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Trade and Transit Facilitation: Hinterland Connections Report No. 52303-UY Report No. 52303-UY Uruguay Trade and Logistics: An Opportunity Main Report Public Disclosure Authorized April 15, 2010 Argentina, Chile, Paraguay & Uruguay Country Management Unit Poverty Management and Economic Management Unit Latin America and the Caribbean Region Uruguay Trade and Logistics: An Opportunity and Logistics: Trade Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank Public Disclosure Authorized ACKNOWLEDGEMENTS This report has been prepared by a team led by Norbert Fiess (Task Manager, LCSPE) based on contributions from World Bank Staff and consultants during February 2009 and September 2009. The team benefited from the cooperation of various government officials as well as from participants of the private sector, think thanks and academia in various consultations held between March 2009 and August 2009 in Montevideo and Washington, DC. The main contributors to the chapters of the main report were: Chapter I was written by Norbert Fiess (LCSPE) with the contribution of Alberto Portugal (Trade Facilitation, Consultant). Chapter II was written by Norbert Fiess with contributions from Juan Opertti (Business Logistics, Consultant), Bettina Spangulo and Alvaro Lalanne (Data, Consultants). Chapter III was written by Charles Kunaka (Trade Logistics, PREMTR) with contributions from Martin Sgut (Port Infrastructure, Consultant), Inmaculada Martinez-Zarzoso and Gordon Wilmsmeier (Transport Cost Analysis, Consultants). Chapter IV was written Charles Kunaka with contributions from Diego Vallarino and Juan Alberti (Trade Facilitation Audit, Consultants), and Martin Sgut (Hinterland Logistics, Consultant). Chapter 5 was written by Norbert Fiess based on a background study by Gordon Wilmsmeier. Chapter 6 was written by Enrique Fanta (Customs, LCSPS) and Norbert Fiess. Chapter 7 was written by Sebastian Saez (Trade Policy, PREMTR) with contributions from Daniela Alfaro (Domestic Trade Policy, Consultant), Alvaro Ons (Adviser, Ministry of Economia), Marcel Valliant (Trade Policy, Consultant). The report also benefits from contributions by Bernardo Diaz de Astarloa (Trade Statistics, Consultant) and Ana Lariau (LCSPE). The report was enhanced by the valuable comments of peer reviewers responsible for the official review of the documents: Jean Francois Arvis, Esperanza Lasagabaster and Marcelo Olarreaga. PREFACE Selected technical background papers, prepared for this report, are available upon request from the task manager. The report draws on the following background papers: Alfaro, D. (2009): Uruguay’s Trade Policy, mimeo. Casacuberta, C.; Gandelman, N. (2009): Productivity and Trade Related Services in Uruguay, mimeo. Lalanne, A; Ons. A; Spagnuolo, B.; Valliant, M. (2009): Uruguay: Gateway Regional o Hub Intermedio de Transporte Marítimo, mimeo. Maritinez-Zarzoso, I; Wilmsmeier, G. (2009): Uruguay – Evaluation of a country’s potential to develop as a regional logistics hub, mimeo. Opertti, J. (2009): Ciclo de vida de la actividad logística en Uruguay, mimeo. Portugal-Perez, A.; Wilson, J.: Trade Facilitation Reform in the Context of Uruguay, mimeo. Sgut, M. (2009): Uruguay - Trade and Competitiveness Study, mimeo. Vallerino, D.; Alberti. J. (2009): Posibilidades de Uruguay como Centro Logístico Regional, mimeo. TABLE OF CONTENTS EXECUTIVE SUMMARY ....................................................................................................................... i CHAPTER 1: INTRODUCTION ........................................................................................................... 1 1.1. Recent developments in logistics ................................................................................... 1 1.2. Case of Uruguay ............................................................................................................. 3 1.3. A rational for Trade Facilitation Reforms ...................................................................... 4 1.4. The Road Ahead ............................................................................................................. 8 1.5. Scope, Objective and Coverage of the Report ............................................................... 9 CHAPTER 2: BUSINESS LOGISTICS IN URUGUAY .................................................................... 13 2.1. The scope of the industry ............................................................................................. 13 2.2. Evolution of the logistics industry in Uruguay ............................................................ 15 2.3. Towards the Institutionalization of Logistics in Uruguay ............................................ 19 2.4. Transport and Logistics Services: Quantitative Data ................................................... 21 2.5. Conclusion .................................................................................................................... 25 CHAPTER 3: MARITIME TRANSPORT INFRASTRUCTURE AND SERVICES ..................... 27 3.1. Introduction .................................................................................................................. 27 3.2. Port of Montevideo ....................................................................................................... 28 3.3. Port Infrastructure ........................................................................................................ 29 3.4. Shipping Services ......................................................................................................... 33 3.5. Port Management System ............................................................................................. 35 3.6. The Role of Port of Montevideo in the Regional Context ........................................... 35 3.7. Conclusion .................................................................................................................... 38 CHAPTER 4: TRADE AND TRANSIT FACILITATION: HINTERLAND CONNECTIONS .... 39 4.1. Introduction .................................................................................................................. 39 4.2. Road Infrastructure and Transport Services ................................................................. 40 4.3. Railways ....................................................................................................................... 45 4.4. River Transport ............................................................................................................ 47 4.5. Air Transportation ........................................................................................................ 48 4.6. Potential for Multimodal Operations ............................................................................ 50 4.7. Conclusion .................................................................................................................... 53 CHAPTER 5: TRANSNATIONAL INFRASTRUCTURE: INITIATIVES AND CHALLENGES55 5.1. Introduction .................................................................................................................. 55 5.2. Initiative for Integration of Regional Infrastructure in South America ....................... 55 5.3. MERCOSUR initiatives ............................................................................................... 57 5.4. The “Hidrovía Paraguay – Paraná” .............................................................................. 58 CHAPTER 6: CUSTOMS EFFICIENCY AND TRADE FACILITATION .................................... 63 6.1. Introduction .................................................................................................................. 63 6.2. Main problems: bureaucracy and inefficiency ............................................................. 64 6.3. Control and Auditing .................................................................................................... 67 6.4. Single Window ............................................................................................................. 69 6.5. A Customs Transit Regime .......................................................................................... 70 6.6. Human Resource issues ................................................................................................ 70 6.7. Conclusion .................................................................................................................... 73 CHAPTER 7: TRADE POLICY AND LOGISTICS SERVICES ..................................................... 75 7.1. Introduction .................................................................................................................. 75 7.2. Uruguay’s Trade Regime and Logistics Services ........................................................ 75 7.3. MERCOSUR Agreement and GATS ........................................................................... 79 7.4. Comparing GATS and MERCOSUR Commitments in Logistics Services ................. 82 7.5. Regional Transit Regime .............................................................................................. 83 7.6. Conclusion .................................................................................................................... 87 Bibliography ............................................................................................................................................. 93 Annex I: Modal Split and International Trade Structure .......................................................................... 99 Annex II: Trade Policy ..........................................................................................................................
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