•  Variety of modes involved
•  Importance of social and environmental considerations
•  Major implications fro industrial costs
•  Considerable infrastructural requirements
•  Large state involvement
•  Policy stance varies from country to country
•  Difficulties in accurately assessing importance

•  Its role in facilitating free movement of goods and services

•  Size and scale of industry - linkages with other sectors

•  Importance in terms of environment

- responsiblle for 7% of community GNP (5?% agriculture)
- employs 6ml workers (1ml on railways)
- involves 40% of public capital expenditure (11% private)
- community owns 25% of world's fleet

Ireland has an even greater depndence on trasnport (peripheral location) with heavier reliance on sea and air

- 14% total household expenditure: over 60.000 directly employed (perhaps 150,000 in all)
 

Art 3(e) provides for inauguration of common transport policy
 
 

•  Art 84 - provisions should apply to transport by rail, road and inland waterway - council to decide in due course if and how provisions should apply to air and sea

•  Requires common rules for all cross-border traffic (Article 75)

•  Forbids disrimination in transport charges (Article 79)

•  Called for reductions in the costs of crossing frontiers (Article 81)

•  Permits state subidies for the coordination of transport or for public service obligations (Article 77 or as part of regional assistance

Any measures concerning trasnport rates and conditions "shall take account of the economic circumstances of the carriers" (Article 80)

Any measures concerning transport rates and conditions "shall take account of the economic circumstances of the carriers"
 
 

1. A policy focusing on competition


2. The establishment of a common market in transport


3. The pusuit of an active interventionist approach

Council of Ministers failed to reach any consensus upon Memorandum or action Programme

Commission prepared proposals in four areas


1. The control of road and inland waterway transport capacity with the establishment of common rules of entry into industry - community quotas


2. The adoption of a "forked tariff"


3. To harmonise member states' technical, tax and subsidy regimes


4. To co-ordinate investment in transport infrastructure and that each mode contributes fairly to the infrastructure cost it imposes


Little progress made with proposals

•  Little progress made in 60's and 70's


- in Oct.'80, comission proposed a list of 35 proposals to be implemented over next three years

- failure to respond led European Parliamement to instigate action against the Council under Article 175. In May '85, the ECJ issued a ruling agreeing with Parliament

- this ruling and gathering momenetum towards completion of SEM gave added urgency to the need for progress

- subsequently in articles 129b-129d of Traty on European Union, the Community committed itself to active role in the development of trans-European transport networks. To achieve thsi objective it will harmonise technical standards and contribute loan guarantees and interest rate subsidies to national programmes of common interest. Transport infrastructural projects are also eligible for support from Cohesion Fund that the Treaty established

- Nouvelles Frontieres case very important in sparking a desire for change

• Infrastructure


- fixed capital of any trasnport system and includes the provision of ports, airports, roads and railway lines

- attempt to identify state aids and subject them to community control e.g. standard establishing a standard accounting system for expenditure on infrastructure

- Commission argued that prices should reflect marginal social cost (taking into acount congestion, acidents, noise and pollution) Significant difficlties arising from such proposals which would have greatly increased costs e.g. roaf freight
 
 

•  Finance and Investment


Commission identified projects with important Community benefit for which finance would be made availabale (e.g. EIB and ERDF)

- projects within a member state designed to eliminate bottlenecks in EU traffic
- cross-frontier projects
- projects fulfilling broad Comunity objectives
- projects which standardise the EU transport network
 
 
 

 Technical Measures - maximum weights and standards, safety measures

 Social Legislation - mutual recognition of driving periods etc.

 Taxation - atempts to bring taxation more in line with each other

Comunity quota - increased by 40% each year from '87 - '92

Abolition of remaining quota 1st Jan. 1993 - also abolition of frontier checks on goods crossing from one state to another

Cabotage introduced since DEC. '89 - still some limits apply

Easing of restrictions for international coach and bus passenger services
 
 

• Have advantages in terms of energy saving, low use of space, safety and environment

•  Drop from 1/3 to 1/6 of total freight transportation since 1965

•  Proposals for development of high speed rail network - TGV (French) and AVE (Spain) - ETR (Italy)

•  Global plan for railways - commercial operations, administrative procedures, improvement of finances, rail safety etc.

• Development of combined road-rail transport

•  Facilitating activities outside national borders

• 1/3 of internal trade and 90% of external trade carried by sea


- tonnage halved between 1980 and 1988 due to competition

- consultation procedures in shipping relationships with 3rd countries since 1977

- 1986 - proposals for gradual implementation of free movement of services and abolition of national preferences
 

•  countervaling charges against unfair practices


- 1989 - proposals to improve competitiveness

- creation of community flag with advantages for those registering (i.e. cabotage rights)

- exceptions on shipping services to islands till '9 and Grece till 2004
 

•  Chicago Convention '44


- identified five main freedoms

1. The right to overfly states' territories

2. The right to land for technical reasons e.g. refuelling

3. The right to land to disembark passengers and cargo travelling from the country of the airline's registration

4. The right to pick up passengers and cargo for journeys to the country of an airline's registration

5. The right to transport goods and passengers between two countries other than the country of registration

Signatories of the Convention granted the first two rights to all other signatories, but teh remaining rights were determined by bilaterla agrements (e.g. the 1946 Bermuda Agreement between teh UK and the US)
 

IATA formed in 1945

In 1989 of the 750 non-stop short haul flights in Europe, 71% had only one carrier and a further 24% only two

- fares 45-75% above those in the US
 
 

•  1979 - first clear commitment to competition


- importance of charter airlines
- growing liberalisation in US
- regional initiatives
- Nouvelles Frontieres case 1985
 
 

•  1st Aviation Package - 1987


- block exemptions for categories of agreements
- measures to reduce capacity to fix fares (discounting allowed)
- greater access in stages for new airlines (bi-lateral sharing, additional airlines on routes on bilateral basis, fifth freedom rights)
 
 

•  2nd Aviation Package - 1991


- extended block exemptions
- commitment to end capacity sharing agreements
 
 

•  3nd Aviation Package - 1993


- uniform criteria for air transport operators licenece
- EU opened to all licensed operators
- Limited cabotage till 1997 (after which full cabotage)
- all controls on fare levels removed
- all controls on non-sceduled services removed
 
 

•  Industry Restructuring


- distortions from state subsidies remains
- mergers
- landing slots
- air traffic control
- air safety
 
 

Problems - distance from major markets
- isolation be sea
- poor qualiy of infrastructure

This leads to significantly higher transport costs for Irish operators

- Heavy emphasis on transport in development plan
- Nearly £1bl earmarked for roads 1989 -93

Access transport - airports, seaports, air and sea services

Inland transport
Shuttle services

Implication of channel tunnel
 

- The integration of modes of transport so as to form aunified
-
- The integration of national transport networks into a coherent network structure

- Certain social priorities

- Transport volumes to rise 30% (1992 - 2000)

- New links required

- Channel Tunnel and high speed train services

- Trans-European Networks