it covers a wider field of activity and is more permissive than other free trade agreements, such as the WTO’s General Agreement on Trade and Services (GATS) or NAFTA. The main provisions concern directly or indirectly the maritime sector.

1.1 Non-discriminatory rules for the goods, services and public procurement sectors

The rules of the “national treatment” and the “most favored nation” are maintained for both the goods sector and the service sector. The first rule requires equal treatment between foreign firms and local businesses. The second rule provides that the signatory parties must give each other at least the same advantages as they would accord to a third State.

CETA also provides that Parties may not adopt or maintain measures to limit the number of enterprises, the value of transactions, the number of transactions or natural persons, and the participation of foreign capital.

1.2 Elimination of tariffs and

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December 2016 Flags of convenience

Flags of convenience

THE CURRENT SITUATION

A flag of convenience is the flag of a vessel for which the actual property and control are located in a country other than that of the flag under which it is registered. For the owners of these vessels, the benefits are numerous,[1] including in the field of taxation, of security or labor law.

It is a phenomenon related to globalization. In 2015, they represented 71% of the total tonnage of the merchant navy. [][2] The world fleet operated under 152 pavilions. Three of these pavilions, Panama, Liberia and Marshall Islands accounted for 42.8% of the total capacity; either, 710 million tonnes (Mt) and 12 000 flags of some 50 000 vessels navigating the oceans. Panama dominates with 20.7% of world tonnage with[3] 343 Mt and 6 745 ships. Followed by Liberia with 1990 Mt and 2 996 ships and Marshall Islands with 168.6 Mt and 2 345 ships.[4]

None of those countries are among the major owners. The real and principal owners are Greece, Japan , China and Germany, which accounted in 2015 a capacity of 864 Mt and 16 752 vessels. Greece is largest owner with 308 Mt and 4 252 ships, mainly of bulk carriers and oil tankers. Japan comes in second with 242 Mt and 4135 Ships and China with 190 Mt and the 4720 ships.  [5]

MARKET FAILURE

This disproportion between the ship’s country of registration  and of countries owners is symptomatic of a market which is not efficient (Market Failure ). Flags of convenience and tax havens have no economic impact to added value of services, products or the development of markets.

It is a vicious circle, because the oligopolistic structure of the industry encourages imitation in order to protect market shares; the initiative of one will … Lire la suite

November 2016 Transportation by barge as an alternative to intermodal transport

Use of transportation by barge

The systems of transportation by barge have long been used as an alternative to land transport. This mean of transportation is competitive to trains and trucks. In addition, it significantly allows the reduction of the environmental footprint of the transport of goods.

There are two major segments in the market, long and the short distance.

Long-distance is used in large rivers, such as Mississippi, Rhine, Danube and St Lawrence in transporting the goods from one end to the other of the continents.

This system is competitive to trains and trucks, but its performance depends greatly on the quality of the underlying infrastructure and the interconnection of the navigational channels. In return, barges offer the advantage to adapt to different types of products transported and allow more flexibility for the navigation on the various courses of water. They offer capacities ranging from 350 to 11 000 tonnes of deadweight and use proven technologies.

On short distances, this type of transport is growing and presents new opportunities.  Pilot projects have demonstrated this effectiveness, in particular, to reduce congestion in the areas of access to port sites of international trade.

Despite the high volume of activities and the economic benefits that flow from port activities, access to facilities remains constrained due to the movement of trucks and trains. The comings and the goings of land vehicles pose a problem by the noise, air and ground pollution, and by the loss of time related to the traffic congestion. In addition, the congestion of port activities reduces the effectiveness of the supply chain by increasing the time of distribution of the goods to the markets of destination.

To solve these problems and, as a counterweight to the costly alternatives that the investments represent in the construction, enlargement and the optimization … Lire la suite