Although the agreement of cross-border transport in the Greater Mekong Sub-region (GMS) has largely been in effect since 2015 after Myanmar finally ratified it, some technical issues remain too complex to resolve so it has not actually been fully implemented, especially with regard to the customs guarantee issue.
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The GMS consists of the People’s Republic of China (PRC), Myanmar, Thailand, Lao PDR, Cambodia and Vietnam. In 2016, ministers of transport from the six countries signed one memorandum of understanding (MoU) regarding the Cross-Border Transport Agreement (CBTA) by simplifying some technical criteria involving transportation by lorry and containers.
Under the current status of the CBTA, each country must issue an approval certificate and temporarily record the movement in and out of the regular 500 trucks in each country. To complicate matters, Myanmar asked to join the early harvest CBTA in 2021, according to a report from the Ministry of Public Works and Transport.
Currently, through the GMS’ early incarnation of the CBTA, Cambodia has registered 20 vehicles (two passenger buses and 18 cargo lorries); China registered 149 trucks (59 for passengers and 90 for cargo); Laos registered 22 cargo lorries; Thailand registered 491 ¬ 21 for passengers and 470 for cargo – and Vietnam registered 43 trucks – six for passengers and 37 for cargo.
Sin Chanthy, president of the Cambodia Freight Forwarders Association (CAMFFA), says that GMS’ the lack of full implementation of the CBTA is because some technical issues remain unsolved such as custom guarantees, lorry lengths and weight – the latter set at only 40 tonnes for both containers and the vehicle carrying them.
“Until today transportation in the GMS has not worked well, but it has been conducted bilaterally. The issue is mostly on custom guarantees. We are talking with the operators and customs officials both in their home countries and the countries they pass through to their ultimate destination. Now we have an operator and cargos to be moved but so far no activities have been conducted under the scheme. It is just talk,” he says.
“Custom guarantees are the troublesome issue and the format for customs simplification has yet to be developed well. Currently we are clear on goods clearance from sea ports and airports, but the form for goods transport across a border has yet to be simplified,” Sin adds.
The CAMFFA president says there is no common customs system form in the GMS. Therefore, every cargo that passes through a border in each country has to be checked in each country. However, bilateral agreements have been made but getting six countries in the GMS to agree issues is difficult.
“I think that when there are cargo suppliers and demand, GMS members should have a discussion to push this mechanism forward. There should be a guarantee to prevent loss of customs taxes. We will consider whether we want to use the bank or other companies or an international institution to create a guarantee for customs,” he adds.
Sin says that the cross-border transport agreement was initiated several years ago, but its implementation is not feasible because each country has not prepared a system satisfactory to all. He said some countries have just received approval from their governments such as Laos.
Mey Kalyan, a senior adviser to the Supreme National Economic Council in Cambodia, said the slow growth of the implementation of the CBTA among the GMS countries is mainly attributed to budget constraints, the capabilities of implementers and political will among the five Asean members and China.
He said that GMS countries are not widely open yet for transportation across the region. He added that when there is the free flow of cross-border transportation in the GMS, it will also benefit the special economic zones in particular areas located near borders, for example, the Cambodian-Thai border and the Cambodian-Vietnamese border.
Vasim Sorya, a spokesman for Cambodia’s Ministry of Public Works and Transport, says five countries in the GMS region have been implementing the early version of the CBTA from 2019 to 2021. He adds that Myanmar was asked to join by 2021.
Vasim adds that the early CBTA was just to register the vehicles and operators that use cross-border transport. He says that each county allows 500 trucks (passenger and cargo) to cross from one country to another in the GMS region.
Now, each country has registered their trucks. Cambodia has just registered around 20 trucks While Thailand registered more than 470. Thus, all the GMS countries will continue registering more trucks to reach the maximum of 500 trucks.
“After the registration is completed, it will be discussed again and each country will be asked to be allowed to operate both passengers and trucks,” he says. “Thus far, we [Cambodia] are ready in terms of infrastructure and customs procedures, but mostly passenger buses can cross each other’s borders, while, cargo trucks remain an issue,” Vasim adds.
“Our GMS’ custom procedure is different and complicated. We may agree but some other countries do not. It is related to deposits, taxes and smuggling,” Vasim observes.
He adds that regarding the technical aspects, there must be guarantees so countries can deposit money or use international institutions to ensure that cargos are not lost and the country also does not lose customs revenue. Vasim asks who will pay and who will be in charge, who will compensate for any national income losses?
Vasim also says that if the GMS’ cross border facilitation works well, it will help both the GMS and the Cambodian people. “It is a great opportunity for Cambodia to facilitate trade and transport, so investors will think of Cambodia as an investment destination, because we have better logistics, through rail, land, water and other links from one country to another.
“If we have better access in and out, there will be no need for warehouses because transport will be easy, the flow of the supply chain will be fast and the goods can be sold at markets at very low prices. If we need a warehouse, we have to pay the fee for it so the price of a good goes up and then it becomes expensive,” he adds.
“For us, regarding the technical aspect, if we can facilitate it, people will gain advantages. The government sometimes may not get income, but the people will profit. The people can get cheap, fresh and high quality products with no added chemicals so it is beneficial to Cambodians,” Vasim concludes.