Oeo,./o~-na/ 1.3, 61-64 (1977) © Akademische Verlagsgesellschaft - Wiesbaden

61

A V O I D A N C E OF NEW C O N F L I C T S I T U A T I O N S IN T H E E A S T - W E S T - R O A D - T R A N S P O R T

BINNENI3RUCK, H.-H., Frankfurt/Main *

1. Ensur ing Workab le Compet i t ion

1.1. Beginning to Find the Basis of Reciprocity

At present, it seems that the multiple problems arising in the eastern road transport markets with the development of trade between the East and the West have been super- imposed by interests of trade policy. But the time has come to lay more stress upon the interests of the western European transport operators. Unnecessary conflicts should be avoided. The haulier's claims have been clearly articulated; they are contained in the demand for a pro- rata participation in the road transport of goods with the COMECON states.

It is, however, difficult to define and formulate their aims and definitions exactly. The statistical data, the proof of high market shares of the eastern transport organizations and the description of the conditions which procure advantages for the East in the West, are clear evidence for the description of the situation.

Nevertheless, they cannot give full transparency to the actual practices and structures of the exchange of goods. The individual conditions, the ways in which business trans- actions for commercial deliveries are negotiated and the placing of orders cannot be observed in detail as easily as the dealings in a department store. They are, however, the " low key" to the future of trading between the East and the West and the chance to solve the existing problems. This is, where influence must be used to achieve a firm equilibrium in the economic relations. The basis of nego- tiations must be strengthened by improving the starting conditions so that the "principle of reciprocity" can be put into effect.

As a result of the detente in foreign trade politics, obstacles are no longer put in the way of the exchange of goods across the political borders between the East and the West. Here, interests have been marked out by contracts concluded between the different states and by the principles of the Conclusions of the Helsinki Conference on Security and Cooperation in Europe, 1975.

Today trade can be carried on across the political borders without difficulty. But as far as the transport of goods is concerned, there is no positive and clear defination and formulation of the aims and traffic interests. This has become necessary in order to provide guidelines and a basis for negotiations with the eastern transport organizations and to show them, what constitutes a limitation. The starting point could be the basic resolution of the Confe- rence on Security and Cooperation in Europe in the field of transportation which is worded as follows: "The participating states . . . . . . . voice their intention to further the development of the international transport of passengers and goods by land as well as the possibilities of a joint participation in this transport on the basis of mutual benefit". This formula has to be filled with life and regulations, for only then can be guaranteed that the possibilities of a cooperative partnership can be stabilized and made use of, to the mutual benefit of both sides; not only in bilateral relations, but also at Community level.

In this connexion the "Deutsche Industrie- und Handels- tag" has, with reference to the Conclusions of the Helsinki Conference, suggested (1) passing resolutions which would be binding for the participating countries and would guide the authorities and operators in their activities. The follow- ing targets are put to discussion:

- Principle of a pro-rate participation of the German transport operators

- Return loads shall only be allocated to carriers of the COMECON states to the same extent in the Federal Republic of Germany, as German operators obtain return loads in eastern Europe and

- Transport prices shall cover costs.

Priciples and targets are standards which,-almost certainly, cannot always be put into full effect. But they consolidate the "formula of mutual benefit" and help to avoid possible conflict situations in the development of the market. This is of primary importance at the present stage of develop- ment between the East and the West; it is this, in which both sides have a declared interest.

* Dipl. Volkswirt Horst-Herrnann BINNENBRUCK Bundesverband des Deutschen GLiterfernverkehrs (BDF) e. V., Postfach 93 02 60, D-6000 Frankfurt/Main

(1) Refer to: "Ost/West-Gegenverkehr" by Deutscher Industrie- und Handelstag, Bonn, 1976

62 GeoJoumal 1.3, 61-64(1977) © Akademische Verlagsgesellschaft • Wiesbaden

1.2. Interim Balance of Transport Policy

Clear targets and principles for the development of relations between eastern and western Europe have not yet been prepared and defined either at OECD, ECE, at European Community or at Federal Government level. The complex problems and demands voiced by the western transport industry should soon be taken as occasion to discuss these questions and to pass relevant basic resolutions. The subject is of topic interest and the problems have been widely discussed. Therefore, the organizations and governments should not hesitate to go one step further than the present discussion of questions of technical cooperation and tackle the task of transport policy as weN. When doing this, a "policy of small steps" could be more successful than mere declarations of intention.

If we were to draw up an interim balance of transport policy regarding the problems of the traffic between the East and the West, we could list only a few items. The political dialogue between the East and the West on the subject of transport has remained very limited; regarding road transport we should mention the COMECON states' joining the Geneva AETR-Convention of 1970 which - with a few exceptions - has not been ratified by them as yet. Within the OECD, problems concerning sea navigation, in particular of shipping line Services, have been discussed by the industrialized and underdeveloped countries, in order to adopt a code for the shipping line conferences within the frame of the World Trade Conference (UNCTAD). Binding agreements between the East and the West have not been achieved so far; the West would have to depart from the liberalization code of the OECD. It is interesting to note that the "UNCTAD Code of Practice" for navigation conferences has recently provided for the allocation of cargo in foreign trade between two countries according to the formula 40:40:20 to the national lines in question and to vessels from third countries. Governments and shipping lines are not obliged to apply this code. It could be used as a criterion in negotiations on load-allocation with the COMECON states. It remains open to question whether the conditions of sea navigation are comparable with those of land transport.

At the European Community level the Commission has been occupied recently with the East-West transport problems. A clear concept is not yet in view. But it is imaginable that there is a reciprocal formula in all Trade Agreements for commercial transactions with the eastern states cocerning the transports of goods. It may contain a protective clause, according to which legal transactions and activities in foreign trade may be restricted, in order to avoid or counteract the effects of foreign influences which do not conform with the liberal order of the Economic European Community.

The Federal Republic of Germany is also engaged in developing instrumentation to control the competition of eastern transport organizations in German transport markets. A positive balance, in the sense of a solution of the problems with which the transport operators are faced, has not been achieved.

2. Possible So lu t ions to the Problems

In this respect we seem to be justified in making proposals for the discussion of the existing possibilities of ensuring control of the competition between the East and the West in the field of road transport of goods. Here, the inter- national commercial road haulage sector in the Federal Republic of Germany has not only to work on the basis of the claims already voiced, but also on the central situation of the Fed. Republic. This means that not only the bilateral traffic relations between the Fed. Rep. and the COMECON states must be taken into consideration but also the traffic from third countries and the transit traffic.

The interest of German carriers in participating in the road haulage of goods between the East and the West has considerably increased recently. But their private initiatives, which have taken various forms so far in western Europe are insufficient in the face of the foreign trade and transport organizations. For this reason, an improvement of their participation has to be backed by a modification of present conditions and by a joint transport policy.

The problem areas in which decisions and measures should be taken have been shown: Exertion of influence on capacity supplies and control of the access to transport markets, improvement of access to freight and/or influence on placing of transport orders through flexibility of terms of delivery with importers and exporters, easing and acceleration of border crossings for drivers, goods and vehicles, removal of "cost barriers" in the eastern countries as well as legal parity of regulations governing business establishment. Interests can not be adjusted without flank protection by the Government and without contractual agreements with the eastern partner states.

It is important that the principles already mentioned are used in transport policy as a guiding-line for measures to be taken and agreements to be concluded. There is a close correlation between transport policy and trade policy - not only in bilateral relations but also as regards the common trade policy of the European Community. Of course, this creates coordination problems in the individual countries, in the different departments, in the international relationship of the governments and within the Com- munity. Whether solutions can be found for this internal complex, depends on which way an understanding can be finally achieved.

GeoJournal 1.3, 61-64 (1977) 63 (c~ Akademische Verlagsgesellschaft - Wiesbaden

2.1. Bilateral Agreements

The international road traffic between the countries of the European Community and the COMECON states is largely governed by bilateral agreements. The Federal Republic of Germany was not yet able to conclude administrative agreements with CSSR, Hungary and USSR, the Berlin- Clause being an impediment hereto. According to the agree- ments, the international road transport of goods is subject to licensing. Licences are standardized and their number is often restricted to a certain quota. They exist in the form of: Licences for one single journey, licences for a certain period of time, licences under a cooperation quota, transit licences and licences for special transports.

These agreements constitute a tool of transport politics which can be utilized for the regulation of the entries and transits of foreign vehicles. As all domestic transports with- in the territory of the other country are expressly for- bidden, the transport capacities acting on the market of foreign operators can be controlled. The possibilities should be used to reduce by negotiation the quotas agreed upon in the case of crushing competition or market disturbances. We could also imagine a unilateral reduction which would have to be fixed by contract. Furthermore, the placing of cooperation agreements, for instance between German and Bulgarian transport operators, under the cooperation quota, as has already been successfully practised in western Europe between the Federal Republic of Germany and Spain, could be considered. This means that licences are only issued, if both sides have agreed upon a pro-rata participation in the road haulage. A precondition would, however, be a transport policy based in principles of reciprocity and equality of treatment.

As concerns the transit licences, the position of the western European transport operators would be strengthened by a procedure, excluding the right to load return freight. Furthermore, the traffic comprising three countries (the so-called "three-country-traffic") would also have to be included into the quota system.

As regards the future quota policy in general, it will be essential to watch the participation of eastern transport organizations in the so-called "third-country-traffic" more closely. The bilateral agreements can no longer be considered separately. Like the transport relations of the neighbouring countries of the East and the West, they are in real economic correlation. A control of the entries and transits exclusively on bilateral level is useless, if the partner to the 'agreement has the chance to get access to the market through third countries.

2.2 Access to the Load

With regard to the question of ensuring the German transport operators more participation in the transport

orders, there is no simple solution. In this connexion, the bilateral administrative agreements on the international road transport of goods do not offer any means of control. The solution can only be to a minor degree in administra- tive procedures. It depends more on the terms of delivery agreed upon with the exporters and importers, on the availability of transport capacity and on the freight situation. Generally, working on commercial principles, these factors do not impede efficient competition. But as long as the state-owned transport operators of eastern Europe use the terms of delivery to block access to freight, those demands are justified which propose general rules for the placing of transport orders for such cases. The creation of pool organizations in the West would be one way of improving the chances of participation for the domestic transport operators. But in this case, return load-reporting offices would have to be established in eastern Europe. This presupposes the basic readiness of the eastern partner to recognize the principles of reciprocity and of equality of treatment. As is the practice in international relations with eastern Europe, this would require agreements and con- tractual treaties. They would have to be worked out at conferences and negotations - perhaps at Community level.

2.3. Improvement of Conditions for Frontier-Crossings

The international road transport of goods could be made easier if all states of the Eastern Bloc would unconditional- ly accept the "green insurance card". Individual insurances should be completely abolished. In the question of the issue of visas, the principle of reciprocity should be applied with- out exception; permanent visas for the driving personnel would avoid long delays and loss of time on frontier- crossings. It would also be important to simplify the pro- cedure for getting the visa; furthermore, a simplification of the customs regulations and forms in the customs clea- rance would accelerate frontier-crossing.

2.4. Abolishment of Cost-Barriers on the Routes in the COMECON States

The high road taxes levied in some countries of the Eastern Bloc are particularly detrimental. Due to them, the western European transport operators are charged when carrying goods to and from the COMECON states. Similar dues are not levied in the western countries; if motorway-fees are levied, they have to be paid by western lorry-owners, too. It would be of great advantage if the Federal Republic of Germany were to sign Waiver Agreements on the payment of motor vehicle tax with all COMECON states, which did not only cover the German motor vehicle tax but also all utilization charges and fees levied on commercial vehicles by the eastern partner state.

64 GeoJournal 1.3, 6 1 - 6 4 (1977) © Akademische Verlagsgesellschaft. Wiesbaden

2.5. Legal Parity of Regulations Concerning Establishment of Business

Whereas, due to the liberty of settlement in western Europe, the eastern state-owned organizations are able to establish companies of their own or to take a share in western firms, the chances for western operators to get established in the countries of the Eastern Bloc are very

limited. Bilateral Cooperation Agreements-e.g. the one con- cluded between a private transport organization of France and the road transport organization of Hungary - show that in eastern Europe mixed companies, i.e. a participation of western transport operators in eastern firms, are possible. Such business mergers are controlled by law and allow the participation of foreign firms. But financial participation is limited and cannot result in a majority share. This inter- pretation should also be applied to business establishments of eastern state-owned organizations in western Europe. In order to avoid the risks of monopolies, participation of eastern state-owned companies in western European firms should be subject to licencing.

2.6. Removal of Distortions of Competition to the Disadvantage of German Road Hauliers

In order to create equal starting conditions for the German road hauliers, it has become essential to reduce the level of the motor vehicle tax for commercial vehicles in the Federal Republic of Germany to a level corresponding to the average tax rate payable on commercial vehicles within the European Community.

But this measure would only equalize the conditions of competition among the western transport operators. With regard to eastern Europe, further steps must be taken. Considering the fact that the motor vehicle tax constitutes a contribution to the road costs, it is not reasonable that lorries should pay taxes in their home country for the time they spend in foreign countries. As in Denmark and Sweden, a regulation would be conceivable and practicable, according to which the motor vehicle tax for commercial vehicles is refunded for the time spent abroad.

It is also unfair that taxes are levied on additional trailers, while they are immobilized. These taxes are a burden to the whole business and result indirectly in an increase in transport costs, as the proceeds of the vehicles in action have to help pay the taxes for the immobilized vehicles.

3. Final Remarks

The above proposals for discussion can, certainly, be supplemented by other measures. The Federal Republic of Germany should not only consider the completion of foreign trade legislation with general rules for the placing of transport orders, but also consider prohibitive tax measures, if the principles of reciprocity and equality of treatment are not accepted by the eastern states. The levy of motor vehicle taxes in the Fed. Rep. at the same rate as German road hauliers are charged abroad would be reason- able protection for a highly competitive sector.

Of course such measures would raise new foreign exchange problems for the eastern countries. It must be feared that negative impulses on the future development of trade between the East and the West might result. For this reason, a modification of the existing and already developed conditions in favour of a balance of interests as well as supplements to existing laws and contracts and agreements on the principles and targets would be more useful to the new relations.

The position already achieved is considerable. But a counter-weight has to be set against the supremacy of the eastern state-owned operators in the international transport, to influence the development for more mutual benefit. On the long run, market disturbances jeopardize the foundations of a free market economy.

R e f e r e n c e s

B UN DESTAGSD RUCKSACH E, 7/3582: Area Planning Report 1974

BDF DORNIER: Organisation of Freight Distribution Centres {Survey for the Federal Ministry of Research and Technology). 1975)

HALDIMANN, H.R.: Integrale Logistik, Zi.irich. (1975)