China Joins U.N. Trucking Treaty, Embarking on a New Silk Road – Reuters

By Tom Miles

GENEVA – China has made significant progress towards creating a fast new "Silk Road" to Europe by becoming a signatory to a U.N. trucking treaty.

Fifteen years after its accession to the World Trade Organization (WTO), China is optimistic that revitalizing its historic trade route to the west will provide a boost to its sluggish economy.

Joining the TIR agreement, an international guarantee framework that allows Chinese freight containers to travel to destinations like Ireland without undergoing extensive customs inspections, is a vital first step in implementing this plan.

"It’s a key element for the Chinese government. Allowing a container to move through Europe without stopping at multiple borders will significantly reduce costs," noted Christian Friis Bach, executive secretary of the U.N. Economic Commission for Europe, which manages the TIR convention.

China’s envisioned Silk Road to Europe encompasses not only Central Asian countries but also includes Russia and Turkey, along with potential maritime connections to the Gulf and East Africa.

In March 2015, President Xi Jinping expressed his ambition for trade with the involved countries to exceed $2.5 trillion annually within ten years, a goal that follows last year’s trade total of $1 trillion.

Currently, less than 10 percent of Chinese exports to the European Union is transported by truck, with the majority shipped by sea or air.

The International Road Transport Union (IRU), which oversees the TIR, is hopeful that trucks will soon be able to traverse from China through Central Asia to Europe with minimal delays, though random customs checks by border officials will still occur.

Enhanced road transport with reduced bureaucratic hurdles would enable quicker shipping than sea transport for large packages of time-sensitive products like smartphones or fashion goods.

"By truck, one can travel from western China to Europe in 8-12 days," said IRU Secretary-General Umberto de Pretto. "While it is more expensive than shipping, the time savings are tremendous… Waiting times at borders can be reduced to one hour from 3-4 days."

The significance of China’s TIR membership could be profound, particularly if additional partners from Asia and Africa join and if China incorporates this framework for both shipping and rail networks as well.

Pakistan has recently become a member, and India, along with several East African and Gulf nations, has expressed interest in joining.

China deliberated for a decade before committing to the international goods transport convention and will officially become the 70th TIR member next January.

"They have done their homework and they understand the implications," stated Friis Bach.