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  September 13th, 2016 | Written by

China’s Accession to TIR Convention Opens New International Trade Routes

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  • Rail and road accounted for 10 percent of China’s exports to the EU, and 3.2 percent of EU exports to China.
  • China’s accession to TIR “can be a real game changer for international trade.”
  • TIR could become a strong contribution to the Chinese vision for One Road One Belt.

China has taken a key step towards the development of international economic corridors with its regional trading partners and the rest of the world with the accession to the United Nations Transports Internationaux Routiers (TIR) Convention.

The convention will enter into force for China on January 5, 2017.

EU-China trade reached $580 billion in 2015, with 60 percent transiting by sea, according to Eurostat estimates, while rail and road accounted for 10 percent of China’s exports to the EU, and 3.2 percent of the EU’s exports to China.

“China’s accession to the TIR Convention will open new efficient and faster transport opportunities and transport routes between China and Europe,” said Christian Friis Bach, executive secretary of the UN Economic Commission for Europe (UNECE), one of five regional commissions of the UN. “It can become a real game changer for international trade and is a strong contribution to the Chinese vision for One Road One Belt.”

“This is an important step in harmonizing standards and boosting transport, trade and development across the Eurasian landmass,” said Umberto de Pretto, secretary general of the International Road Transport Union (IRU), an independent organization representing the international road transportation industry. “IRU has been a strong supporter of China’s One Road One Belt initiative, and we will continue working closely with the Chinese government and business community as we turn our attention now to implementing the TIR system.”

China’s One Belt, One Road initiative is aimed at improving the connectivity between China and Europe along the ancient Silk Road as well as by sea, and will require massive investments in infrastructure. In January 2016, UNECE and China’s National Development and Reform Commission (NDRC) signed a memorandum of understanding to establish an international PPP Center of Excellence that will be in charge of developing international best practices in PPP in the field of transport logistics. The first training program took place in May 2016 in Qingdao.

The TIR system is the only global intermodal customs transit system, constituting a major facilitation tool for both transportation and trade. Over 35,000 road transport operators worldwide are already authorized to use the TIR system effecting around 1.5 million TIR border crossing procedures per year.

The accession of China will foster the opportunities for economic growth and development of China and transit countries, facilitate trade with Central Asian countries, Mongolia and the European Union, as well as stimulate China’s transit and logistics services, according to a UNECE statement. China’s neighbors on its northern and western borders are already contracting parties to TIR, including Kazakhstan, Kyrgyzstan, Mongolia, the Russian Federation, and Tajikistan. The application of the TIR system will provide China the opportunity to shift its export goods under a single, simplified transit procedure to EU countries for all modes of transport. More than 1,200 Chinese road transport companies ship freight across China’s land borders, conducting more than 700,000 transit operations per year.

China’s accession should open new opportunities for China’s southern neighbors to consider acceding to TIR, the statement added.

China is studying acceding to other United Nations Conventions serviced by UNECE, including CMR (Contract for the International Carriage of Goods by Road) and the International Convention on the Harmonization of Frontier Controls of Goods, 1982, as well as ADR (European Agreement concerning the International Carriage of Dangerous Goods by Road).

UNECE’s Euro-Asian Transport Links Phase II report, released in 2013, identified nine rail and nine road routes between Europe and Asia that could provide a time and cost effective alternative to ocean trnasportation provided the appropriate infrastructure is in place. These routes stretch eastward from Central and Eastern Europe to Russian ports on East Sea, Chinese ports on the Eastern China Sea, and southward toward Iran and Pakistan and their ports in the Persian Gulf and Indian Ocean. The routes will crisscross the land mass between Europe and Asia, thus connecting regions and countries that have so far suffered from lack of access to seaports and good transport connections to their neighbors.