Dáil Éireann díospóireacht -
Tuesday, 11 Oct 1994

Vol. 445 No. 6

Ireland-Russian Federation Agreement on International Road Transport: Motion.

Minister of State at the Department of Transport, Energy and Communications (Mr. N. Treacy)

I move:

That Dáil Éireann approves the terms of the Agreement between the Government of Ireland and the Government of the Russian Federation concerning International Road Transport, copies of which were laid before the Dáil on 7th October, 1994.

I am pleased to move this motion in this House. The provisions of the international road transport agreement between Ireland and the Russian Federation are an important element of trade between the two countries. In broad terms the agreement establishes the conditions under which Irish international hauliers can operate into, out of and in transit through Russia. Likewise it sets the conditions for Russian hauliers who wish to operate into Ireland.

Trade between Ireland and the Russian Federation continues to grow and has significant potential for further growth as the Russian Federation makes steady progress towards a market based economy. Irish exports to Russia totalled almost £60 million in 1993 and reached £24.0 million in the first two months of 1994 alone. Irish exports from Russia were £25.7 million in 1993.

Revenue and Consultancy has been very satisfactory and many Irish firms and organisations have successfully won contracts in areas such as power, generation, training, agricultural development, transport, aviation, software systems and financial and banking services. The value of contracts won by Irish firms to date exceed 17 million ECU.

Irish exports to Russia in 1994, which continue to be dominated by food and food products, are likely to significantly exceed the value of 1993 exports. Last year saw a noticeable increase in exports of Irish clothing worth £10.4 million and computer equipment worth £8.2 million to Russia, and the indications are that exports in these areas will continue to grow this year. Irish imports from Russia continue to be dominated by raw materials.

Aer Rianta is the biggest Irish investor in the Russian Federation with six joint ventures revolving around its particular expertise with duty free shops. Aer Rianta's operations include duty free shops in Moscow, St. Petersburg and Vyborg on the Russian-Finnish border and retail shops and pubs in Moscow. I am glad that among the joint ventures being undertaken by Irish companies in Russia there is a transport-warehousing-distribution company operated by one of our most prominent international hauliers.

Naturally this increase in trade results in an increased need for freight movements. The agreement concerning international road transport has been negotiated to facilitate such freight transport. Since the agreement was initialled in February 1994 some 33 Russian permits were issued by officials of our Department to Irish hauliers wishing to carry loads directly from Ireland into Moscow. Each journey is a major undertaking. Two routes are followed by Irish hauliers, the first being over land via Poland and Belorussia into Moscow and the second is via ferry from Northern Germany into Finland into Russia through Vyborg, St. Petersburg and on to Moscow. Irish international hauliers find it worth while to undertake those journeys with sensitive computer systems, certain foodstuffs and beef.

A most worth while provision of the agreement is the elimination of a road tax previously demanded by the Russian authorities from Irish hauliers. This road tax was of the order of US $750 per journey and was a significant extra cost on the consignor.

As indicated earlier the main thrust of this agreement is the facilitating of transport operations between the two countries. To that end this agreement provides for the following. Regular transportation of passengers by coach to or through either country by transport operators of the other will be authorised by mutual agreement, with details of routes and schedules exchanged. Permits, to be exchanged by the contracting administration, will be required for non-regular passenger transportation between the two countries. A permit will be required for the carriage of goods by road for hire or reward between the two countries and in transit across either country. A carrier of one country may perform transport operations between the second country and a third country provided any relevant agreements between the second and third country allows such operations. Permits will be issued by the competent authority of one country on behalf of the competent authority of the other country. Certain transport operations will be exempt from the requirement to hold a permit. A carrier of one country will not be allowed pick up goods at a point in the other country and set them down elsewhere in that country, cabotage is prohibited.

There will be a reciprocal exemption from taxes and duties connected with the issue of permits and from vehicle taxes and duties on fuel contained in the standard fuel tanks of a vehicle. Carriers and drivers of either country must, while in the other country, comply with the laws and regulations in force in that country. Penalties may be imposed on transport operators who infringe provisions of the agreement and each party will assist the other in effecting such penalties. Vehicles from one country will respect any limitations on weights and dimensions or restrictions on routes used which may be imposed by the authorities of the other country.

The agreement also contains a protocal which lays down detailed rules for the implementation of this bilateral agreement. I commend this motion to the House.

Mr. Hogan

I wish to share my time with Deputy Carey.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Mr. Hogan

I take this opportunity to express my disgust at the recent stopover visit by President Yeltsin at Shannon Airport and to state categorically that his actions and behaviour are not consistent with the exemplary mode of conduct one would expect from a Head of State. It made the Taoiseach, the Ministers and the battery of officialdom associated with that event look rather foolish nationally and internationally, and that is regrettable.

Mr. N. Treacy

We are not discussing aviation matters.

Mr. Hogan

It must have been particularly distressing for the Taoiseach in view of his enormous efforts to meet the Head of State of the Russian Federation at Shannon. It was an exceptional effort on the Taoiseach's part when one considers that he could find time only recently to meet the Tánaiste and others associated with Government business at airports, such as the recent fleeting encounter at Baldonnel.

It was also appropriate that the Taoiseach should visit Shannon to learn at first hand the difficulties the Shannon region, particularly Shannon Airport, face in future. He will have been made aware on many occasions that great efforts have been made over the last number of years to improve infrastructure at the airport. Various requests have been made to improve the parking area for planes and to upgrade the lighting systems on the runway to facilitate a particular type of aircraft.

Shannon has been to the fore in attracting significant airline business to the area, particularly from East European and Russian states. Transit passenger traffic at Shannon Airport was on a downward slide in 1981 because of the high price of aviation fuel, but the former Minister, Paddy Cooney, concluded a barter agreement with Aeroflot. That is an indication of the type of initial trade and agreements we signed at that time with Russian states, particularly the USSR. The provision of competitively priced fuel allowed charter companies from many countries to use Shannon Airport. Business increased from that initiative and allowed Shannon personnel, through Aer Rianta, to set up many duty free facilities in Russia, Ukraine and other East European countries. I am glad the Minister acknowledged the enormous work carried out by Aer Rianta in developing duty free facilities and significant export business between Ireland and Russia in the past 15 years.

Aeroflot originally operated flights to friendly socialist countries in South America but following glasnost and the Russian acceptance of the free market the Aeroflot conglomerate broke up. In spite of the break-up of the airline and clear indications that business was about to fall off at the time, Shannon Airport was allowed to use this development without a clear picture of the future arrangements between Ireland and Russia in the context of the airline. The Irish Government and the Fianna Fáil Minister then responsible, Deputy Séamus Brennan, did not take accommodating action to meet the new position of the declining business. It is regrettable that Deputy Brennan's successors have made the position worse.

This Fianna Fáil led Government removed the stopover at Shannon Airport despite the promises made by Fianna Fáil before the last general election. It also established the Shannon Task Force but we have yet to see its report. The introduction of another layer of bureaucracy was announced by the Minister for Transport, Energy and Communications, Deputy Cowen, when he stated he would establish an agency to administer a new fund to market the Shannon area in addition to the existing State agency charged with the responsibility of promoting the region and, in particular, Shannon Airport. What is required is not another layer of bureaucracy but the granting of additional powers to the existing agencies in the Shannon area to support development. The Minister is seeking to outgun his Labour Party colleagues in Government by setting up quangos, task forces and committees rather than taking decisive action. It is regrettable that the Minister should have picked the day of Yeltsin's stopover disaster at Shannon to make a wooly statement on this matter. Before any difficulties arose, particularly in relation to Aeroflot, he should have made the statement about his intention to visit the Russian Federation to seek to retrieve some of the business that inevitably was going to be lost. Unfortunately the approach to developments at Shannon Airport has been reactive rather than proactive. Aeroflot has become a major player in the Frankfurt hub at the expense of the Shannon region. I hope the Minister can make up for lost time by retrieving some of that business lost.

The Bilateral Road Transport Agreement between Ireland and the Russian Federation is welcome, but it should be extended to include other forms of transport, including aviation, at the earliest possible opportunity. It is stated that the purpose of the agreement is to facilitate both haulage and passenger operations between Ireland and Russia and to allow transport operators in each country to obtain permits from their transport administration for operations to, from and in transit throughout the other country. That is a welcome development, but unfortunately for transport operators the competition of the Single Market in the European Union and the extension of bilateral agreements are more theoretical than practical. I ask the Minister of State to review the problems experienced by road hauliers throughout the European Union and by Irish hauliers in respect of various member states. The French authorities are notorious for causing delays to Irish road hauliers travelling through their country and do not operate in the spirit of the various European directives put in place in the context of the Single Market.

Ireland, as a peripheral nation, requires the smooth transfer of goods to the European Union and Eastern European countries, as well as to the Russian Federation. I am delighted a bilateral agreement will be formally signed this week to ensure the smooth passage of goods transported from Ireland, Eastern Europe and the Russian Federation states. I hope the Bilateral Transport Agreement between Ireland and the Russian Federation will work smoothly and that, at European Union level, the Minister will air the grievance of Irish road hauliers who travel throughout the European Union.

Mr. Carey

I welcome the proposed establishment of a Bilateral Transport Agreement with the Russian Federation. I am disappointed that some of the terms of the agreement are restrictive, particularly in regard to a carrier not being allowed to pick up goods at one point in a country and set them down elsewhere in that country. I do not understand why the Minister agreed to that restriction when he had the opportunity to secure freedom of the market. Airports and roads have a complementary role to play. Our country is export-oriented and that explains why main road hauliers are located close to airports. For that reason I am disappointed the Minister does not propose to introduce bilateral air freedom rights. The Government has presided over the downgrading of the solid achievements reached between Shannon Airport and Aeroflot. Because of the hesitant attitude of the Department of Transport, Energy and Communications the transport business will go downhill.

Having regard to the increased business Aeroflot has transferred to the Frankfurt hub I would like the Minister to indicate efforts being made by the Government to retrieve the business lost. The road transport agreement will affect haulage travelling to and from Frankfort Airport. Will the Minister indicate whether the prohibition on cabotage will affect calls to the Frankfurt hub which is servicing Aeroflot and how Irish hauliers will be affected?

Mr. Molloy

Ba mhaith liom ar dtús fáilte a chur roimh an conradh seo idir Cónaidhm na Rúise agus an tír seo. Is maith an rud a fheiceáil go bhfuil an dá thír in ann teacht le chéile chun conradh mar seo a chur i bhfeidhm i dtreo is go mbeidh rialacha níos liobrálaí i bhfeidhm nuair a bheidh an dá thír ag trádáil le chéile agus córas taistil éifeachtach ann nuair a bheidh earraí á n-iompar ó thír amháin go dtí an tír eile.

Is comhartha é seo den dul chun cinn atá á dhéanamh sa domhan mór ó thaobh trádála liobrálaigh agus ó thaobh na rialacha a bheith níos oscailte ná mar a bhí siad roimhe seo. Is comhartha é chomh maith den athrú mór atá tagaithe sa Rúis féin. Mar is eol dúinn ar fad tá deachrachtaí faoi leith ag an tír sin an córas nua atá acu a chur i bhfeidhm. Tá súil ag gach duine anseo go néireoidh go geal leis na hiarrachtaí sin i dtreo is go mbeidh an daonlathas chun cinn agus córas oscailte trádála i bhfeidhm taobh istigh den Rúis. Tá súil againn chomh maith go mbeimidne in ann gnó a dhéanamh leo agus go mbeidh siadsan in ann a gcuid earraí a dhíol linn-ne.

Is maith an rud a fheiceáil go bhfuilimid ag díol níos mó earraí don tír sin ná mar atáimid ag ceannach uathu. Tá mí-chothromacht ann ach tá sé inar bhfábhar. Is trua nach bhfuil sé mar sin maidir le gach tír.

I welcome the Bilateral Transport Agreement between the Russian Federation and Ireland and I hope its provisions will help to introduce more liberal trading arrangements between both countries and eliminate difficulties in the transport industry. I hope it will help develop strong trade between both countries and will build on the new relationships Ireland is developing with the Russian Federation.

The amount of trade Ireland has been doing with Russia shows a balance in our favour and I hope that position will continue. We are a small country in comparison to the large numbers in the Russian Federation. At the same time we recognise the exceptional difficulties its government faces in seeking to deal with the massive changes taking place throughout that state, a large territory with a huge population. It is a critical time in the development of Russia and I hope that democracy will be strengthened, that market trading will bring prosperity to its people and that there will be mutual benefit to Irish and Russian people as a result of such bilateral arrangements. Will the Minister avail of this opportunity to inform the House about developments at European level in regard to the liberalisation of the heavy road transport market? I understand Commissioner Oreja expressed disappointment that progress on liberalisation of the heavy road transport market was very slow. The question of driving hours, lorry weights, and tachographs has still not been resolved. These matters are of importance because lorries, buses and other heavy vehicles operating under this bilateral agreement will be affected by the overall regime of controls on heavy transport vehicles. I hope we will see much greater progress in liberalising rules and regulations.

I have read the terms of the bilateral agreement which seems comprehensive. It provides that disputes be settled by mutual agreement, discussion and consultation. I wish both sides every success and offer a welcome to the Russian Minister who is visiting here this week to sign this agreement. I hope this is a sign of continuing development of relationships between our two countries.

Mr. Rabbitte

I too welcome the fact that the Government has chosen to conclude this reciprocal road transport agreement with the Russian Federation almost 20 years after the CSCE Final Act.

The realignments in Eastern Europe pose both dangers and opportunities. It is partly the failure to encourage responsible exploitation of the economic opportunities which has led to the political turmoil currently being witnessed in the Russian Federation. I hope the present agreement will be one of a series of bilateral contacts between Ireland and Russia. The expansion of trade between our two countries builds on the foundation laid by Aer Rianta in the late 1980s and early 1990s. The present agreement offers a wide range of opportunities for Irish exporters as well for hauliers and coach tour operators, opportunities which I hope the Government and its agencies will augment by seeking further niche opportunities for both goods and service exporters as well as expanding tourism between Ireland and Russia and encouraging technology transfer. It is a matter of regret that President Yeltsin's recent indisposition prevented such matters being discussed at the highest level. It is to be hoped that the return visit by the Taoiseach will take place in more propitious circumstances.

The basis for such co-operation on a wide range of matters has already been laid at EU level, not only with Russia but with countries of Eastern Europe in general. During the past few years the value of Irish exports to Russia has, with some intermissions, climbed steadily while changes to the COMECON regulations had further boosted the opportunities for trade, especially in the previous restricted field of information technology. In recent years around 200 Irish companies have explored the opportunities offered by a new and expanding market which is likely to grow in both volume and diversity over the coming years.

I do not know if the Minister will comment on whether the figures he gave in his introductory address concerning the performance of exports for the first two months of this year are likely to be continued for the remainder of the year. It seems that they would more than double our performance of last year if they were to be maintained at the rate of £24 million which the Minister gives for the first two months of this year.

Although welcoming the agreement, I am concerned about some practical aspects. For example, Article 8 stipulates that transport operations covered by the agreement can be performed by carriers licensed to carry out international transport operations in conformity with the internal legislation of their own country. It seems that the widespread breakdown of civil society following the collapse of the Soviet Union makes Russian licensing procedures less than reliable, and I am concerned that Article 8 could endanger Irish road users and could be an imposition on Irish road hauliers. By the same token I would have preferred a stipulation that only international rather than national drivers' licences be accepted within the terms of the agreement. I would also have welcomed restrictions on live animal transport at a time when such transport is being wound down. While such agreements generally conform to a basic blueprint, there is a case to be made for varying the terms according to specific conditions in the other contracting country.

I welcome this bilateral agreement. It is not contentious and I hope it will lead to an enhancement of trade between the two countries. Certainly the trade position as it stands, although relatively modest, is nonetheless definitely biased in favour of this country. I hope that trend continues and that this bilateral agreement makes some small contribution towards that.

Minister of State at the Department of Tourism and Trade (Mr. N. Treacy)

I sincerely thank all Deputies for their very constructive contributions. I reiterate that this agreement is an important element in our trade with the Russian Federation and I can confirm that our Department is currently negotiating similar bilateral agreements with other East European countries such as the Czech Republic, Slovakia, Slovenia and Latvia. We hope to be in a position to start discussions on international road transport with other emerging East European states next year.

I am particularly pleased with the response by our international haulage sector, which has risen to the challenge of carrying freight into the Russian Federation. Each journey is an arduous undertaking which is not without its hazards, not least the poor road infrastructure and often freezing conditions. International haulage generally is a growth area. I am glad to say that Irish hauliers are fully participating in that growth. There are now over 1,800 Irish hauliers with international licences, the highest ever on record. This sector plays an important role in the continuing export drive. As an island nation with an open economy foreign trade is essential if we are to continue to generate wealth and sustain jobs.

Access to markets in the European Union is regulated by community authorisations. Some 1,800 Irish internationally licensed hauliers are in possession of Community authorisations and have unlimited multilateral access to the hauliers in each member state of the union.

I stress the need for Irish hauliers to remain within the law in all respects, whether in the case of road traffic laws, weight requirements or techograph legislation. Compliance with the laws and regulations of each member state should ensure that delays are avoided. Deputy Hogan referred to that matter earlier.

Deputy Carey referred to the lack of cabotage in this agreement. There is no country that allows cabotage to operate internally. One cannot have an international haulier go into another country, pick up goods in that country and set them down within that country. That does not happen anywhere in the world, and rightly, because it would distort the market and put people out of business. The European Union is looking at this question to see if it would be feasible to have a totally open transport market whereby people could operate in any part of the Union at any given time. In so far as we can, we have ensured that any changes in European legislation or in European directives do not mitigate against the progress being made by Irish hauliers across Europe and in all parts of the world.

Mr. Rabbitte

Is the Minister sure about that statement that no country in the world allows cabotage?

Mr. N. Treacy

That is the information available to me and I have never found it anywhere in my 15 months dealing with the situation.

A professional, efficient and competitive road haulage sector is of critical importance to our success as a trading nation. As an essential auxiliary to the productive arm of our economy Irish hauliers deserve our full support. Ensuring that Irish international hauliers have access to haulage markets in the developing Eastern European countries is also of vital importance.

I take this opportunity to pay tribute to the Irish haulage sector, who are a dedicated, professional and committed group. Without their professionalism and dedication and the services they provide we could not continue with the annual increase in exports in recent years. The fact that they service all the industries, move goods out of the country rapidly and bring raw materials back is of vital importance to growth in the economy.

The agreement with the Russian Federation is part of this whole development and I am delighted we have concluded it, it will be signed this week. I was in Moscow last St. Patrick's weekend and was very impressed by the investment being made there by Irish companies, particularly Aer Rianta. Some people who went there to work for that company have gone into business on their own. There is tremendous rapport and co-operation between the Russian and Irish authorities. There is a very positive climate of economic development and training between both countries and this can be expanded and developed. Aer Rianta is a flagship organisation which has done tremendous work for Ireland in many parts of the world, particularly Russia. It has built up tremendous relationships with all the Russian authorities. I again commend this motion to the House for its acceptance.

Question put and agreed to.