Transit

International transit refers to crossing the territory of another state as part of a transport journey. Land-locked countries depend on transit to have access to, and be accessible by, the sea. Transit traffic is subject to multiple domestic regulations and restrictions. It often face delays at border crossings and en-route due to complex formalities and multiple controls. Hence, transit is often said to increase the cost of transportation of goods, so making it more difficult for land-locked countries to compete in foreign markets. On the other hand, transit countries often claim that the transit traffic puts their infrastructure under stress, requiring them to maintain a restrictive regulatory regime. The facilitation of transit traffic is a concern not only for land-locked countries, inspiring the development of domestic, regional and international solutions. =Challenges Faced by Transit Traffic= Transit traffic, in particular by road transport, faces obstacles due to the regulatory framework for domestic and international traffic and the treatment at and behind borders. Regulatory measures covering road transportation include, inter alia, market access regulations, road safety and traffic, social legislation, fuel and infrastructure, environmental and technical standards. " (WTO 2010 Road Freight transport services, S/C/W324, October 2010, page 15, §35).

Market access regulations
A main concern is market access regulations that restrict the possibility to establish and operate road transportation services for transit in the other country's territory. Few countries prohibit international traffic on their territory entirely, but most countries handle international traffic very restrictively. As a consequence, transportation costs increase when vehicles are not allowed to enter a territory thus forcing transshipment of the goods to vehicles registered and operated by a national of the transit country. Or, if vehicles are allowed to enter the territory, the loading of new or additional cargo may be restricted, leading to empty runs that have to be paid for. In most cases, countries enter into bilateral agreements on traffic rights. According to the WTO Secretariat " the road transport regime is made up of thousands of bilateral agreements". These agreements detail the conditions of market access and traffic-sharing between two countries. Quota and permit systems usually accompany such bilateral agreements. In the absence of a bilateral agreement, transit traffic may be authorized on a case-by-case basis. A few road regional agreements have been concluded: Andean Community, SACU; ECMT, etc.

Treatment at border crossing and en-route
Other obstacles faced by transit traffic originate in their treatment at border crossing and en-route. These obstacles include slow and unnecessarily cumbersome clearance of transit traffic, multiple document requirements, controls and inspections, delays and waiting times, and the payment of multiple fees, including transit charges. Transit traffic is also subject to multiple controls, official and unofficial, en-route. Environmental and technical standards are needed here as well. Goods and the means of transport in transit have to be presented to the office of entry/departure. Most countries have a national Customs transit __procedure__ in place, that regulates the movement of the goods and the means of transport across the territory under Customs control. Pursuant to the GATT Article V and the Revised Kyoto Convention, goods in transit should not be subject to payment of duties and other taxes. The transit country may request that a surety, a financial guarantee, may be deposited with the authorities to cover the liabilities of the goods if they were diverted into the domestic market. Different forms of guarantees and securities are used in practice. They are released upon termination of the transit operation. Other aspects of national Customs procedures detail the documents that have to be submitted for the goods declaration, time and itinerary requirements, and other surety measures, such as sealing and escorting. Although GATT Article V stipulates that transit traffic should not be subject to unnecessary delays and controls, the reality is that transit procedures are often cumbersome, lack transparency and uniformity, and create delays. =Solutions= Several efforts have been undertaken at regional and international levels to facilitate transit traffic, by providing freedom of transit and simplifying transit procedures, in particular through cross-border harmonization. Regional efforts include international conventions such as TIR, International Convention on harmonization of cross border transport, and the Revised Kyoto Convention. Much attention has been given to transit and the facilitation of transit traffic in the current negotiations on trade facilitation at the WTO, where transit is discussed under the heading of GATT Article V. Transit traffic is mainly regulated by cross-border agreements: bilateral or multilateral. These agreements cover market access and treatment at and behind borders. They have the potential to facilitate transit traffic through the use of a common transit document, mutually recognized controls and seals, and a cross-border guarantee scheme. Experience with these agreements is however mixed. The TIR system may be the only operational comprehensive cross-border transit regime. Other attempts, such as the TRIE in Western Africa, have been abandoned. Over the past years, the attention of countries and international donors have turned again to the corridor approach as a comprehensive approach to cross-border traffic and transit.