Soapbox - Global Express Association
Carlos Grau Tanner, Director General, Global Express Association explains how the General Agreement on Trade in Services is a good thing for express carriers
Express delivery companies operate very large aircraft fleets. Their airlines are all members of IATA. Flying is only part of the operational model, however. Express delivery services provide highly secure, door-to-door, integrated global networks blending different modes of transport, customs operations, and other logistics services.
An express hub handles up to one million shipments daily—or rather in the few hours it is in operation during the night. Express delivery has become a $175 billion industry and it keeps growing. Oxford Economics calculates that express delivery experienced growth rates of 7-8% in 2003-2008. And, while the recession has affected the industry, there could be similar growth in the future.
Express delivery networks act as a global conveyor belt, connecting small and medium-sized companies in 220 countries and territories around the world with their export markets. From a fashion designer in Italy to a Chilean sea bass exporter, people rely heavily on express networks to reach their international clients.
To keep the business model efficient, it is essential to secure access to new markets and allow goods to move across borders as fast as possible. Beyond air traffic rights, express delivery companies need access to trucking, warehousing, ownership and control of subsidiaries, and expedited handling by customs: a complex bundle of rights.
No surprise, then, that the Global Express Association actively monitors what happens at the World Trade Organisation (WTO). At the WTO, countries negotiate market access rights under the General Agreement on Trade in Services (GATS). Granted, the system has been criticized as slow-moving. And, if you are more used to the relative simplicity of aviation bilaterals, you may consider the GATS to be excessively complex.
Yet, for express delivery, the system has clear advantages. For one, it provides unparalleled legal certainty. Once a country has committed multi-laterally under the GATS—to let foreign investors fully own and operate a trucking company in their territory, for example—there is no going back. And the WTO brings with it a binding dispute resolution mechanism that is much more powerful than traditional bilateral consultations.
The Doha Development Round of the WTO’s talks aimed at breaking down trade barriers is about 80% complete. The final 20% stretch is proving most difficult to complete. Advances in services could significantly increase the value of the Doha package. For express delivery companies, the challenge is to secure commitments from more WTO members, beyond the 53 who have already done so, in order to expand their operations with the maximum possible legal certainty.
For more information: www.global-express.org and www.wto.org