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OECD Secretary-General

International Transport Forum 2015 Annual Summit opening plenary remarks

 

International Transport Forum 2015 Annual Summit

Opening Plenary: Transport, Trade and Tourism: Mobility for a Connected World

Remarks by Angel Gurría, Secretary-General, OECD

27 May 2015

Leipzig, Germany

(As prepared for delivery)

 

Excellencies Ministers,

Professor Krishna,

Dear colleagues,

Ladies and gentlemen,

 

 

It is a great pleasure to be here in Leipzig again for the Annual Summit of the International Transport Forum. As Professor Krishna has just highlighted in his remarks, trade and tourism are central to today’s global economy, and must be underpinned by efficient and reliable transport systems.

 

 

Efficient transport systems are key to harnessing global value chains

 

The rise of global value chains, or GVCs, has been a dominant feature of world trade today. Efficient transport services are vital for the smooth functioning of GVCs, which are often characterised by networked production and just-in-time supply management.

 

The cargo shipping sector alone carries about 90% of the volume of merchandise traded, accounting for about half of all merchandise in value terms. Air freight represents over one third of the value of world trade in goods. Taken together, transport and logistics services account for more than 20% of services trade. They are not only extensively traded in their own right, but they are also intermediate services for other kinds of trade.

 

And although growth in global trade has been weak since the crisis, we should not forget about tourism, which has shown remarkable resilience. In OECD countries, tourism directly contributes to almost 5% of GDP, 6% of employment, and 21% of exports of services.

 

 

Despite the importance of the transport sector, it remains heavily regulated

 

Excellencies, ladies and gentlemen, despite the importance of the transport sector, it remains subject to a high degree of regulation. This, in turn, has an impact on the rest of the economy.

 

A new tool at the OECD – the Services trade (STRI) – measures barriers to trade in services across 19 sectors, including four in the transport industry: air transport, maritime shipping, road freight, and rail freight. Our analysis shows that transport services are among the most heavily regulated services sectors.

 

This is particularly the case for air transport, which is affected by restrictions contained in hundreds of bilateral agreements, and where a range of domestic measures restrict foreign establishment and competition.

 

Our analysis using the index I just described shows that there is a positive correlation between easing regulatory impediments and increased services trade. In fact, we find that reducing trade barriers not only leads to an increase in imports as one would expect, but that that it leads to twice as large an increase in services exports. This is because many restrictions are behind-the-border measures, which impose costs on local firms too, making them less productive and efficient.

 

 

Transport policy can and should play a role in tackling climate change

 

Excellencies, ladies and gentlemen, no conversation on transport and trade in 2015 would be complete without a reference to the threat presented by climate change. As many of you have heard me say before, we remain on a collision course with nature. Meeting the 2-degree target we have set ourselves will require urgent action in a wide range of policy areas – not only core climate policies.

 

Transport as a whole accounts for 23% of global CO2 emissions from fuel combustion (30% in OECD countries). A growing body of work at the OECD highlights opportunities for greening transport. For example, policies that incentivise the development of electric vehicles, and efforts to address bottlenecks to investment in high-speed rail, both have their places in a broader toolkit of solutions.

 

Next week, I will present a new report to ministers entitled Aligning Policies for a Low-carbon Economy. In it, we offer a diagnostic – prepared in close collaboration with the ITF, as well as the Nuclear Energy Agency and International Energy Agency – of the range of public policy choices that help or hinder process. Take trade policy, for example, where we know that import tariffs still penalize trade in some of the technologies needed for the low-carbon transition.

 

Excellencies, ladies and gentlemen,

 

We owe it to future generations to ensure that all policies – including transport policies – start to address the climate challenge now. So let us work together to put in place better transport policies for better lives.

 

Thank you.