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Russian version

The Reopening of the Silk Road – Driving Progress and Regional Stability

Speech by Paul Laeremans
President, International Road Transport Union 

Distinguished Ministers, Excellencies, dear Delegates, Ladies and Gentlemen,
Some of you who are historically minded may have observed that 2007 is a year of anniversaries. Some anniversaries in 2007 mark events that have fundamentally reshaped our world.

Two months ago, the UNECE, which manages currently about 50 multilateral international conventions and 300 agreements to facilitate road transport and trade, celebrated its 60th anniversary, under the leadership of Mr Marek Belka, UNECE Executive Secretary, and with the participation of the IRU.

A few months ago, we celebrated also the 50th anniversary of the European Union. It was the 1957 Treaty of Rome that first put Europe on the path towards peaceful economic and political integration. Today, the EU, with a population of 490 million inhabitants, has become the largest Single Market of the world.

700 years ago, the young Marco Polo went on his trip to discover the East and reach China which by that time already was an ancient civilisation of thousands of years of history. During several subsequent centuries, China and many of its neighbours turned to be inward-looking and difficult to access from abroad.

What a change has been brought about by the unprecedented development of China, which led to this country becoming already in 2001 a member of the World Trade Organisation (WTO).

Meanwhile the road transport industry will remember that 110 years ago, in 1897, Karl Friedrich Benz patented the first truck. The contribution that the new automobile era has made in terms of driving trade, tourism, prosperity and social development is well worth remembering.

Allow me, however, to highlight that if road transport has existed for about 100 years, international road transport is a very young technique, about 60 years old, which started only after the second World War.

In this specific context, if I might be allowed to push this preoccupation with dates one step further, I might add that next year – 2008 – will mark the 60th anniversary of the IRU.

Since 1948, through its international network of 180 Members in 70 countries, the IRU is promoting the interests of millions of road passenger and freight transport operators, not only in each of your countries, but all over the world.

Since then, the IRU’s expertise and constructive approach associated with its continuous commitment to work together in a true public-private partnership with all the governments and public administrations everywhere, is fully acknowledged, whether in the EU bodies, in the ECMT, in the WTO and the WCO, as well as in the UN and in all its regional and specialised agencies concerned with trade development and transport.

At this point, allow me also to highlight that the aim of the IRU is to look forward. That is why, as IRU President, it gives me the greatest pleasure as one of the opening speakers to welcome each of you to this 4th IRU Euro-Asian Road Transport Conference.

The liberalisation of the economy, the globalisation of trade and the reopening of the Silk Road are the archetypal results of these recent developments.

To measure in an easy way the consequences of globalisation, a recent IRU survey demonstrated that to have a cup of coffee at a café in Geneva, at the current market price, requires the collaborative efforts of 29 companies from 18 countries.

If 29 companies are required to produce a cup of coffee, can you imagine how much more it would cost to create an affordable motor car, a computer or a DVD machine. For example, to make a car, it requires 10,000 suppliers, each of which has further suppliers.

This is why road transport, which is the sole mode of transport to provide door-to-door services - due to the outsourcing resulting from the liberalisation and globalisation of the economy - is no longer simply a transport mode but has become a vital production tool interconnecting all these businesses.

While road transport is the link between nations of the world, we should not forget that 85% of road transport is realised in the modern economy over short distances, below 150 kilometres, and that only 0.9% of road transport operations are realised above 1,000 kilometres.

The role of road transport in ensuring the mobility of goods and the interconnection of all the businesses from the local to the global markets is also confirmed by the fact that domestic operations account for 90-95% of all road transport movements, while international transport accounts for around 5-10% in most countries.

Indeed, globalisation does not necessarily mean transport over long distances.

Globalisation means above all making all the activities at the best place, producing the best products, and trading under the best possible economic, social and fiscal conditions, by globally interconnecting all the businesses, communities and regions of the world.

If globalisation was driven 700 years ago by countries with maritime fleets and having direct access to the sea and over the last 200 years by multinational companies, today, due to the opening of the markets and the advent of the internet, each of you is an actor of globalisation and each of you is already in cooperation or in competition with everyone in the world!

As you know, due to its major investment in the production sector, and due to its successful development, China has become the factory of the world, and has become a major hub of sea container traffic in the global transport system. In fact, 75% of manufactured goods sold in North America are produced in China. Wal-Mart, the biggest retail company in the world, has 80% of its products “made in China”.

Moreover, due to the fact that 80% of world trade is transported since 1970 by container through very few ports, the resulting concentration of trade creates an increasing desertification of the economic development in numerous, often land-locked regions, which most require economic, social and political stability.

Furthermore, the concentration of 80% of world trade in only a few ports is generating not only an increasing desertification of the port hinterland but also bottlenecks, congestion, delays and above all additional costs! This is why the ports are increasingly saturated.

To mitigate the abovementioned problems, the IRU has, during the last 15 years, been working on its dream to reopen the Silk Road.

The IRU vision and action is to create, by working together with the concerned governments, along the 12,000-50,000 kilometres of the various itineraries of the Silk Road, peace and prosperity, not only in a handful of ports and port hinterlands, but in all countries. If it was possible to interconnect all these regions by transporting goods along the ancient Silk Road 700 years ago, why would it not be possible today, with the modern and professional trucking industry?

The IRU truck caravan, launched with the full support of the Chinese Government during the last Euro-Asian Conference in September 2005, clearly demonstrated that the reopening of the Silk Road requires no infrastructure investment. Therefore, the reopening of the Silk Road  is not only possible, but vital to ensure economic prosperity and peace from the Pacific to the Atlantic.

In fact, with the reopening of the Silk Road, the objective is not only to create an alternative for the transport of goods from China to Europe, but it is above all to use the door-to-door services offered by road transport to interconnect all the businesses from China to the Black Sea, to the Middle East, to the EU, to the CIS, and even to Africa and all the main ports of the East Coast of the USA.

The feasibility of this vision has also been proven by the study recently published by the American Chamber of Commerce on the “land transport options between Europe and Asia”.

This study clearly demonstrated that, without spending one additional penny on infrastructure, it is already possible to ship Chinese containers by road with shorter delivery times and competitive transport costs to all the main major markets of the world.

This study also proved that such new road transport activities can still be dramatically improved, if we pull down the numerous existing obstacles along the Silk Road – resulting mainly from inappropriate procedures rather than a lack of infrastructure as is commonly believed. Governments must implement, in a harmonised manner, all the multilateral trade and facilitation instruments which have proven their efficiency elsewhere, such as the CMR and the TIR Conventions as well as the trade agreements which ensure freedom of transit for goods, vehicles and drivers.

Governments should also in priority work together with the European Union to overcome the major and dramatic restriction imposed by the Schengen Agreement on the visa issuance for professional truck drivers.

For the IRU, the current limitation of the validity of the Schengen visa of 45 days has as a major consequence that, for most of the fleet operators engaged in international traffic with the EU, each truck requires three drivers. Therefore, each driver can only drive his truck one-third of the working time. Two-thirds of his working time is spent in the heavy and costly burden of the administrative procedures required to renew his Schengen visa! (And this, in the midst of a crisis of driver shortages!)

Moreover, this totally unacceptable situation not only penalises road transport but is also in full contradiction of human rights, which give to each person holding a job the right to work, fully and not only one-third of his time.

The longstanding inaction of the EU Commission and governments to find an appropriate solution to this dramatic visa problem, that is offering the repeatedly requested one-year, multi-entry visas for all professional drivers, can only be interpreted as a technical EU neo-protectionist measure.

Let me conclude by emphasising that the IRU is committed to sharing its worldwide experience and to work together in a true Public-Private Partnership with all governments eager to seize, in full respect of the facilitation and security rules, all the fabulous new trade opportunities offered by the reopening of the Silk Road, and to ensure not only at national level but in all the relations between Europe and Asia, efficient road transport.

Governments should never forget that any penalty on road transport is an even bigger penalty on economic development.

Help me to help you by implementing the IRU slogan “working together for a better future”.

Thank you for your attention.

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