A regularly updated article featuring recent and forthcoming legislation affecting the EU, compiled by Paul Clarke.
No clarity on Brexit in UK ports
Welcoming the draft Brexit deal struck between the EU and the UK Government (although not yet finalised), the British Ports Association (BPA) said it was hopeful that the agreement “will include some kind of lasting solution which would rule out the need to introduce new customs and border checks for UK-EU trade”. The Association did, however, warn that it could be some time before the impact of what a final deal will mean for ports becomes clear. BPA Chief Executive Richard Ballantyne said that there could be some way to go before ports and freight operators will know exactly what the trading environment will be. “The political situation being such as it is means that there are still several stages that the proposals will need to pass through,” he explained.
That means, added Mr Ballantyne, that hauliers and freight operators using the UK’s network of roll-on roll-off (ro-ro) ports such as Dover, Holyhead, Immingham and Portsmouth will continue to be unsure what the post-Brexit border processes will look like. Brexit could be relatively non-eventful for ports handling bulk loads or containers because exiting processes and systems should be easier to adapt, he suggested, but accommodating new customs and regulatory controls at both UK and EU ro-ro ports could be much more challenging. That is because they collectively handle tens of thousands of both driver accompanied and unaccompanied lorries and trailers travelling between the UK and the EU each day. In the view of the BPA, the potential for new time-consuming and costly processes remains a daunting prospect. The BPA also took the opportunity to point out that a final Brexit deal might present opportunities to review EU legislation such as the Port Services Regulation and to create a planning and consenting regime more conducive to port development, activities and trade.
HMRC advice if you only trade with the EU
HM Revenue & Customs (HMRC) has published (available here) an advice letter aimed at EU-only traders in the UK (but not Northern Ireland). This points out that, although a deal on a withdrawal agreement has been reached, until it has been ratified by both the UK and European Parliaments the Government will continue to plan for both deal and no-deal scenarios. It therefore urges businesses to continue their own planning for the possibility of no deal and suggests three actions traders should take immediately, if they only trade with other EU Member States. They should:
register for a UK Economic Operator Registration and Identification (EORI) number at www.gov.uk as they will need this number to continue to import or export goods with the EU after 29 March 2019, if the UK leaves the EU without a deal; one will also be needed before they can apply for authorisations that will make customs processes easier — although more information on this possibility will be made available by HMRC early next year
decide if they want to hire an agent to make import and/or export declarations or if they want to make these declarations themselves (by buying software that interacts with HMRC’s systems); if they decide on the former, they should contact an agent to find out what information they will need; if the latter, they should talk to a software provider to find a suitable product, depending on whether they import, export or both
contact the organisation that moves their goods (for example, a haulage firm) to find out if additional information will be needed so that the safety and security declarations for the relevant goods can be made, or whether traders will need to submit these declarations themselves.
A similar advice letter addressed to EU-only traders in Northern Ireland can be found here.
Warehouse boss warns of no-deal Brexit
The CEO of the UK Warehousing Association (UKWA), Peter Ward, has responded to media reports of possible food stockpiling and consequent shortages in the event of the UK leaving the EU without an agreement or a transition period. With supply chain disruption likely across all sectors, he accepted that businesses are likely to respond by holding more stock in the supply chain, moving away from the current just-in-time model. However, Mr Ward warned, this will not be as straightforward as it sounds. He highlighted that visitors to the Association’s website searching for warehouse space during September and October 2018 was up by 60%, compared to the same period last year. As well as lack of space, businesses must also factor in the estimated 200 million extra customs declarations that may need to be processed post-Brexit. The potential impact of this can be seen, Mr Ward explained, when taking into account that half the food consumed in the UK is imported with 80% of it coming from the EU and 90% of those imports coming through the Dover corridor. Should World Trade Organization (WTO) rules be applied, Mr Ward pointed out, new food inspection facilities will be required; and to keep the vital Dover corridor clear post-Brexit these may have to be located inland.
UK aims to stay in international procurement agreement
Worth an estimated £1.3 trillion annually, the Government Procurement Agreement (GPA) opens 47 national markets to competition, including government purchases in these countries of goods and services, including construction. Managed by the World Trade Organization (WTO), the Agreement has 19 signatories, one of which is the EU. It is the UK’s membership of the EU that has given its access to the GPA for over 20 years. With Brexit scheduled for 29 March 2019, the UK opened negotiations on independent membership of the GPA this June and its application has now been approved by other members of the GPA Committee. Describing the approval as an important step, International Trade Secretary Liam Fox said that continued participation will give UK businesses the certainty they need to continue accessing overseas procurement markets.
MPs warn of lack of no-deal Brexit plans
The level of secrecy surrounding no-deal Brexit preparations being made by the Department for Transport (DfT), coupled with a lack of information about the progress being made, is a potentially toxic combination. That is the view of MP Meg Hillier, who chairs the Public Accounts Committee (PAC) at the House of Commons. Commenting on the Committee’s latest assessment of the DfT’s implementation of Brexit, Ms Hillier stressed that the future of road, rail, maritime and air access to Europe after Brexit remains unclear and that the Department has a critical role in ensuring the UK is prepared.
The PAC has learned that, although the Department plans to spend up to £35 million this year to manage traffic and lorry-queuing at Dover (an initiative known as Project Brock), it has not yet carried out desk-based testing of the system and has largely failed to engage with businesses. In particular, a lack of detailed information provided to businesses and the use of non-disclosure agreements are hampering their ability to plan for Brexit, the report warns. While acknowledging that the DfT is in a difficult situation in having to prepare for all Brexit scenarios, the Committee argues that the Department must be open about the challenges it faces and work with businesses and interested parties to help them get ready for whatever the future brings. Even if a deal is agreed, the Department faces a challenging workload during the proposed transition period and faces an uphill task to pass the necessary legislation in time. The full report is available here.
Government legislates for trade after Brexit
Amid all the arguments about how the UK will leave the EU, it is clear that there will be a significant impact on trade and that the Government will have to amend the 40 years of legislation that has accrued since the UK joined the EEC. That process is now underway and a number of items of statutory instruments have appeared recently that aim to prepare the legislative framework for trading after Brexit.
The Wharves, Examination Stations and Temporary Storage Facilities (Approval Conditions) (EU Exit) Regulations 2018, for example, require temporary storage facilities (transit sheds), airport examination stations and approved wharves to provide the amenities necessary for the conduct there of import and export customs formalities and other controls.
These are binding conditions of their approval if given by HM Revenue & Customs (HMRC) after the UK leaves the EU.
The Wharves and Temporary Storage Facilities (Approval Condition and Transitional Provision) (EU Exit) Regulations 2018 allow HMRC to require a place to be equipped for full compliance with customs import and export requirements (such as storage and declarations) before it is approved for UK customs purposes as a wharf or temporary storage facility (transit shed).
Under these regulations, existing approvals as wharves or places for temporary storage under the Community Customs Code will become, respectively, UK approved wharves or UK temporary storage facilities.
The Customs (Contravention of a Relevant Rule) (Amendment) (EU Exit) Regulations 2018 make amendments to the secondary legislation imposing civil penalties on those who contravene customs rules relating to the import of goods into the UK in order to ensure that there is a functioning penalty regime following exit day in the event that the UK leaves the EU with no deal.
Majority of businesses have no Brexit plan
Despite the UK’s intention to leave the EU having been headline news almost daily for the past two years, more than half of businesses have not yet made any Brexit plans. That is the finding of a new poll conducted by the Brexit Business Guide, which describes itself as a hub sharing practical tips from specialists to help UK business leaders prepare for the impact of Brexit. Although based on an extremely small sample of just 51 business leaders and professional advisors, the poll found that 56% of respondents have not yet started to make plans for the impact of Brexit on their business. That, suggested the Brexit Business Guide, could be because a majority (68%) of those questioned did not believe that a deal would be completed by March. Given that an agreement between the UK and the EU has now been reached (if not yet backed by Parliament), it remains to be seen how those businesses respond.
The main Brexit-related concerns expressed by respondents were a loss of customers or business (68%) and increased costs (48%). Also on their list of concerns were the impact on international trade (32%), currency risk (28%), compliance (28%) and managing cash flow (24%). “Understanding the ramifications that the departure from the single market can have on your businesses’ trade, legal, and financial standing is not only crucial to success, but can also determine whether or not you need to shift your commercial objectives,” Chris Southworth, Secretary General of ICC UK, said. His view was echoed by Simon Willmett, CFO of Nucleus Commercial Finance, who said that the data reflects the reality that many businesses are underestimating their exposure to Brexit. “Even businesses who aren’t working directly with overseas suppliers or customers can be impacted by currency fluctuations, slim margins and increased trade costs further down their supply chain,” he explained.
UK signs customs deal with Crown Dependencies
The UK has agreed post-Brexit customs arrangements with the Channel Islands and the Isle of Man. Known as the Crown Dependencies, the Channel Islands (which comprise the Bailiwicks of Jersey and Guernsey) and the Isle of Man are not legally part of the UK, but are self-governing possessions of the British Crown. Ahead of the UK leaving the EU on 29 March 2019, the Government has signed new arrangements with the Crown Dependencies in order to maintain and reaffirm the existing close customs relationships. The agreements will make sure that, after Brexit, traders moving goods between the UK and Crown Dependencies (and vice versa) will continue to pay no customs duty, and the UK and the Crown Dependencies will maintain a common external tariff. They will enter into force when the UK and the Crown Dependencies leave the EU Customs Union and are, notes the Government, compatible with any future agreement on customs reached with the EU.
Celebrating the Single Market
Prime Minister Theresa May might not agree, as she made leaving the Single Market one of her so-called red lines, but the European Commission argues in a new paper that it “provides a unique springboard for European companies to expand their activities across borders”. By offering firms access to a large and competitive market and by eliminating barriers that impede their growth and their efforts to innovate and to expand, it goes on, the Single Market has boosted the competitiveness of industry. Marking the 25th anniversary of the Single Market project (welcomed in her day by the UK’s previous female Prime Minister), the report describes the current state of play and highlights the benefits for citizens, consumers and businesses. It also emphasises the need for more effective implementation, application and enforcement of the rules governing the Single Market.
As the UK prepares to leave the EU, the Commission notes that a recent Eurobarometer poll showed that the freedom to live, work, study and do business in other Member States is supported by 82% of Union citizens. That, it observes, is the highest level of support for any EU policy. There is, however, a need for Member States to renew their political commitment to the Single Market, the Commission believes, and it sets out three main areas where further efforts are needed. They are: to swiftly adopt legislative proposals that have already been put forward; to ensure that the rules deliver in practice and actually work on the ground and to continue to adapt the Single Market, particularly in relation to services, products, taxation and network industries. The Commission paper, The Single Market in a Changing World: A Unique Asset in Need of Renewed Political Commitment, can be found at eur-lex.europa.eu.
Reducing technical barriers to trade
It has been frequently argued during the Brexit debate that technical barriers to trade — such as imposing different standards or certification on products — can cause more problems than simply imposing tariffs. The World Trade Organization (WTO) has recognised the problem and some years ago it set up a Committee on Technical Barriers to Trade (TBT Committee) to look for solutions. It is now hailing a breakthrough after the Committee agreed a list of recommendations that aim at reducing obstacles to trade and improving implementation of the WTO’s TBT Agreement (which entered into force in 1995). There are two key ways by which the Agreement promotes transparency. The first is through the practice of regular notifications by members of technical regulations and conformity assessment procedures. The second key promoter of transparency is the obligation for each member to establish an enquiry point capable of answering questions relating to its implementation of TBT transparency obligations.
At the latest meeting WTO members agreed on almost 30 recommendations that will improve the way standards, regulations and trade are dealt with in the TBT Committee. In addition, the Committee welcomed a new best practice guide for national TBT enquiry points. This 100+ page document can be found here. It is structured according to the tasks that an enquiry point or other governmental entity might normally undertake when implementing the TBT Agreement’s transparency provisions. The guide includes insights ranging from different models for co-ordination with domestic stakeholders to useful tips on how to complete the TBT notification format.
EU gets tough on unwanted imports
The European Parliament, the Council of the Ministers and the European Commission have reached agreement on introducing what is known as an EU horizontal safeguard regulation. This technical term refers to legislation intended to make it easier for the Union to react in case of a sudden surge of imports under bilateral trade agreements with non-EU countries, thus preventing possible negative economic effects. The bilateral trade agreements negotiated by the EU usually contain safeguard mechanisms allowing the EU to temporarily reintroduce custom tariffs when imports under the agreement reach an unexpectedly high level which leads to serious economic damage to an EU industry.
To make these mechanisms operational, the EU must put in place internal rules and procedures defining the investigation and the decision-making process, as well as the form and duration of the measures. That is the purpose of the proposed legislation (available at eur-lex.europa.eu). The first agreements to be covered by this new regulation will be, if the European Parliament gives its consent, the EU trade agreement with Japan, followed by the trade agreements with Singapore and Vietnam.
In the past, the EU adopted separate regulations for the implementation of the bilateral safeguard clauses for each individual trade agreement, even if the rules put in place for each agreement were very similar. According to the Commission, the process will now become more efficient and more coherent as the same rules will be applied under all future EU trade agreements.
EU trade talks with Mercosur go on, and on
The famous prediction that UK trade talks with the EU could be completed in an afternoon looked fairly unlikely when it was made and seems even more so as the complications of agreeing trade deals have become more apparent. It may be that when, and if, the two sides do get down to serious discussions about trade, the talks will go more smoothly than those setting up the UK’s withdrawal agreement. But the complicated nature of trade means that there should be no expectation of a swift and easy conclusion. As an example, the EU’s attempts to conclude a trade agreement with the Mercosur countries should offer a warning.
Sometimes known as the Southern Common Market, Mercosur was created by Argentina, Brazil, Paraguay and Uruguay in March 1991 with the signing of the Treaty of Asuncion. It has been in serious discussions with the EU about a Free Trade Agreement (FTA) since the adoption of the so-called Rio Programme in July 2002 although talks to conclude an Association Agreement actually started in the last century (June 1999). The 36th negotiation round between the two sides took place in Brussels in November 2018 with details of what was agreed, available at trade.ec.europa.eu. To give some idea of why these talks are so complicated and prolonged, that meeting discussed: trade in goods; wines and spirits; rules of origin; technical barriers to trade (including an Annex on motor vehicles); services and establishment; government procurement; intellectual property (including protected geographical indications); trade and sustainable development; state-owned enterprises and subsidies.
British exports support millions of jobs
A new analysis by the European Commission reveals the extensive links between exports and jobs in all the Member States, including the UK. In total, global exports from the EU support 36 million jobs across Europe and generate €2.3 trillion of value added. In its new report, EU Exports to the World: Effects on Employment (which can be found here), the Commission states that exports from the UK to countries outside the EU support 3.75 million jobs in this country. A further 650,000 people in the UK are in jobs linked to exports from other EU countries to countries outside the Union, which means that 14% of British jobs depend on EU exports. In addition, the report goes on, British exports to countries outside the EU support more than 426,000 jobs across the rest of the EU. Furthermore, since 2014, the number of jobs supported by exports has increased by 3.5 million. In an associated study, EU Exports to the World: Effects on Income (available here), the Commission finds that 77% of export-related jobs in the UK are in services and that most people employed in export-related jobs are classed as medium-skilled workers.
East of England reaches out to China
Business and political leaders from the Eastern region have launched the East of England China Forum which aims to stimulate inward investment, tourism, student numbers and export opportunities with China. The initiative is facilitated by London Stansted Airport, which is targeting additional long-haul routes, including China, to add to its growing network of 200 destinations. The Forum brings together business groups, county councils and local government, tourism agencies and universities to work together on building relationships and to support the drive to secure a direct Chinese air link. It will also provide a focus for organisations looking to increase their connectivity with China and to encourage more businesses to explore opportunities in China.
CEO of London Stansted Ken O’Toole said: “Our expectation is that today’s launch will eventually culminate in the securing of a direct link between Stansted and China. Certainly on the basis of the discussions we are already having with a range of Chinese carriers, I see no reason why Stansted cannot be the Chinese gateway to the East of England for investors and tourists looking to take advantage of all the exciting opportunities available to them.” Essex County Council has been instrumental in the formation of the new Forum. Its Deputy Leader, Councillor Kevin Bentley, said that the Council’s 30-year partnership with Jiangsu will be opened up to benefit the whole of the East of England. Businesses in London and the East of England interested in joining the Forum are invited to email at email@example.com.
Scots fear trade could be hit by Brexit deal
More than half of Scotland’s international exports in 2016 were to the EU or countries with an EU trade deal and Constitutional Relations Secretary Michael Russell is worried that the UK Government’s draft Brexit deal could put this trade in jeopardy. Describing the agreement recently reached by Prime Minister Theresa May as a blind leap into the unknown, he said: “Scotland exports more to the EU than the United States, Asia, South America and the Middle East combined. It is our single most important international market and supports thousands of jobs.” The UK Government’s proposed withdrawal agreement would, he went on, take Scotland out of the European Customs Union and Single Market with no certainty over future trading arrangements.
Scottish exports to the EU were worth £12.7 billion in 2016, which represented 43% of Scotland’s international exports. A further 12% of exports, worth £3.7 billion, were to countries with which the EU has a trade agreement. “Despite previously promising frictionless trade,” Mr Russell said, “the UK Government’s draft deal would mean barriers to exports and the loss of the EU’s trade agreements with around 40 countries that we currently benefit from.” He said that the Scottish Government would now “work with others” to put in place a deal that works for Scotland within the European Single Market and Customs Union and that supports another referendum on EU membership.
New Zealand consults on FTA with the UK
The New Zealand Government has decided to canvass views about a post-Brexit free trade agreement (FTA) with the UK by issuing a call for written submissions. Available at www.beehive.govt.nz, this includes a comment from Trade and Export Growth Minister David Parker who said: “The UK is one of New Zealand’s oldest friends, and a free trade agreement makes a lot of sense. Our shared history, similar legal structures and openness to trade mean a high quality, comprehensive and progressive free trade agreement is a natural next step after Brexit.”
New Zealand said that it will seek an agreement that safeguards high standards and protections for labour and the environment, and also promotes gender equality and indigenous rights, among other things. The move has been welcomed by International Trade Secretary Liam Fox as it reinforces existing commitments by both countries to begin negotiations after the UK has left the EU. The trade of goods between the UK and New Zealand was worth £2.72 billion last year, with British exports increasing by 10% in 2016. Mr Fox argued that a deal with New Zealand would pull British businesses closer to the rapidly-growing Asia-Pacific region. He pointed out that the Department for International Trade (DIT) has already held four public consultations on new FTAs with the USA, Australia and New Zealand, as well as potential accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
WTO launches new trade statistics portal
The World Trade Organization (WTO) has launched a new online database which may be useful for those involved in international trade. Bringing together a wide range of statistical indicators on trade between WTO members and other related information, the WTO Data portal allows users to find both annual and short-term data on trade in merchandise and commercial services. It also provides information on bound, applied and preferential tariffs, non-tariff measures and Foreign Affiliate Trade Statistics (FATS — which give details about the economic operations of foreign direct investment-based enterprises). Available at data.wto.org, the new portal replaces the existing Statistics Database, which is scheduled to be decommissioned by January 2019.
The new interface retains data retrieval functionalities from current databases, the WTO explains, while also adding new features such as pre-built indicators to make data selection easier. Users can now customise the data display in rows and columns and can benefit from a number of resources aimed at helping them use the new portal, including: a User Guide offering assistance with the main function; a Database Inventory giving an overview of the full list of indicators available in the database, with their frequency of update and coverage details; and Technical Notes providing detailed information on indicators’ definitions, sources and compilation methods. Although the main database page itself appears not to mention them, economy-based profiles that were previously accessible as links on the former Statistics Database can still be accessed directly. They are: Trade Profiles, Tariff Profiles and Aid for Trade Profiles. Links to them are provided at www.wto.org.
US hints at removing China from the WTO
The Office of the United States Trade Representative (USTR) has released a report updating information on its section 301 investigation of China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual Property and Innovation. Sections 301 to 310 of the United States Trade Act of 1974 are commonly referred to as “section 301”. It is one of the principal statutory means by which the USA enforces its rights under trade agreements and addresses “unfair” foreign barriers to its exports. China has been a major target of section 301 actions going back at least into the 1990s, but the Trump administration has increased the pressure on what it sees as China’s unreasonable practices. The latest report, which can be found here, points out that US trading partners, including the EU, have indicated that they share the concerns about China’s technology transfer regime and the types of acts, policies and practices in which that country engages.
“The Chinese government has persisted in using foreign investment restrictions to require or pressure the transfer of technology from US companies to Chinese entities,” it goes on. The report highlights the concluding remarks in the World Trade Organization (WTO) 2018 Trade Policy Review of China — and the more than 1900 questions raised by other members — and argues that they indicate that concerns about China’s role in the global economy are widespread. The Chairman of President Trump’s Council of Economic Advisors, Kevin Hassett, has suggested that there could be a case for “evicting China” from the WTO. Presenting the latest report, US Trade Representative (USTR) Robert Lighthizer said: “China has not fundamentally altered its unfair, unreasonable, and market-distorting practices.”
Road transport group backs Air Waybill
The electronic Air Waybill (e-AWB) will become the default contract of carriage for all air cargo shipments on trade lanes from 1 January 2019. The International Air Transport Association (IATA) said: “This key industry milestone ushers air cargo into a new era where digital processes will be the norm and paper processes will be the exception.” The e-AWB is now the critical air cargo document, IATA explained, as it constitutes the contract of carriage between the “shipper” and the “carrier” (airline). The Multilateral e-AWB Agreement, IATA Resolution 672, provides a single standard agreement that airlines and freight forwarders can sign once with IATA and start using e-AWB with all other parties to the agreement.
The International Road Transport Union (IRU) has welcomed the news, highlighting the road transport industry’s equivalent — the electronic consignment note (e-CMR) — as the pathway to digitising road transport operations. IRU’s Global Innovation lead, Zeljko Jeftic, explained: “For the benefits to be truly felt, all industry modes need to go hand in hand when it comes to digitalisation in order to enable more efficient intermodal operations. e-AWB is indeed not new, but what is new is that air freight aims at swift progression towards 100% uptake.” He pointed out that a large part of air freight in Europe and beyond is carried by truck through Road Feeder Services, with these trucks even included in flight schedules. However, Mr Jeftic went on, as soon as the highly digital air freight industry hits the road, it faces delays as a result of requirements for paper documents, such as consignment notes. “The widespread adoption of e-CMR is therefore a priority for the industry,” he concluded.
Deal or no deal
In the face of ministerial resignations — three at the time of writing — Prime Minister Theresa May has urged MPs to back the 585-page draft Brexit agreement she has agreed with Brussels. This is aimed at ensuring a smooth breakup in March 2019 and providing a transition period for both sides to adjust to the changes. It also includes a brief outline of what the future relationship between the UK and the EU might look like. Unfortunately for Mrs May, having seemingly brought her Cabinet on board with the deal, one of the resignations was her Brexit Secretary — Dominic Raab — who had, in theory at least, been in charge of completing the negotiations with the EU after his predecessor, David Davis, resigned over the so-called Chequers agreement. In his resignation letter, Mr Raab described “fatal flaws” in the agreement.
With the hard-core European Research Group (ERG) Brexiteers firmly against the deal, the DUP (on whom the Prime Minister has been relying for a parliamentary majority) crying betrayal and the Labour Party and SNP also set on voting against her agreement, it is hard to see where Mrs May goes from here. When she first presented it, she said what was on offer was the choice between her deal, no deal or not leaving the EU at all; it remains to be seen which way Parliament decides to jump. If you would like to make your mind up, the full document can be found here.
Trade in the event of a no-deal Brexit
In previous reports, we have covered two batches of technical notices on planning for what the Government continues to refer to as the unlikely event of the UK leaving the EU without a deal being agreed. A third batch of 29 notices covers an even wider range of sectors including consumer rights, the control of mercury and meeting climate change requirements. They can all be found in a list integrated with the previous batches of notices at www.gov.uk. While advice on topics such as meeting rail safety rules and standards and regulating pesticides are unlikely to be of interest to traders, there are several items in the third batch which do directly concern them.
The following notices will be of interest.
Export and import of hazardous chemicals
Describes how the UK will replace the EU’s PIC Regulation (649/2012) which implements in Member States the international Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade with an independent stand-alone PIC regime.
Existing free trade agreements
In the event of a “no deal”, there will be no implementation period. In this scenario, the Government will seek to bring into force bilateral UK-third country agreements from exit day or as soon as possible thereafter. These new agreements will replicate existing EU agreements and the same preferential effects with third countries as far as possible.
Exporting GM food and animal feed products
With regard to genetically modified (GM) food or feed, if the UK leaves the EU in a “no-deal” scenario, businesses will need to be established in the EU or European Economic Area (EEA), or have a representative that is established in the EU or EEA if they wish to trade in the EU.
Exporting objects of cultural interest
In Autumn 2018, a statutory instrument will be laid to revoke the relevant EU regulations in relation to the cultural objects export licensing system on exit day. From that date, if there is no deal, businesses would need only a UK licence to export cultural objects from the UK to any destination and the Department for Digital, Culture, Media & Sport (DCMS) will stop issuing EU licences.
Importing high-risk food and animal feed
Currently, the EU decides what specified food and feed not of animal origin (FNAO) is to be considered high risk. In future, on any imports to the UK from the EU and third countries, this will be for the UK to decide. Import controls would be risk-based. Broadly, because the risk does not change on day one, no new controls are planned for imports from the EU of food and feed currently categorised as high risk.
Maintaining the continuity of waste shipments
In the event of no deal, UK exporters would need to familiarise themselves with the customs guidelines the EU has laid down for imports of waste from outside the EU.
The UK will look to carry over all EU trade and financial sanctions at the time of Brexit. It will implement sanctions regimes through new legislation, in the form of regulations, made under the Sanctions and Anti-Money Laundering Act 2018.
Trading and moving endangered species
Covers trade in plants and animals which are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
Brexit delays are a threat to trade
Speaking before the Prime Minister revealed details of the deal she had agreed with the European Commission, two of the UK’s leading trade groups issued warnings that continued lack of progress in Brexit negotiations was having a negative effect on investment decisions and called on the Government to stop kicking the can down the road. Head of European Policy at the Freight Transport Association (FTA), Pauline Bastidon, said: “While the logistics industry understands negotiations are complex, politically-sensitive and time-consuming, there are massive decisions which need to be made urgently by companies and cannot be left to the last minute.” With even the transition period not yet a certainty, she went on, companies are left with two options: invest in and implement contingency plans that might not be needed if an agreement is reached; or take no action and risk being unprepared in the event of a No Deal exit. Calling for greater co-ordination, Ms Bastidon said: “Authorities need to be allowed to exchange information on the expected location of controls, traffic management and other measures taken to mitigate the impact of border delays in order to minimise disruptions on the flow of goods.”
Her gloomy forecasts were matched by the CBI with Director-General Carolyn Fairbairn warning that the speed of negotiations is being outpaced by the reality firms are facing on the ground. A CBI survey of 236 firms, representing 101 large companies and 135 SMEs, has revealed that the majority will implement damaging contingency plans in the absence of greater certainty on Brexit by December — including cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating production and services overseas. “Unless a Withdrawal Agreement is locked down by December, firms will press the button on their contingency plans,” Ms Fairbairn said. “Jobs will be lost and supply chains moved.” It remains to be seen whether the deal agreed by the Cabinet will meet their demands.
Freight forwarders to benefit from Brexit funding
The Government is to invest £8 million to help customs brokers, freight forwarders, fast parcel operators and other intermediaries prepare for Brexit. The move comes after concerns were expressed to the Treasury and HM Revenue & Customs (HMRC) about how customs broker services would cope with extra demand caused by a no-deal Brexit. Announcing a package of measures, the Financial Secretary to the Treasury, Mel Stride, said that the Treasury and HMRC will be providing money to support customs training and automation. Funding will be used, in part, to provide grants for intermediaries and/or traders to help them manage the upfront costs of training staff. With intermediaries using both internal and/or external training providers, the grants are intended to promote greater investment in training. There will also be a grant scheme to support investment in automation in the intermediaries sector.
With upfront cost cited as a key barrier to automation — particularly for smaller businesses — the aim is to improve the productivity of smaller intermediaries that rely on manual data input to complete customs declarations by helping with the set-up costs of the technology required. In addition, the Treasury and HMRC will be setting up a procurement process to establish contracts with training providers to create and deliver courses for customs brokers to help them cope with a no-deal outcome. The procurement process is expected to start in the coming weeks, with the grant schemes to support upfront costs anticipated to be available in late autumn. Further details will be made available in due course.
How to trade if there’s a no-deal EU exit
HM Revenue & Customs (HMRC) has made available online what it calls a partnership pack consisting of 20 “high-level guides” to help those working with businesses be more aware of customs processes and procedures that are likely to apply in a no-deal scenario. As was the case with the batches of technical notices published on recent months, the pack comes with a cautionary note from the Government: “It has always been the case that as we get nearer to March 2019, preparations for a ‘no deal’ scenario would have to be accelerated. Such an acceleration does not reflect an increased likelihood of a ‘no deal’ outcome.” HMRC suggests that those using the pack should think about how they will need to adapt their business to comply with new systems, processes and controls. They should also assess the impact of the increased demand for customs declarations on their business and consider whether they need to recruit and train additional staff.
More detailed guidance will be provided later in the autumn, including specific actions that traders and others will need to take to prepare. All well as some general guides on how to use the pack, most of the information made available concerns trade and customs. For example, there are step-by-step guides to importing and exporting as well as information on what to expect on day one of a “no-deal” scenario for those importing to, or exporting from, the EU only. Other guides cover what to expect on day one of a “no-deal” scenario for traders with the EU and the rest of the world, and for traders with the rest of the world only. There are guides for businesses supplying services to the EU, for express courier industry and postal services and for tour operators together with information for businesses selling duty-suspended alcohol, tobacco or fuel in the UK. As you might expect, customs agents, haulage companies and customs warehouses are included as are: temporary storage operators; ports and airports; ferry or Channel Tunnel operators moving goods between the UK and the EU; and freight forwarders. As well as being separately available at www.gov.uk, the guides are also gathered into one publication which can be found here.
New way to declare imports and exports
HM Revenue & Customs (HMRC) is alerting anyone who imports or exports goods from or to outside the EU, that they or their agent needs to be aware of upcoming changes to the way customs declarations are made. It has begun phasing in the new Customs Declaration Service (CDS) to replace the existing Customs Handling of Import and Export Freight (CHIEF) system. This changeover has started with a small group of businesses who make certain Supplementary Declarations with the number making declarations to CDS planned to grow over the coming months. When traders start using CDS will depend on their (or their agent’s) software developer or Community System Provider but HMRC expects that remaining importers will start to move over to CDS early next year. Exporters will migrate to CDS when export functionality becomes available in March 2019. This means that CDS and CHIEF will run in parallel for a short period of time and import declarations will be made in CDS while export declarations will continue to be made in CHIEF. Now, CHIEF is being tested to make sure it is capable of managing any increase in the volume of declarations expected when the UK leaves the EU.
HMRC advises traders to visit the CDS website to understand how the changes affect their business and what they will need to do to prepare for the introduction of CDS. This includes making sure they have a Government Gateway account and an EORI number. “If you use a software provider or agent,” HMRC advises, “you may also want to check they are aware and are preparing for the new CDS.” Furthermore, those using a C88 form or the National Export System to make declarations should also check the CDS site mentioned above for more information. Finally, traders should note that a new Trade Tariff will be used for declarations on CDS to comply with the Union Customs Code (UCC) so they would be well advised to take the time to understand how the information they provide as part of their declarations will change. The imports tariff can be found through the CDS link above with the exports tariff expected to be made available before the end of the year.
Bristol gets Authorised Economic Operator status
HM Revenue & Customs (HMRC) has awarded the Port of Bristol the status of Authorised Economic Operator (AEO). Often referred to as “trusted trader” status, the designation means that administrative burdens will be reduced at the Port, with knock-on effects boosting the speed and reliability of trade through Bristol’s global gateway. Under AEO status, HMRC is able to waive the financial guarantees that must be provided on goods held at the Port’s facilities, on which duty might need to be paid. AEO status is recognition that Bristol Port is a place where the movement of goods is free of red tape and delays, according to the Port’s Quality Manager, Philip Radford, who believes that it puts the Port in a strong position post-Brexit.
“We are delighted to receive this accreditation, and to pass on its immediate benefits to our customers, who can be further assured of rapid and reliable deliveries in the trade chain through our global gateway,” he added. The award has been made by HMRC following regular audits and detailed checks of how the Port operates its business, systems, processes and data exchange. The recognition means that policies and procedures at the Port’s operations in both Avonmouth and Royal Portbury Docks are officially sanctioned as being thorough and wholly trusted, CEO David Brown confirmed.
Lords have their say on Trade Bill
The Trade Bill was introduced in the House of Commons on 7 November 2017 and is currently working its way through the adoption process. After its second reading in the House of Lords, the Select Committee on the Constitution issued a report on the implications of the Bill which can be found here. It is intended to provide a legal framework for UK trade policy after withdrawal from the EU and is a framework measure which, while it is largely procedural in nature, does give the Government extensive powers, including delegated lawmaking powers, to effect new trade policy. The Government has said that these powers are justified in part by the need for flexibility, given uncertainty over the terms of the Brexit withdrawal agreement and any implementation arrangements which follow.
Chairman of the House of Lords Constitution Committee, Baroness Taylor of Bolton, said: “We recognise the scale, challenge and unprecedented nature of Brexit, but the Government must legislate in line with constitutional principles. In particular, it must deliver on the safeguards for delegated powers that it promises in the Trade Bill’s explanatory notes, but which it has not included in the Bill itself.” The Committee highlights the need for new parliamentary scrutiny mechanisms for treaties post-Brexit and recommends that the UK Government sets out how intergovernmental mechanisms will be adjusted to involve the devolved administrations in treaty-making after the UK leaves the EU. It also raises concern over the use of broad powers to establish the new Trade Remedies Authority.
Work continues on potential UK-US trade deal
Despite the continuing uncertainty over the final shape of Brexit making it unclear just when the UK will be in a position to agree its own trade deals, discussions are continuing on a possible agreement with the USA. A joint statement issued by the two sides after the fifth meeting of the UK-US Trade and Investment Working Group confirmed that officials are working to ensure continuity of the UK-US trade and economic relationship as the UK prepares to leave the EU. Topics discussed in the latest round of talks included: industrial and agricultural goods; services and investment (including financial services); digital trade; intellectual property rights (IPR); regulatory issues related to trade and small and medium-sized enterprises (SMEs).
Further impetus was given to the role of smaller companies in trade between the two countries, thanks to a third meeting of the UK-US SME Dialogue. Focusing particularly on digital trade, the Dialogue highlighted both the potential benefits of exporting for SMEs and the e-commerce tools available to help them grow their exports. To that end, the Department for International Trade (DIT) has made available an online guide: E-commerce for UK Small Businesses Selling Online to the USA which includes information on US rules and regulations as well as links to sources of help for UK companies looking to export to the USA. A further SME Dialogue is to be hosted by the UK in the summer of 2019, while a sectoral-focused SME “best practice” exchange on marine technology will be held on 9 April in Southampton.
Views sought on trade remedies appeals after Brexit
Anyone who shares the concerns expressed by the Committee (above) has until 14 December 2018 to make their views known to the Tribunal Procedure Committee (TPC). It is interested in receiving views with regard to possible changes that may be made to the Upper Tribunal (UT) Rules for trade remedies cases to take account of Brexit. However, this consultation is not concerned with the policies behind or concerning the proposed new trade remedies system: it focuses on plans for appeals for trade remedies cases to go to the UT (Tax and Chancery Chamber). The consultation document, available here, explains that trade remedies cases exist by reference to relevant World Trade Organization (WTO) Agreements (commonly termed the WTO rules) and (presently) the relevant EU regulations.
The European Commission is currently responsible for investigating complaints in trade remedies cases concerned with exports from other countries into the EU. On the basis that the UK expects to leave the EU on 29 March 2019, this country will then become responsible for its own trade policy and a new trade remedies system will need to come into being. This consultation exercise is part of the planning being undertaken by the Department for International Trade (DIT) to ensure that such a system is in place before the exit date. After Brexit, the relevant EU regulations will no longer apply and the trade remedies framework being developed by the Government is accordingly intended to meet the UK’s WTO obligations.
US confirms ambitious trade deal aspirations
The UK is one of three parties with which the USA wishes to conclude a trade deal, Washington has confirmed. US Trade Representative, Robert Lighthizer, has notified the US Congress that the Trump Administration intends to negotiate separate trade agreements with the UK, the EU and Japan. Describing the announcement as an important milestone in the process of expanding US trade and investment through deals with the three parties, Mr Lighthizer underlined the administration’s commitment to concluding negotiations “with timely and substantive results for American workers, farmers, ranchers, and businesses”. On the US side, the process will also involve Mr Lighthizer, as the US Trade representative, consulting the public on the direction, focus and content of the negotiations.
Objectives for the negotiations must be published at least 30 days before formal trade negotiations begin. In his notification letter to Congress regarding the UK, Mr Lighthizer notes that an ambitious trade agreement between the two countries could further expand the current trade and investment relationship by removing existing goods and services tariff and non-tariff barriers “and by developing cutting edge obligations for emerging sectors where US and UK innovators and entrepreneurs are most competitive”. The letter also acknowledges that the UK is not free to negotiate trade agreements until it has left the EU. In 2017, US trade in goods and services with the UK was worth an estimated $235.9 billion, of which exports accounted for $125.9 billion and imports $110.0 billion. The US trade surplus with the UK last year was $15.9 billion. US trade with the EU in 2017 was worth nearly $1.2 trillion, with exports totalling $527 billion and imports $627 billion, and a US trade deficit amounting to $100 billion. The value of US-Japan trade in the same period is put at $283.6 billion — $114 billion in exports and $169.5 billion in imports.
All systems go for EU-Singapore trade agreements
Member States in the EU’s Council have authorised the signature and conclusion of the trade and investment agreements between the Union and Singapore. Trade Commissioner Cecilia Malmström said: “I am very pleased that Member States have given their formal backing to these agreements, paving the way for their signature.”
Opening new opportunities for European producers, farmers, service providers and investors is a key priority for the Commission, she went on. These deals do that, and more, the Commissioner insisted, given that Singapore is an important gateway to the whole Asia-Pacific area. The agreements also promote sustainable development, as they include ambitious commitments on the protection of the environment and labour rights and uphold the right to regulate. They are, Commissioner Malmström said, another example of the EU’s determination to work with like-minded countries to uphold rules-based international trade.
The Council decision follows the proposal made in April of this year by the European Commission. EU and Singapore leaders will now sign the agreements during the current Asia-Europe Meeting (ASEM). After signature, the European Parliament will vote on the agreements. Once it gives its approval (expected to be a formality), the EU-Singapore Free Trade Agreement (FTA) is expected to enter into force in 2019, before the end of the current mandate of the European Commission. The EU-Singapore Investment Protection Agreement will only enter into force following its ratification at EU Member State level.
Vietnam trade deal part of EU’s ASEAN strategy
The EU-Vietnam trade agreement is important in itself, not least because it will eliminate 99% of all tariffs between the two sides, but it is also a step forward in the Union’s plan for a future region-to-region trade and investment agreement with the Association of Southeast Asian Nations (ASEAN). Vietnam is the EU’s second largest trading partner in ASEAN after Singapore so the European Commission has promised to get the EU-Vietnam trade and investment agreements in place as soon as possible. Vietnam has massive potential for EU exporters and investors to do business, Trade Commissioner Cecilia Malmström said. It is, she explained, one of the fastest-growing economies in southeast Asia, with a vibrant market of more than 95 million consumers, an emerging middle class and a young, dynamic workforce. Alongside the agreement recently reached with Singapore, the agreement with Vietnam will, the Commission believes, make further strides towards setting high standards and rules in the region, opening the way for a full EU-ASEAN trade deal.
The Commissioner said that 65% of duties on EU exports to Vietnam will be eliminated at entry into force of the agreement, with the remainder gradually removed over a 10-year period. EU duties on imports from Vietnam will be eliminated progressively over a seven-year period. This asymmetric approach, as it is known, takes into account the fact that Vietnam is a developing country. All textile fabric exports will see their duties removed at entry into force as will roughly half of EU pharmaceuticals exports and almost all machinery and appliances. Full details of the proposed arrangements with Vietnam can be found in a Commission fact sheet.
Alliance emerges on WTO reform
A statement has been issued by group of countries described as “like-minded World Trade Organization (WTO) members” after their recent meeting in Canada. Available here, the joint communiqué said: “We reaffirm our clear and strong support for the rules-based multilateral trading system and stress the indispensable role that the WTO plays in facilitating and safeguarding trade.” The 12 countries (plus the EU) participating in the meeting were Australia, Brazil, Canada, Chile, Japan, Kenya, South Korea, Mexico, New Zealand, Norway, Singapore and Switzerland. They unequivocally endorsed the rules-based multilateral trading system, reiterated their commitment to safeguarding and strengthening the WTO and agreed to work together to strengthen all three functions of the WTO.
First, they agreed to work on solutions to fix the dispute settlement system and resolve the Appellate Body crisis, while preserving its essential features. The EU is preparing a first set of proposals in this regard. Second, they supported the need to reinvigorate the WTO negotiating function by recognising the need to move forward in various formats and the necessity to address the realities of today’s economy, and in particular market distortions caused by subsidies. Third, they recognised the importance of ensuring effective monitoring and transparency in the WTO and committed to working on concrete solutions, including engaging constructively on proposals to improve compliance with notification obligations, which is the subject of an upcoming submission by the EU, the USA and Japan. The outcome of the meeting broadly supports the proposals made by the EU in its WTO reform Concept Paper on which we reported previously.
Government accused of being naïve over WTO tariff deal
International Trade Secretary Liam Fox has seen his attempt to broker a post-Brexit tariff deal with members of the World Trade Organization (WTO) stopped in its tracks. Failure to reach a deal means that the UK could see itself out of the EU while still trying to negotiate terms with the WTO. Russia is said to be the leading critic among some 20 countries that have expressed concerns about the proposals, with the USA, China, Australia and New Zealand also among that number. The approach was first set out in October 2017, when a joint letter from the UK and the EU to members of the WTO confirmed that the two parties had agreed that the quantitative commitments of the post-Brexit UK and remaining 27 EU Member States in the form of tariff-rate quotas should be met by apportioning the existing commitments of the 28-member Union. At the time, the Department for International Trade (DIT) stated: “To ensure a smooth transition which minimises disruption to our trading relationships with other WTO members the UK intends to replicate as far as possible its obligations under the current commitments of the EU.”
With opposition to the move now having been officially voiced, the UK faces the challenge of negotiating 20 or more bilateral deals on meat and dairy produce. Commenting on the news for the manufacturers’ organisation, EEF, Chief Executive Stephen Phipson described the Government’s hope that agreeing a tariff schedule with the WTO would be simple as naïve. “At a time of rising protectionism and the return of barriers to trade it is no great surprise that other countries have refused to accept our ‘cut and paste’ short-cut,” he said. The Government must now recognise that its strategy has failed, he added, and allow industry sufficient time to prepare for an uncertain global trading relationship by extending the Brexit transition period.
EU exporters urged to capitalise on trade deals
Although EU trade agreements are helping remove barriers to trade, European exporters should be making more of the opportunities they offer. Commenting on the findings of the European Commission’s Second Annual Report on the Implementation of Trade Agreements, Commissioner for Trade Cecilia Malmström said that the growing list of strategic agreements opens doors and gives a competitive edge to European companies in key markets. Over the years, the EU has invested greatly in developing the world’s largest network of trade agreements, she observed, with the latest facts and figures showing that this approach is delivering.
Available here, the Report on Implementation of EU Free Trade Agreements, 1 January–31 December 2017 examines 33 existing agreements which between them cover 62 partner countries. The agreements fall into four categories: First generation, adopted before 2006 and which focus on eliminating tariffs; Second generation, that also cover intellectual property rights, services and other issues; Deep and Comprehensive Free Trade Areas (DCFTAs) that create stronger economic links between the EU and its neighbouring countries; and Economic Partnership Agreements (EPAs) which aim to address the development needs of African, Caribbean and Pacific (ACP) regions. In 2017, total EU trade under Free Trade Agreements (FTAs) amounted to €1179 billion or 32% of EU total trade with third countries. The Union’s largest FTA partners last year were Switzerland (7% of total EU external trade), Turkey (4.1%), Norway (3.4%) and South Korea (2.7%). Total imports under EU FTAs in 2017 were worth €542 billion, with total exports valued at €637 billion. Despite the positive results so far, the Commission is to step up its efforts to inform and assist EU companies — especially smaller ones — to benefit from trade deals by, for example, providing guidance to those wanting to capitalise on the recent agreements with Canada and Japan.
UK depends more on air freight than most EU competitors
A report, commissioned by Airlines UK and supported by Heathrow Airport, Manchester Airports Group and the Freight Transport Association (FTA), shows that the UK is more dependent on air freight services than most of its EU competitors. To be found at airlinesuk.org, Assessment of the Value of Air Freight Services to the UK Economy shows that, while only a quarter of German exports to non-EU countries in value terms are transported by air, for UK exports it is nearly half. Only Ireland ships a greater share of its non-EU exports by air than does the UK. UK air freight imports and exports were worth £181 billion in 2017 with air freight services contributing £7.2 billion to the UK economy and supporting 151,000 jobs. Although less than 2% of London’s production is dependent on air freight services, the percentages are much higher in other regions: 9% in the North West, for example, 8.6% in Wales and 7.6% in the East Midlands.
Airlines UK Chief Executive, Tim Alderslade, said: “This report gives us the hard evidence of just how important air freight is to the national economy, our regional economies and to the international trade which will be increasingly important to us as we leave the EU.” The report makes clear that there are real opportunities, particularly for regional airports, arising from improved air connectivity. It cites as one example the fact that the value of exports travelling to China from Manchester Airport has increased by nearly £300 million in the two years since a direct route to Beijing was introduced. Making the link between connectivity and trade, the report cites how the UK has more freight capacity to the USA than any other EU country, ensuring that last year 60% of the UK’s trade value with the USA was transported by air (compared to 51% for France and 36% for Germany). By contrast, the UK currently has less capacity to China than either Germany or the Netherlands.
More guidance on trading after a no-deal Brexit
In August 2018, the Government published the first 25 in a series of technical notices on planning for what it called the unlikely event of the UK leaving the EU in March next year with no deal. Several of the notices in that initial batch concerned trading arrangements and the Government has expanded on this advice in a second set of guidance notes of which all 28 are available at www.gov.uk. Several of these will be of general interest including those concerning driving licences, the use of mobile phones outside the UK and the impact of no deal on passports.
One which will be of particular interest to importers and exporters is Trading Under the Mutual Recognition Principle if There’s No Brexit Deal. This notes that some manufactured goods are subject to national regulations rather than EU-wide rules with examples including furniture, textiles, bicycles and cooking utensils. As an example, a bicycle made to comply with French national requirements and sold in France can then lawfully be marketed in other EU countries — even though those countries may have different national requirements for bicycles. However, the UK would no longer fall within the scope of the mutual recognition principle if no Brexit deal is agreed and UK businesses exporting non-harmonised goods to the EU market would then need to consider the national requirements of the first EU country to which they export. UK businesses who import non-harmonised goods into the UK will need to take action even if their goods were previously lawfully marketed in another EU country.
A second notice of interest concerns Trading Goods Regulated Under the New Approach. This explains the future arrangements for the regulation of most goods covered by the EU’s New Approach, which includes those regulated under the “New Legislative Framework” as well as machinery. In this context, EU legislation sets out the rules, or “essential (safety) requirements”, which products must meet before they are placed on the EU market. In the event of no deal, the results of conformity assessment carried out by UK notified bodies to meet the above requirements will no longer be recognised in the EU. This means that products tested by a UK notified body will no longer be able to be placed on the EU market without retesting and re-marking by an EU recognised conformity assessment body.
Brexit uncertainty hits investment and trade
The British Chambers of Commerce (BCC) has downgraded its growth expectations for the UK economy, forecasting gross domestic product (GDP) growth for 2018 at just 1.1% (down from 1.3%) and for 2019 a fall from 1.4% to 1.3%. The latest forecast implies that by 2020 the UK economy will have experienced its second weakest decade of average annual GDP growth on record. The BCC explained that the downgrades to forecasts for GDP growth in 2018 and 2019 have been largely driven by a weaker outlook for trade and investment. Exporters face more subdued growth given continued Brexit uncertainty and the expected slower growth in key markets, it went on. As a consequence, net trade is expected to make a negative contribution to GDP growth over the forecast period.
Director General Dr Adam Marshall said: “Brexit uncertainty continues to weigh heavily on many firms, as most of the practical questions facing trading businesses remain unanswered. The lack of precision on the nature of the UK’s future relationship with the EU is lowering expectations for both business investment and export growth.” BCC forecasts export growth of 1.7% in 2018 — down from 2.8% in the previous forecast — due to revisions of previous data. Alongside the forecast, the BCC warns the Prime Minister and Chancellor that the Government’s upcoming Autumn Budget cannot be a “business as usual” affair. Ministers must go all-out to incentivise and kick-start business investment at a crucial turning point for the UK, the BCC said.
Manufacturers fear a no-deal Brexit
With the September EU summit having left many members of the UK Government openly discussing the possibility of the UK having to leave the Union in 2019 without securing a deal, a new survey by a leading business group makes worrying reading. According to the research published by EEF, the manufacturers’ organisation, one in six manufacturers claim that business would become “untenable” for them if the UK reverted to World Trade Organization (WTO) tariffs, new border checks on people and increased checks on goods at the border. Already a third (30%) of businesses say that they are finding or expect to find it more difficult to recruit workers with the necessary skills. EEF Chief Executive Stephen Phipson said: “It is absolutely crucial that an industry that accounts for 10% of the UK’s economic output, and almost half of the country’s exports, prepares for exit day and all its possible implications. But currently over 80% have no plans to prepare for a scenario such as no-deal.”
While the EEF survey found a definite appetite to take advantage of new trade possibilities, it also revealed that respondents are uncertain about where future opportunities lie. Although half (52%) see the USA as the top priority for a new trade deal after Brexit, trade with the EU is still seen as critical. Some 58% of business leaders highlighted the need to retain no tariff trade with the EU and almost as many (50%) emphasised the importance of retaining full access to the single market. Remaining in the Customs Union was seen as important for 71% of those businesses surveyed. “The Chequers deal is a pragmatic and realistic solution which offers a practical way forward,” Mr Phipson concluded. “It is now essential that the Prime Minister is given the backing to deliver on it.”
How will Brexit affect your business?
Given that the shape of any Brexit deal is still unclear, it is difficult for any business to assess what impact it will have. That said, it seems that a majority of UK businesses have not yet tried to complete a Brexit risk assessment. With the 29 March 2019 deadline fast approaching, a survey by the British Chambers of Commerce (BCC) reveals that 62% of firms are apparently not getting ready for Brexit, despite worrying about it. Not surprisingly, larger companies are more prepared than smaller ones: 24% of firms with over 250 employees told the BCC they have not yet completed an assessment, compared to 69% of microbusinesses (those with fewer than 10 employees). The lack of action is partly due to firms wanting greater clarity and partly because they are suffering from “Brexit fatigue”. The latter means that many businesses have switched off from the process because they do not believe they will be affected, the BCC explains.
Also revealed in the online survey of 2530 businesses across the UK is that 21% plan to cut investment if there is no deal, with 20% saying they will move part or all of their business to the EU and 18% anticipating a cut in recruitment. However, “these numbers fall dramatically” if the current negotiations end in a status quo transition deal. The evidence is clear according to BCC Director General Dr Adam Marshall: “Failure to reach a political agreement would have real-world consequences, with significant decreases in both investment and recruitment.” Although larger firms and those active in international trade would suffer the most from a disorderly and sudden exit from the EU, he warned, there will be impacts across the board, adding that the Government must act urgently and decisively to get a comprehensive deal done.
As if Brexit was not already causing problems enough, the European Commission has thrown a new complication into the mix with its proposal to “discontinue seasonal changes of time” — in other words to put an end to the practice of changing the clocks twice a year. The Commission’s proposal for a directive, available here, will now go to the European Parliament and the Council and, assuming they agree, will remove the legal requirement for Member States to follow EU requirements with regard to seasonal clock changes. They will, the Commission explains, then have the freedom to decide once and for all whether they want to permanently apply summer or wintertime. There is a complication, however, as the proposal seeks to ensure that any changes are made in “a co-ordinated way” between neighbouring countries so as to safeguard the proper functioning of the internal market.
It recognises the problems that could arise if some Member States kept seasonal clock changes arrangements while others (particularly their neighbours) discontinued them. Under the Commission’s proposal, the last mandatory change to summertime would take place on Sunday 31 March 2019 and each Member State would notify by April 2019 whether it intends to apply permanent summer or wintertime. After that, the Member States wishing to permanently switch back to wintertime would still be able to make one last seasonal clock change on Sunday 27 October 2019. Following that date, seasonal clock changes would no longer be possible. A public consultation in summer 2018 received 4.6 million responses — the highest number ever received in a public consultation organised by the Commission — with 84% of respondents being in favour of the new proposal. One immediate problem that springs to mind is what happens in Northern Ireland if a post-Brexit UK decides to go in one direction and the Irish Republic opts for the other?
Will Brexit bankrupt businesses?
Post-Brexit customs delays could see 10% of UK businesses go bust, the Chartered Institute of Procurement & Supply (CIPS) has claimed, with more under threat if delays become longer. One in 10 firms could go out of business if delays were between 10 and 30 minutes, with 14% endangered by delays of one to three hours and 15% threatened if goods were delayed at customs by 12 to 24 hours. Based on a survey of more than 1300 UK- and EU-based supply chain managers, the CIPS research confirms the fragility of businesses that depend on exceptionally lean, frictionless supply chains, where quick customs clearance is seen as a given. Warning that the UK economy “could fall off a cliff on Brexit day if goods are delayed by just minutes at the border”, CIPS Economist John Glenn predicted that delays would not only affect the firms involved, but would also lead to a shortage of products on shelves and an increase in prices for consumers.
Businesses are, however, taking steps to limit their vulnerability to border delays, with 4% already starting to stockpile goods and a further 23% planning to do so. Worryingly, half of those surveyed said they would struggle to find the suppliers and skills they need in the UK. Some are therefore seeking suppliers outside the EU (21%), with others opting to build greater flexibility into contracts (also 21%). More than a third of businesses (38%) told CIPS that they are unable to prepare as future trade arrangements are not yet clear. “The Brexit deadline is drawing nearer and, while most businesses are trying to prepare, they are limited on what they can do until a final Brexit deal has been agreed,” Mr Glenn warned. While stockpiling goods is an option for some businesses, he added, many do not have the facilities available to store surplus stock — and those working with perishable goods simply will not be able to build-up stocks.
What happens to Stilton Cheese after Brexit?
Scotch Whisky, Welsh Lamb, Lough Neagh Eels and Stilton Cheese have two things in common: they are among the 86 UK products registered under the EU’s Geographical Indications (GIs) scheme and they are significant export earners, worth over £5 billion to UK trade figures. The EU rules provide legal protection from imitation for both regional and traditional specialties, whose authenticity and origin can be guaranteed. Producers of GI products value the schemes for the collective protection they bring from imitation and, in some cases, the premium it allows them to charge for products. The various GI designations — Protected Designation of Origin (PDO); Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG) — can take several years to earn and are considered to be of real value to producers and exporters. The question therefore arises, what happens to this protection after the UK leaves the EU?
It is possible that some form of mutual recognition will be built in to a trade agreement with the EU — maintaining protection on European products such as Gorgonzola, Champagne and Münchener Bier — but it remains unclear as to if and when this might happen. The Department for Environment, Food & Rural Affairs (Defra) has accordingly launched a consultation seeking views on establishing UK GI schemes after Brexit. “The mechanism for bringing the schemes into UK law will ensure that we have UK GI schemes in place from Exit day which meet our World Trade Organization (WTO) obligations,” Defra said. “It does not, however, allow the UK GI schemes to be changed substantially from the EU schemes.” Full details can be found at consult.defra.gov.uk and the deadline for responding is 1 November 2018.
First success under new Customs Declaration Service
The first successful declarations submitted through HM Revenue & Customs’ (HMRC) new Customs Declaration Service (CDS) have been completed by a client of Descartes Systems UK Ltd using its Descartes e-Customs process. The CDS is the new way of managing import and export customs declarations which is set to replace HMRC’s Customs Handling of Import and Export Freight (CHIEF) system. Following the technical release of CDS in August 2018, Descartes has been working closely with HMRC to prepare one of its trader clients for making the first declaration using the new system. It is now working to help its other clients to prepare for this and future CDS releases.
Director of Product Management, Customs Europe for Descartes, Martin Meacock, explained: “There are a number of changes between the CDS system and CHIEF, which are not only technical but also around the rules of completion and data required to comply with the EU Union Customs Code.” He said that, after close consultation with HMRC, Descartes will be introducing new features to facilitate the additional CDS import/export functionality in future releases. HMRC’s Customs Transformation Programme Director Kevin Franklin described the first use of CDS as an important milestone for both HMRC and its trade partners. “We will continue to work with them all to move businesses from CHIEF to CDS,” he said.
How would a Facilitated Customs Arrangement work?
The Government has been told to answer questions about its proposed Facilitated Customs Arrangement (FCA) as a matter of urgency. Commenting on a House of Lords report into the customs challenges posed by Brexit, Baroness Verma said that answers are needed about how goods would be tracked, how revenue would be collected and how the repayment mechanism would work. Speaking as Chairwoman of the EU External Affairs Sub-Committee, Baroness Verma warned that, with only six months to go until Brexit, the clock really is ticking on a mutually acceptable customs agreement. As the latest tranche of “no deal” Brexit notices was issued, Baroness Verma emphasised that such an outcome will cause disruption. Mitigation options are limited and no technology currently exists which would eliminate border checks completely, she said, adding that, even if the UK waived customs checks on goods arriving from the EU, the Union has said that it will not reciprocate.
Among the report’s main findings are that the Chequers proposal to collect revenue on behalf of the EU makes agreement difficult because the EU’s chief Brexit negotiator has stressed that the EU will not delegate duty collection to a non-Member State. If no deal is reached, then trading with the EU under World Trade Organization (WTO) rules would be both disruptive and costly, the report argues, with an estimated 245,000 UK businesses that currently trade exclusively with the EU either having to gain expertise in complex customs procedures themselves or outsource that task. The report also notes that the Government’s current position that customs checks of EU goods could be unilaterally suspended in order to keep goods moving might be in breach of WTO rules. The full text of Brexit: The Customs Challenge can be found here.
EU asks UK for billions in duties
The European Commission has stepped up its efforts to obtain more than €2 billion in customs duties from the British Government. The UK’s failure to tackle known customs frauds for more than 10 years has effectively deprived the EU of €2.7 billion, the Commission argues. An investigation by the EU’s anti-fraud body, OLAF, found that UK importers had evaded a large amount of customs duties by using fictitious and false invoices and incorrect customs value declarations. In response to OLAF’s 2017 report on the amount of fraud, the Commission opened an infringement procedure against the British Government in March this year. Further Commission inspections subsequently confirmed that the undervaluation fraud scheme had operated on a large scale through British ports between 2011 and 2017.
Despite the UK having been warned of the risks relating to the imports of textiles and footwear originating from China since 2007, and despite having been asked to take appropriate risk control measures, the Commission says that the UK failed to take effective action to prevent the fraud. Now the Commissioner for Budget and Human Resources, Günther Oettinger, has decided to send a Reasoned Opinion to the UK because of its failure to make customs duties available to the EU budget, as — in common with all Member States — it is legally required to do. This is effectively a yellow card: if the British Government does not act within two months, it could find itself answering to the EU’s Court of Justice (ECJ).
Window on EU customs’ planning
As the Brexit talks move towards a conclusion, one of the main areas of contention remains how to deal with goods and services crossing borders — and particularly the border between the Irish Republic and Northern Ireland. While this remains an obsession for the UK Government, however, the EU has wider interests and the European Commission is pushing ahead with its plans for what it calls the “Single Window Environment for Customs”. This is defined as a facility which allows parties involved in trade and transport to lodge standardised information and documents with a single entry point to fulfil all import, export and transit-related regulatory requirements. “The objective of the EU Single Window environment for customs,” the Commission explains, “is to enable economic operators to electronically lodge, and only once, all the information required by customs and non-customs legislation for EU cross-border movements of goods.”
While this is not a new idea — the EU Single Window-Common Veterinary Entry Document (EU SW-CVED) was initiated in 2012 and entered into production in December 2014 — it is one that the Commission is increasingly keen to see developed. It has now launched a consultation (available at ec.europa.eu) seeking comments from those involved in the cross-border movement of goods on how the SW concept might be taken forward. Once the consultation is closed, on 16 January 2019, the results will feed into the preparatory work for a potential future initiative on an EU SW. Unfortunately, it will almost certainly be too late to help solve the UK’s current dilemma.
Latest advice on trade if there’s no deal
The Government has already published two batches of technical notices on planning for the “unlikely event” of the UK leaving the EU in March next year with no deal. Now a further batch of 28 notices has been released covering a wide range of topics from the future of the aviation industry in the event of no agreement being reached with the EU to pet passports, patents and the regulation of chemicals under the REACH regime. The notices have been produced by three government departments and are not grouped together. Those of most interest to trading organisations are listed below.
The Department for Environment, Food & Rural Affairs (Defra) has published:
The Department for Business, Energy & Industrial Strategy (BEIS) has published:
The Department for Transport (DfT) has published a number of notices, all available at www.gov.uk, of which the ones of most interest to traders are:
Commercial Road Haulage
Flights to and from the UK
Driving in the EU (including hiring vehicles).
All the notices include a brief description of the current position, some thoughts on what might happen after March 2019 in the event that there is no deal and advice and guidance on what businesses and individuals can do by way of preparing to meet and alleviate possible problems.
Announcing the “Healthcare UK Export Catalyst”, the Department for International Trade (DIT) and Healthcare UK said that the NHS is to target up to £7 billion of export opportunities each year over the next decade. With global spending in the healthcare sector growing at 7% a year, the Export Catalyst initiative seeks to build on existing sales by NHS organisations of more than £100 million over the last two years. In order to help the NHS identify opportunities and win contracts, the service will provide personalised support for individual NHS organisations, training courses, online resources and contacts with both local trade advisors and the DIT’s network of Trade Commissioners.
“In my view Healthcare UK have done a great job already in raising the profile of UK healthcare services and systems overseas,” Sir Malcolm Grant, Chairman of NHS England, said. The new Export Catalyst service will further enhance the service available to NHS Trusts in developing their export capabilities, he added, so that they can reach a wide range of international markets. Over the next year, the initiative will focus on providing a showcase for great British healthcare services, the DIT explained, with the aim of building a strong brand across the globe and realising the export potential of the UK’s world-class health system.
Global trade plagued by corruption
A corruption-free level playing field for global trade is still far from being achieved, a new report has revealed. Highlighting a lack of corruption enforcement among many of the signatories to the Anti-Bribery Convention, Transparency International (TI) says that most of the world’s biggest exporters are failing to punish companies that pay bribes overseas. In “Exporting corruption”, TI assesses the extent to which 44 countries enforce the Organisation for Economic Co-operation and Development’s (OECD) Anti-Bribery Convention. Between them, those 44 countries account for over 80% of global exports and some 75% of total foreign direct investment (FDI) outflows. Although the majority of the countries assessed are signatories to the Anti-Bribery Convention, the report also covers China, Hong Kong, India and Singapore — which have not signed the OECD Convention but are parties to the UN Convention against Corruption. The report finds that most of the world’s biggest exporters are failing to punish corporations that pay bribes abroad, with only 11 of the 44 jurisdictions analysed found to conduct active or moderate anti-bribery enforcement. “It is unacceptable that so much of world trade is susceptible to consequence-free corruption,” Delia Ferreira Rubio, TI’s Chairwoman said.
Despite governments having promised to implement and enforce laws against bribing foreign officials under the OECD and UN Conventions, she explained, many are not even investigating major cases of grand corruption (that is, those involving state-owned enterprises and senior politicians). In addition to calling for enforcement efforts to be improved, TI makes a number of recommendations for governments, including improving accountability and deterrence, by publishing up-to-date data and case information. It also wants administrations to facilitate cross-border investigations and to ensure even-handed, dissuasive sanctions by applying transparency, accountability and due process in settlements of foreign bribery cases. The full 160-page report is available here.
EU seeks WTO reform
Given that one of its fiercest critics is the President of the USA, the World Trade Organization (WTO) is facing an existential struggle to maintain its credibility. Increasingly burdened by inflexible procedures and conflicting interest among its members, its role in resolving trade disputes is on the verge of paralysis and a lack of transparency from many countries threatens its ability to act as a monitoring body. In an effort to address such issues, and to make international trade rules fit for the challenges of the global economy, the European Commission has set out what it calls a comprehensive approach for modernising the WTO. Available here, a Commission Concept Paper addresses three main areas: updating the international trade rulebook to address the challenges of a global economy; strengthening the monitoring role of the WTO and overcoming deadlock in the WTO’s dispute settlement system.
One specific issue highlighted by the Commission is that of market-distorting subsidies, which are often channelled through state-owned enterprises and are not adequately captured under current international trade rules. That failure, it warns, helps erode the level playing field for businesses. Despite its criticisms of the WTO, the Commission emphasises that the EU is still a staunch supporter of the multilateral trading system. Presenting the paper, Trade Commissioner Cecilia Malmström noted that the multilateral system has over several decades provided a stable, predictable and effective framework for companies across the world, helping many economies to grow rapidly. She also said that the WTO remains indispensable in ensuring open, fair and rules-based trade — but that it has not been able to adapt sufficiently to the rapidly changing global economy. “The world has changed, the WTO has not,” the Commissioner said. “It’s high time that we acted to make the system able to address challenges of the today’s global economy and work for everyone again. And the EU must take a lead role in that.”
EU lauds Canada trade deal
The successes of European companies that have taken advantage of opportunities presented by the EU-Canada trade deal are being celebrated by the European Commission. Marking the first anniversary of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada provisionally entering into force, the Commission has highlighted the success of exporters from 18 Member States. Those seeking evidence that UK companies have been enjoying their new-found freedom to trade with Canada will, however, be disappointed. While the list includes Estonia, Ireland and Sweden among its list of countries successfully exporting to Canada, the UK is notable by its absence. With France, Germany and the Netherlands also boasting EU-Canada “success stories”, the question is: Why are British businesses apparently missing out?
As well as removing virtually all customs duties, CETA offers legal certainty for EU companies looking to export to Canada, the Commission points out. Statistics for October 2017 to June 2018 suggest that exports are up by over 7% year on year. Exports of machinery and mechanical appliances (which account for 20% of EU exports to Canada) are up by over 8%, while pharmaceuticals (which comprise 10% of exports) have risen by 10% — as have exports of furniture. Among agricultural products, exports of chocolate have grown by 34%, fruit and nuts by 29%, sparkling wine by 11% and whisky by 5%. With preliminary data showing there is plenty to celebrate, even at this stage, the deal is great news for European businesses, big and small, Trade Commissioner Cecilia Malmström said. Details of companies exporting to Canada can be found at ec.europa.eu.
China-US fight could cut global trade in half
If the USA and China fail to agree a deal to halt the increase in import tariffs, global trade growth could halve by 2020, according to leading trade credit insurer Euler Hermes. The USA has already implemented a 10% tariff on $200 billion of Chinese imports leading China to retaliate with tariffs on $60 billion of goods. The average US import tariff now stands at 5.2%, the highest level since the 1980s, and compares to an average of 3.5% before the latest tariffs were imposed. Should the two countries dig their heels in and fail to agree a deal before 2019, US tariffs on Chinese goods could increase to 25% and Euler Hermes predicts that global trade growth could decelerate from roughly 4% year on year to 2% by 2020 under this scenario.
However, Ludovic Subran, Chief Economist at Euler Hermes, said: “While the phrase ‘trade war’ has been used, we see the current situation as more of a ‘trade feud’. In our view a ‘trade war’ scenario would involve tariffs on $500 billion worth of Chinese goods. This, in turn would lead to a 6% cut in global trade and 1.5% cut in global GDP growth.” Given how detrimental its impact will be on the global economy, he goes on to argue that there is only a 5% chance of this situation coming about. For the moment, Mr Subran believes, global trade growth is outweighing the dampening effects of new protectionism measures by the world’s largest economies.
Trade to benefit from digital technologies
Artificial intelligence (AI), blockchain, 3D printing and the Internet of Things (IoT) are set to have a profound impact on global trade. Between them, those technologies will see global trade rise as much as 34% by 2030 thanks to lower costs and higher productivity, a new report from the World Trade Organization (WTO) predicts. Available here, the World Trade Report 2018 focuses on the transformative impact of digital technologies on trade, claiming they are likely to reduce costs and boost trade significantly. One of the main beneficiaries will, it says, be the services sector, with its share of trade expected to grow from 21% to 25% by 2030.
Developing countries are also predicted to benefit from the adoption of digital technologies, with their share of global trade potentially rising to 57% by 2030 — up from 46% in 2015. Micro, small and medium-sized enterprises (MSMEs) are also anticipated to gain — but only if they can keep up with the adoption of digital technologies. The report argues that new technologies are likely to change the established ways the world trades, with comparative advantages predicted to vary across economies. Given the significant impact of digital technologies on trade, WTO Director-General Roberto Azevêdo has called for an informed debate on the issue. “The fact is, we are entering a new economic era which demands new thinking,” he said. “How we will respond is the defining question facing governments around the world today.”
What if there’s no deal?
The Government has published the first 25 in a series of technical notices on “no deal planning” which Secretary of State Dominic Raab believes will inform people and businesses in the UK about what they may need to do in the event that a Brexit deal proves impossible. All available at www.gov.uk, they cover a huge range of subjects from farm payments to batch testing medicines and from state aid to VAT for businesses. Of particular interest is the set relating to importing and exporting, specifically:
trade remedies if there’s no Brexit deal
trading with the EU if there’s no Brexit deal
classifying your goods in the UK Trade Tariff if there’s no Brexit deal
exporting controlled goods if there’s no Brexit deal.
The Trade Remedies Authority (TRA), a new arm’s length body, will investigate complaints of unfair trading practices and unforeseen surges in imports if the UK leaves the EU with no deal. This will help to protect businesses suffering injury from dumped or subsidised imports or unforeseen surges in imports.
Trading with the EU
This lists actions which businesses can take now to prepare for the possibility of a no deal scenario. It aims to help them to understand what the likely changes to customs and excise procedures will be to their businesses and asks businesses to consider the impact on their role in supply chains with EU partners. It notes that, in the event that the UK and the EU do not have a free trade agreement (FTA) in place in a “no deal” scenario, trade with the EU will be on non-preferential, World Trade Organization (WTO) terms. This means that Most-Favoured-Nation (MFN) tariffs and non-preferential rules of origin would apply to consignments between the UK and the EU.
Classifying goods in the UK Trade Tariff
In the event of no deal, for UK exports to the EU, the EU will require payment of customs duty at the rate under the EU’s Common Customs Tariff (CCT). For goods imported to the UK from the EU, the UK will require payment of customs duty at the rate set by the UK Government. Trade with the EU will be on non-preferential, WTO terms. This means that MFN tariffs and non-preferential rules of origin would apply to consignments between the UK and the EU. The UK will apply its MFN rates to goods imported into the UK from the EU. The Government will determine and publish these new UK duty rates before leaving the EU and these may be different from the rates in the EU’s CCT.
Exporting controlled goods
Current regulations would continue to apply in the same way as they do now, except that they would apply to exports from the UK rather than to exports from the EU Customs Territory. EU regulations on the export of civilian firearms, dual-use items and goods that may be used for torture or capital punishment would become UK regulations as retained EU law under the EU (Withdrawal) Act 2018. The overall framework of controls of dual-use exports would not change, but there would be changes to some licensing requirements. For example, the movement of dual-use items from the UK to the EU would require an export licence. This is not currently the case and these movements would, therefore, need to be licensed in the same way as for non-EU destinations. Overall, Mr Raab makes clear, a no deal scenario is not what the Government wants. “And it’s not what we expect,” he stressed, “but we must be ready.”
Brexiteers’ plan to keep Irish border invisible
One of the key sticking points in the Brexit negotiations is the insistence by the EU that the integrity of the single market must be preserved at the only land border between the two but that this must not mean a return to physical checks between Northern Ireland and the Republic. Now the European Research Group (ERG), composed of most of the leading Brexiteers in the UK Government, has published its proposals for solving the problem — ensuring no new physical infrastructure at the border. The Border Between Northern Ireland and the Republic of Ireland Post-Brexit can be found at brexitcentral.com. It points out: “The key obstacle in the negotiations is the EU’s concern that goods could enter into the single market area through the Irish border without being compliant with EU standards or tariffs. The question for the EU is whether this risk to the integrity of the single market is so serious that it could block a Free Trade Agreement with the UK.”
Noting that the main checks needed are customs declarations, declarations of origin, sanitary and phytosanitary checks and checks on product compliance, the paper argues that the generally repetitive trade between the two sides is well suited to established technical solutions and simplified customs procedures already available in the Union Customs Code (UCC). The ERG suggests that larger companies take advantage of trusted trader-type schemes while, for all companies, the requirements for additional declarations can be incorporated into the existing system used for VAT returns. It goes on to call for equivalence of UK and EU regulations for agricultural produce and for the island of Ireland to be declared a Common Biosecurity Zone. Former Brexit Secretary David Davis described the proposals as “fabulously practical and sensible”.
Maintaining a post-Brexit workforce
For nearly half a century, free movement has enabled British businesses to draw on the talent, skills and labour of over 500 million people in Europe. Once the UK leaves the EU, however, the current freedom of movement system will end and, as a result, the UK risks having too few people to run the NHS, pick fruit or deliver products to stores around the country, the CBI warned in a recent report. Open and Controlled: A New Approach to Immigration After Brexit makes 14 recommendations for developing a new immigration system for the UK. Introducing the report, CBI Deputy Director-General Josh Hardie said that the building blocks of a successful new migration system for the UK must begin with an honest and open debate that has been absent from politics.
Based on evidence from 129,000 firms across 18 industry sectors, the report argues that businesses want to see a new approach that remains open enough to grow the UK economy, but with sufficient controls to build public trust and confidence. With many sectors already facing shortages, fast, sustainable, evidence-based action is needed, Mr Hardie said. The CBI’s recommendations for a new immigration system are grouped into five themes, including reforming the UK’s non-EU immigration system so that firms can better access people and skills from around the world, and replacing free movement with an open and controlled immigration system for EU workers.
Plan to give employers access to language skills
A new Centre of Excellence for Modern Languages aims to improve the teaching of Spanish, French and German in England. Funded to the tune of £4.8 million over the next four years, the Centre is part of what School Standards Minister Nick Gibb calls a new drive to deliver a nation of confident linguists and ensure that businesses have the skilled workers they need. Backed by the CBI, the new facility will be part of a wider network based around nine leading schools across England which will act as language hubs. A survey of employers by the employers’ group has found that almost two-thirds of businesses agree that foreign language skills are important, particularly in helping build relations with clients, customers and suppliers. The Centre will start working with the first regional hubs this autumn in Preston, Hove, Gateshead, Dartford, Bradford, Marlow, Exeter and Hertfordshire.
Port statistics underline need for good Brexit deal
Total tonnage levels for all UK ports in 2017 were more or less the same as in 2016. Statistics published by the Department for Transport (DfT) show that 481.8 million tonnes passed through all UK ports last year, with 470.7 million tonnes going through major ports and 11.1 million tonnes being handled by minor ones. The overall figure for 2016 was 484.0 million tonnes, with 472.8 million tonnes being handled by the UK’s major ports. As the UK is continuing to import more than it exports, there was a total of 248.3 million tonnes entering all ports from international sources, with 138.5 million tonnes leaving. The DfT notes that traffic with the EU remains the largest international route, accounting for 55% of international tonnage passing through major ports.
Among other key points in UK Port Freight Statistics: 2017 (which can be found here) are that roll-on roll-off (Ro-Ro) traffic remained level compared to 2016, with major ports handling 18.2 million Ro-Ro units, and container units marginally increasing to a record high of 5.9 million. The tonnage of crude oil handled has more than halved since 2000 to 86.3 million tonnes and continues to fall, while liquid bulk goods, which account for 40% of total tonnage, fell 1% overall last year. Unitised traffic marginally increased to 24.1 million units, making 2017 the fifth consecutive year of growth. The modest growth in Ro-Ro traffic (commercial vehicles and trailers) suggests, according to British Ports Association (BPA) Chief Executive Richard Ballantyne, the need to agree a post-Brexit deal with the EU that preserves the many advantages of Customs Union and Single Market membership. A good deal, such as that proposed in the UK Government’s Facilitated Customs Arrangement, is highly preferable not only for the ports handling that type of traffic, but also for the UK and EU economies, he said.
Scotland calls for voice in trade deals
The Scottish Government wants the UK’s current process for developing, scrutinising and agreeing trade deals to be radically overhauled. Action is needed, it argues, even if the UK remains in the EU and/or as a member of the Customs Union. Change is, however, particularly urgent in the context of a possible “hard Brexit” which would see the UK leave both the Customs Union and the Single Market, a recent discussion paper argues. Calling for a decision-making process that protects Scotland’s economic and social interests in future trade deals, the paper argues that the Scottish Government and Scottish Parliament should be guaranteed a role in all stages of the formulation, negotiation, agreement and implementation of such deals. In issuing the document, the Scottish Government seeks to encourage a wide-ranging discussion about how the country’s interests can best be protected and enhanced.
To that end, it identifies arrangements in other countries (notably Belgium and Canada) for involving devolved administrations in trade agreements which, it claims, offer useful models for what an enhanced role for the devolved administrations in UK trade policy and the agreement of future trade deals could look like. The Scottish Government must do everything it can to protect Scotland’s interests in future trade deals in all possible Brexit outcomes, Constitutional Relations Secretary Michael Russell insisted. Having the Scottish Government and Scottish Parliament involved in developing trade arrangements would, he added, “bring clear benefits for Scottish producers, exporters and consumers — not least protecting Scotland’s NHS from being opened up to private competition, or opening up our markets to chlorinated chicken or hormone-injected beef”. The full text of the discussion paper Scotland’s Role in the Development of Future UK Trade Arrangements can be found here.
Truck cartel compensation worth billions
If someone asks you to get in touch because you might be owed a large sum of money, it is usually a scam — but just occasionally it turns out to be legitimate. Last year, the European Commission had found a number of truck manufacturers guilty of illegal price fixing. Now, the Road Haulage Association (RHA) has said that the legal action it launched in the wake of the Commission’s finding could see UK transport operators share a multi-billion windfall. It has applied to the Competition Appeal Tribunal for compensation which it claims is due to thousands of haulage firms who bought or leased vehicles from five manufacturers. The five concerned — DAF, Daimler (Mercedes), Iveco, MAN and Volvo/Renault — were found to have colluded in a price-fixing cartel between 1997 and 2011.
If the RHA’s action is successful, then any firm, company or individual purchasing a truck of six tonnes or more between January 1997 and January 2011 (as well as for a certain period after January 2011 — until prices returned to normal competitive levels) stands to receive some £6000 per vehicle. With over 3600 operators signing up to the RHA’s compensation initiative, and with more in the process of doing so, the Association estimates that payments could be due in respect of more than 160,000 trucks. That number is, however, far below the 600,000 truck sales that the RHA estimates took place in the UK between 1997 and 2011 and whose purchase was likely to have been affected by the cartel’s actions. If that larger figure is accurate, then the total compensation claim in the UK alone could be worth more than £5 billion, with operators in the rest of Europe potentially owed £25 billion for the estimated 3.4 million trucks that they bought. Commenting for the RHA, Chief Executive Richard Burnett said that, if the claim is successful, there is a strong potential that the majority of the industry’s operators will benefit. “This won’t happen overnight — it’s a long process — but we will continue to push for a result that will help the thousands of operators who have been dealt a poor deal,” he concluded.
Milestone for Customs Declaration Service
The UK’s new Customs Declaration Service (CDS) has opened for business. HM Revenue & Customs (HMRC) has announced that it has successfully implemented the first software release for CDS, which means that a selected group of importers will be able to start making certain types of supplementary declarations on the system. The majority of importers will start using CDS from November 2018, once their own software provider or in-house IT team has completed development of CDS-compatible software. Exporters will start using CDS at a later date. The existing Customs Handling of Import and Export Freight (CHIEF) system will continue to operate in parallel with CDS during a transition period which is scheduled to end early next year.
The CDS will, HMRC claims, deliver a modern system for importers and exporters who have to complete customs declarations when trading outside the EU. It will, however, continue to meet the requirements of the Union Customs Code (UCC) as well as supporting the anticipated growth of UK trade. Describing the software release as a major milestone, Kevin Franklin, HMRC’s Customs Transformation Programme Director, said that going live on time was a great step towards fully introducing the new system. Software providers are advised to consider what changes will be needed to their products and how they will approach the roll-out of the new system. Information about how HMRC intends to introduce the new Service can be found at www.gov.uk.
EU moves to block US sanctions against Iran
The President of the USA has signed an executive order bringing economic sanctions against Iran back into place. Donald Trump said that the renewed economic pressure will force Iran to agree to a new deal and end its “malign” activities. However, the EU has strongly opposed Mr Trump’s plans to tear up the Iran nuclear deal and has introduced legal measures to protect European companies from the effects of the US sanctions. It has updated what is known as the Blocking Statute which it introduced in 1996 (by way of EC Regulation 96/2271) in response to previous extraterritorial sanctions legislation brought in by the USA. The revised Statute forbids EU companies from complying with the listed extraterritorial legislation unless they are exceptionally authorised to do so by the European Commission. It also allows EU operators to recover damages arising from such legislation from the persons or entities causing them and nullifies the effect in the EU of any foreign court rulings based on that legislation.
EU companies are advised to inform the European Commission — within 30 days — of any events arising from listed extraterritorial legislation that would affect their economic or financial interests. They will then be able to claim compensation by way of an action brought before the courts of the Member States. The recovery can take the form of seizure and sale of the assets of the person causing the damage, its representatives or intermediaries. As in any litigation for damages, it will be for the judge to assess the merits of the specific case. The amendments to EC Regulation 96/2271 can be found at eur-lex.europa.eu (EU Regulations 2018/1100 and 2018/1101).
EU starts trade talks down under
Immediately after signing the EU-Japan Economic Partnership Agreement, the European Commission returned to the negotiating table to open talks with Australia and New Zealand. The first round of trade talks has already been held with representatives from the two countries (in Brussels) and will be followed by more discussions in the southern hemisphere in the autumn. A detailed report on the talks with Australia can be found here; a similar report on the New Zealand discussions is available at trade.ec.europa.eu. The EU is already New Zealand’s third largest trade partner and it is estimated that trade between the two could increase by 36%; trade in goods could increase by 47%, whereas the services trade could increase by 14%.
Similarly, the EU is Australia’s second biggest trade partner. Bilateral trade in goods between the two partners has risen steadily in recent years, reaching almost €48 billion in 2017. Bilateral trade in services added an additional €27 billion. According to an impact assessment, trade in goods and services between the two partners could increase by around a third if the current talks are successful. The Commission said that it wanted to put European companies exporting to, or doing business in, Australia on an equal footing with those from countries that have signed up to the Trans-Pacific Partnership (TPP) or other trade agreements with Australia. International Trade Secretary Liam Fox has previously said that he wants to explore the possibility of the UK joining the TPP after Brexit.
UK increases trade with EU
“As we open consultations for future trade relationships with key global markets around the world, we’re seeing a shift in the UK where we’re moving towards selling more than we buy, with exports increasing faster than imports.” That statement from International Trade Secretary Liam Fox was made in response to the latest trade figures published by the Office for National Statistics (ONS). What Dr Fox neglected to mention was that the statistics on UK trade for the second quarter of the year (Q2, available here) show that exports and imports of goods to and from the EU have been increasing by more than those with other countries. In the 12 months to June 2018, the goods deficit with the Union narrowed £1.5 billion to £95.2 billion compared with a narrowing of £1.4 billion to £41.6 billion for countries outside the EU.
While the improvement to the goods deficit was similar between EU and non-EU countries, the ONS points out that exports and imports to and from EU countries rose by a much larger amount compared to those going to and coming from elsewhere. Goods exports to the EU rose by £13.4 billion compared with £7.0 billion for non-EU countries, while imports from EU countries increased £11.9 billion compared with £5.5 billion for non-EU countries. The trade in services surplus widened £3.3 billion to £111.7 billion, due to exports rising £5.9 billion (2.2%) compared with a £2.6 billion (1.6%) rise for imports. With overall exports rising to £621 billion (up 4.4% on the same period last year) and the trade deficit narrowing by £6 billion over the last 12 months, the ONS says that demand for UK goods and services is continuing to grow. However, the three months to June also saw a widening of the total UK trade deficit, up by £4.7 billion to £8.6 billion — due mainly to falling goods exports and rising goods imports. The longer-term picture was more encouraging, with exports of both goods and services in the year to June leading to a £6.2 billion narrowing of the total trade deficit.
Gambia joins EU’s West Africa trade group
The Gambia has become the 14th West African country to sign the region to region Economic Partnership Agreement (EPA) with the EU, joining other signatories including Ghana, Senegal, Cote d’Ivoire and Sierra Leone. West Africa’s exports to the EU consist mainly of fuels and food products while its imports from the Union consist of fuels, food products, machinery, and chemicals and pharmaceutical products. The aim of this tailor-made agreement is to promote trade between the EU and African States, and contribute to sustainable development and poverty reduction. Once signed by all 16 regional partners, the agreement will be submitted for ratification. The two countries yet to agree are Nigeria and Mauritania with the former being reportedly opposed to the EPA.
The EU claims to be the world’s most open market for African exports with most African countries having fully free access to the market in its Member States. Most African countries enjoy duty-free and quota-free access to the EU market. This is either thanks to the EPAs or the Everything-But-Arms (EBA) scheme. The EBA is a one-way EU measure to support trade-driven development of least developed countries, while the EPAs establish a long-term stable free access to EU market. They are independent of future development status of participating countries, support their regional integration ambitions and facilitate import of goods necessary for industrial development while maintaining protection for sensitive African sectors, the European Commission explained.
World trade growth falling below trend
The growth of world trade seems set to slow further during the third quarter of the year (Q3 2018), the World Trade Organization (WTO) has predicted. According to the latest World Trade Outlook Indicator (WTOI), the loss of momentum reflects weakness in a number of areas including export orders and automobile production and sales. The baseline value of the index is 100, with the latest reading of 100.3 having fallen from the 101.8 previously recorded. That, the WTO explains, signals an easing of trade growth in the coming months in line with medium-term trends. In April, the WTO predicted that the growth in merchandise trade would fall from 4.7% in 2017 to 4.4% in 2018 — a forecast that it says is borne out by these latest findings.
Export orders (which recorded a value of 97.2) have declined steadily over the course of the year, while automobile production and sales (98.1) have risen slightly recently but remain below the longer-term trend. Although the indices for air freight (100.9) and container port throughput (102.2) remained in positive territory, the momentum of recent growth appears to be past its peak in both sectors. At 102.2, electronic components stayed above trend, while a score of 100.1 for agricultural raw materials moved that category from below trend to on trend. The WTOI is intended to provide real-time information on the trajectory of world trade relative to recent trends. It is not, the WTO points out, intended as a short-term forecast, even though it does provide an indication of trade growth in the near future.
Can WTO cope with all the disputes?
The USA has requested World Trade Organization (WTO) dispute consultations with the Russian Federation concerning additional duties applied by Russia on certain imports of US goods. It claims that the additional duties are inconsistent with provisions of the WTO’s General Agreement on Tariffs and Trade (GATT) 1994 because Russia does not impose the additional duties on like products from other WTO members and appears to be applying duty rates on US imports greater than those set out in Russia’s WTO schedule of concessions. At the same time China has requested WTO dispute consultations with the USA concerning additional duties applied by the USA on imports of Chinese goods. It claims that the additional tariffs, applied to $16 billion in annual Chinese imports, are also inconsistent with the provisions of GATT 1994 in that they apply solely to products of Chinese origin and exceed the US bound duty rates.
Meanwhile, Turkey has requested WTO dispute consultations with the USA concerning additional import duties imposed on its steel and aluminium products while US safeguard duties imposed on imports of crystalline silicon photovoltaic products from China are also subject to dispute. One problem with all this action at the world trade body is that some or all of these cases could eventually reach its Appellate Body where, currently, the USA is blocking appointments to two vacancies on the seven-strong Body.
With other retirements pending, it could soon be down to the bare minimum of three judges and would effectively cease to operate.
Out of Africa
With the British Government anxious to secure the country’s post-Brexit trade future as soon as possible, a high-level delegation has been sounding out the potential of Africa. Headed by Prime Minister Theresa May, a delegation to South Africa, Nigeria and Kenya has recently agreed deals valued at over £300 million. The UK sees huge potential in Africa, which is not only growing at what is described as an extraordinary rate, but which, by 2050, is expected to be home to 25% of the world’s consumers. That potential, the Government argues, represents a transformational opportunity for UK firms to increase trade with African countries — and is also the motivation behind the UK’s stated ambition to be the largest G7 investor in Africa by 2022.
Among the agreements reached by the delegation was one with the Southern African Customs Union — South Africa, Botswana, Lesotho, Namibia and eSwatini (previously Swaziland) — and Mozambique. A joint statement confirmed that the trade agreement will be ready to enter into force as soon as the EU’s Economic Partnership Agreement (EPA) no longer applies to the UK. That means, the Government has explained, that UK consumers will continue to have access to Southern African wine, tea, fruits and other goods. The deal will also allow UK firms to continue exporting goods such as cars, motor parts and pharmaceutical products into those countries. To help support British exporters, UK Export Finance (UKEF) is making an additional £5.5 billion available to eight markets across Africa: Algeria, Benin, Burkina Faso, Cote d’Ivoire, Mauritius, Morocco, Senegal and Tunisia.
Trade taskforce will support Global Britain
Businesses are to receive support to develop trade links around the world from a new taskforce which will be supported by the recently developed Trade Commissioner network. Announcing the initiative, International Trade Secretary Liam Fox said that the aim is to guarantee the UK’s status as a prominent champion of free trade leading the world in the way that it partners with developing countries to alleviate poverty. The taskforce will meet throughout the year with the Commissioners ensuring that UK companies have a competitive advantage by providing support and local market knowledge.
“Championing free trade and supporting developing nations through trade is in the UK’s interest,” Mr Fox said. “The prosperity created by free trade is the basis for social stability, which in turn provides the political stability which underpins our global security.” Speaking at the launch of the taskforce, he said that it would accelerate the Government’s Global Britain agenda, building on the Prime Minister’s recent visit to Africa.
Teesport welcomes new links to continent
In the face of continuing bad news about the UK potentially leaving the EU with no deal in March 2019, direct routes linking Teesport to both Antwerp and Dunkerque have been launched by Unifeeder. Announcing the move, PD Ports said that the new short-sea services will offer a viable alternative to using the increasingly congested European and UK hub ports. Connecting Teesport with Dunkerque will open up road cargo across mainland Europe with shorter times and distances in and out of the UK, it explained. The new Unifeeder services will complement those currently linking Rotterdam with the ports of Felixstowe, Immingham and South Shields. “Short-sea services are the lifeblood of our ports and this partnership with Unifeeder offers more routes in and out of Europe and into the UK,” Kim Catterick, PD Ports’ General Manager Key Accounts and Customer Development, said.
Using Teesport with its excellent road and rail connections, and in particular its well-established daily Scottish rail service, opens up the north of England and Scotland, she added, providing cross-channel services linking the Netherlands, Belgium, France and into Germany using road transport. There has been an increasing demand to move away from the congestion at some of the major European and UK ports, Ms Catterick continued, and using Teesport and other PD Ports locations means that the company can partner with others to offer solutions that work for both the UK and mainland European customers.
Famous food fears
The protection offered by the EU to Scotch Whisky, Scottish Wild Salmon, Stornoway Black Pudding and Orkney Scottish Island Cheddar could be put at risk by the way the UK Government is handling Brexit fears the Scottish Government’s Cabinet Secretary for Rural Affairs, Fergus Ewing. Those products and others are currently covered by Protected Geographical Indications (PGIs) — a system that Mr Ewing wants the UK Government to commit itself to keeping after Brexit.
Taiwan welcomes British pork
In what it describes as a significant development for pork exporters, the Department for Environment, Food & Rural Affairs (Defra) has announced that Taiwan is to accept imports of British pork. In a deal said to be worth more than £50 million over the next five years, UK exporters will also be able to ship parts of the pig carcass that are not commonly purchased in the UK, such as offal. Exporters will be able to take advantage of the new market once the administrative listing process is completed and export certification is made available.
Publish “no deal” guidance says IoD
With Bank of England Governor Mark Carney warning that the possibility of a no-deal Brexit is “uncomfortably high”, the Institute of Directors (IoD) has called on the Government to speed up publication of its guidance on that possibility. “Many companies are still unprepared for Brexit, and it’s hard to blame them,” said IoD Director General Stephen Martin. “When it comes to knowing what to plan for and when, firms have been left in the dark.”
EU27 given Brexit advice
The European Commission has set out what the other 27 EU Member States should be doing to prepare for Brexit. In Preparing for the Withdrawal of the United Kingdom from the European Union on 30 March 2019, the Commission highlights the immediate changes that will occur when the UK leaves and becomes a “third country” including new controls at the EU’s outer border with the UK, the validity of UK-issued licences, certificates and authorisations, and different rules for data transfers.
Two possible scenarios are envisaged: if the Withdrawal Agreement is ratified before 30 March 2019, EU law will cease to apply to and in the UK on 1 January 2021; but if it is not ratified, there will be no transition period and EU law will cease to apply to and in the UK as of 30 March 2019 (the “no deal” or “cliff-edge” scenario).
Small exporters worry about no deal…
Small firms in the UK would be disproportionately hit by a disorderly Brexit warns the Federation of Small Businesses (FSB), with many worried they will be faced with customs declarations. Well, over half (59%) of small businesses that export goods to the EU Customs Union worry that trade would be impacted if overall costs increased as a result of having to complete additional declarations, with about 1 in 10 (11%) saying it would cause them to stop exporting to the EU altogether.
The FSB’s Martin McTague wants the Government to deliver a “pro-business Brexit” based on easy trade, access to talent and a transition period, with the last of those meaning that small firms would face just one set of changes and so could continue to operate broadly as they currently do until 31 December 2020.
… as do UK ports
The British Ports Association (BPA) has also highlighted the potential impact on trade of a no-deal Brexit, with particular concern expressed about the impact it could have on roll-on roll-off (Ro-Ro) operations. The Government should start to seriously plan for the allocation of funding for post-Brexit physical and electronic border infrastructure said the BPA’s Chief Executive, Richard Ballantyne, in order to ensure that ports are free flowing the day after the UK leaves.
Without an agreement, goods travelling to and from Europe will be subject to new authorisations and other requirements he noted, and traders will need to undertake new border processes — which could be most challenging for freight on lorries travelling through Ro-Ro ferry port gateways, such as Dover, Holyhead, Immingham and Portsmouth. Although most other types of ports handling bulks and containerised cargo should find new customs procedures relatively straightforward to comply with, added Mr Ballantyne, questions remain about inspections such as port health standards which are mandated under EU law.
How do you feel about trade remedies?
The Department for International Trade (DIT) wants UK producers and product users to help identify which existing EU anti-dumping or anti-subsidy measures should be maintained when the UK begins to operate an independent trade remedies framework.
Analysis of responses to an earlier consultation suggests that 42 existing EU measures should be maintained, with appropriate levels of duties to be set, while 72 measures were found not to warrant review and will not be kept post-Brexit. Details of the call for evidence can be found at www.gov.uk. The deadline for responses is 24 August.
Public to have say on post-Brexit trade deals
Public consultations have been launched on potential free trade deals with the USA, Australia and New Zealand as well as the UK’s move to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). All four consultations are open until 26 October and can be found at consultations.trade.gov.uk. They are intended to indicate the UK’s immediate negotiating priorities as soon as it leaves the EU and also to enable people to share their views both on which areas matter to them most and any concerns they might have.
Huge fines for consumer electronics firms
Four consumer electronics manufacturers are facing penalties totalling over €111 million for breaking EU competition rules. Asus (headquartered in Taiwan), Denon and Marantz (Japan), Philips (the Netherlands) and Pioneer (Japan) were accused by the European Commission of imposing fixed or minimum resale prices on their online retailers.
Retailers that did not comply with the manufacturers’ pricing requests faced threats or sanctions such as blocking of supplies. As a result, millions of European consumers paid higher prices for kitchen appliances, hair dryers, notebook computers, headphones and many other products, said Competition Commissioner Margrethe Vestager. Asus was the hardest hit of the four as, despite securing a 40% reduction for co-operating with the Commission’s investigation, it is looking at having to pay out over €63 million for breaking EU competition rules.
Securing global trade
A new version of the international standards aimed at securing and facilitating global trade has been issued by the World Customs Organization (WCO). The 2018 edition of the SAFE Framework of Standards addresses in particular the need to strengthen co-operation between and among customs administrations, such as through the exchange of information and the mutual recognition of Authorised Economic Operators (AEOs).
Available here, the Framework also calls for enhanced customs co-operation with government agencies responsible for regulating certain goods (such as weapons and hazardous materials) and passengers, as well as with bodies responsible for postal issues.
VAT Brexit bombshell
The British Chambers of Commerce (BCC) has warned that amendments to the Customs Bill which would commit the Government to fully separating the UK from the EU’s VAT regime are set to create significant ongoing costs for businesses trading across borders, unless special workarounds are put in place. At the moment, firms trading with the EU report every quarter on what they have imported and exported, with a VAT bill calculated afterwards. Without a more generous deferment account scheme or postponed accounting, the BCC suggests, many companies face severe cash flow issues, big new administrative headaches and a serious loss of competitiveness.
“For businesses, VAT isn’t some obscure technicality,” said BCC Director General Adam Marshall. “A clear, easy-to-use VAT system is crucial for businesses to trade successfully with partners in Europe — and around the world.”
Defending EU trade
The European Commission’s latest Annual Report on the EU’s Anti-dumping, Anti-subsidy and Safeguard Activities reveals that in 2017 the number of new investigations remained at a high level, while the number of investigations initiated to decide whether existing measures should be extended for a new period (expiry reviews) increased by 75% compared to 2016.
At the end of 2017, the EU had 97 definitive anti-dumping measures and 13 countervailing measures in force (which represented a 4% increase over the previous year), plus 46 ongoing investigations. Anti-dumping or anti-subsidy measures were found to affect 0.31% of total imports into the EU last year, with evidence from expiry reviews suggesting that the imposition of trade defence measures significantly reduced imports of the products concerned.
G20 trade restrictions
Tariff increases, stricter customs procedures, imposition of taxes and export duties are among a range of trade restrictions applied by the Group of 20 (G20) countries in recent months, says the World Trade Organization (WTO) in a new report.
G20 economies applied 39 new trade-restrictive measures in the seven months from mid-October 2017 to mid-May 2018, it points out, which was well over twice the number recorded in the previous five-month period of mid-May 2017 to mid-October 2017, when just 16 new measures were identified. The majority of import restrictions introduced took the form of tariff increases (25 of 33 measures), followed by stricter customs procedures (five measures) and new taxes (two).
The cost of free trade
The potential benefits of free trade deals with non-EU countries will be outweighed by the costs of red tape associated with any new arrangement with the EU Customs Union, argues a recent report. In Costs Up, Prices Up: Brexit’s Impact on Consumer Businesses and Their Customers, management consultants Oliver Wyman say that Brexit will cause profits for consumer businesses to fall by between 1.1 and 4.2 points and suggest that free trade deals.
Growth, jobs and recovery at stake
A report from the World Trade Organization (WTO) highlights an increase in trade-restrictive measures, with WTO members having introduced more such measures from mid-October 2017 to mid-May 2018 compared to the previous review period of mid-October 2016 to mid-October 2017. The report shows that 75 new trade-restrictive measures were applied during the review period, including tariff increases, quantitative restrictions, imposition of import taxes and stricter customs regulations. That equates to an average of almost 11 new measures per month, which was higher than the nine per month recorded in the previous report. WTO members also implemented 89 measures aimed at facilitating trade during the review period, with an average of almost 13 per month introduced, including eliminating or reducing tariffs, simplifying customs procedures, reducing import taxes and eliminating import bans.
However, the value of trade covered by the restrictive measures rose and the value covered by facilitating measures fell. Describing the report’s overall message as serious, particularly at a time of heightened trade tensions and associated rhetoric, WTO Director-General Roberto Azevêdo said that growth, jobs and recovery are at stake. The report is available at docs.wto.org.
World trade facts
Data on trade-restrictive and trade-facilitating measures implemented by members of the World Trade Organization (WTO) can be found in the World Trade Statistical Review, which examines the latest trends in global trade and gives an in-depth analysis of what is being traded in goods and services, and a guide to the leading players.
Also available are Trade Profiles 2018 which provides a series of key indicators on merchandise trade and trade in commercial services for 197 economies and World Tariff Profile which offers comprehensive information on the tariffs and non-tariff measures imposed by over 170 countries and customs territories.
A last word from the WTO, which is predicting that the growth of world trade will slow further during the third quarter of the year (Q3 2018). The latest World Trade Outlook Indicator reveals a loss of momentum due to weakness in a number of areas including export orders and automobile production and sales. The baseline value of the index is 100, with the latest reading of 100.3 having fallen from the 101.8 previously recorded. That, says the WTO, signals an easing of trade growth in the coming months in line with medium-term trends.
Employers and unions unite over Brexit concerns
Organisations representing 20 million employers and 45 million workers across Europe have called for faster progress on Brexit. In what is described as an unprecedented joint statement, the CBI, BusinessEurope, the TUC and the European Trade Union Confederation (ETUC) called on the UK Government and the EU to inject pace and urgency into the negotiations. Leaders of the four organisations called for agreement on key issues, including regulatory alignment, frictionless trade and Northern Ireland. The statement confirms that employers and unions have already developed a consensus on issues such as the need to prevent a hard border on the island of Ireland, and the rights of UK citizens in the EU and EU citizens in the UK.
“We are calling on the UK and EU to consult us in a meaningful and more structured manner on a joint basis so that we can contribute to identifying and designing practical solutions that will work,” the statement reads. The cost of disagreement between the UK and the EU would be dire for firms, workers and the communities where they live, it adds, with the signatories appealing to negotiators on both sides “to put jobs and prosperity before politics when seeking solutions that will matter for generations to come”. Noting that decisions will be needed at the October Council meeting to finalise the withdrawal agreement and the transitional arrangement, the statement points out that both sides will need to agree on all aspects of regulatory alignment without jeopardising the integrity of the single market. Among other things, that must involve preserving value chains and avoiding non-tariff barriers to trade, establishing barrier-free and frictionless trade in goods and services, and reaching agreement on workers’ rights, the statement concludes.
Government urged to get real
Businesses across the UK are running out of patience with politicians, at least according to the British Chambers of Commerce (BCC) which has published 23 issues where clarity is urgently needed and pointed out that the Government has made progress on just two. These are the “top real-world questions” being asked about Brexit, the BCC claims, and answers are urgently needed so that firms can plan their trade following the UK’s departure from the EU. Director General Adam Marshall said: “Businesses have every right to speak out when it is abundantly clear that the practical questions affecting the competitiveness of their firms and the livelihoods of millions of people remain unanswered.” With barely nine months go to until Brexit day, he points out, the country is little closer to the answers businesses need than it was the day after the referendum.
The BCC accepts that there have been assurances on the status of EU nationals in the UK workforce and on the industrial standards regime so gives these two issues amber status. However, the signal is still set on red for a range of other matters including:
Tax: will a business need to pay VAT on goods at point of import and will services firms need to be registered in every EU Member State where it has clients?
Tariffs: what Rules of Origin will firms have to comply with to receive preferential tariff rates?
Customs: will goods be subject to new procedures and therefore delayed at border checkpoints?
Regulation: will checks on goods in the UK be recognised by the EU?
Mobility: will employers be able to transfer staff between the EU and the UK using the same processes as currently?
R&D: will UK businesses be able to participate in EU projects after 2020?
With the time running out ahead of the UK’s exit from the EU, Mr Marshall warns, business patience is reaching breaking point. Hitting back at politicians who have criticised businesses for speaking out on Brexit, he concluded: “These are not ‘siren voices’ or special interests. They are the practical, real-world concerns of businesses of every size and sector, in every part of the UK.”
EU business group speaks out on Brexit and customs
With the UK Government struggling to find the unity that would allow it to present a coherent plan for customs arrangements after Brexit, other organisations are filling the gap with their own suggestions. The latest to do so is BusinessEurope, a body which “speaks for all-sized enterprises in 34 European countries whose national business federations are our direct members”. It has issued Brexit: The Customs Implications and Solutions, a report which can be found here. This warns that Brexit could result in a myriad of costly customs procedures, non-tariff barriers and regulatory issues. Every degree of divergence from EU membership creates additional economic barriers, it argues. These could entail customs duties and declarations; complex rules of origin or issues of cumulation; physical and digital bottlenecks; diverging rules and legislation; a lack of mutual recognition and the introduction of conformity assessments.
BusinessEurope calls on the two sides to maintain the closest possible economic relationship while preserving the integrity of the single market. As other business groups have noted, it stresses that regulatory alignment between the EU and the UK is of utmost importance in preserving value chains and avoiding non-tariff barriers to trade. “No free trade agreement to date has come close to solving the issues of regulatory divergence,” the report warns, “and this will be a challenge for both sides to address in the framework of the future relationship.” If trade really is to stay as frictionless as possible (as the UK Government has repeated on innumerable occasions), but the UK still wants to leave the single market and customs union, then BusinessEurope points out that the two sides have to come up with simplified customs procedures. They must also start recruiting and training staff including customs officials, veterinarians and related staff such as those involved in managing sanitary and phytosanitary (SPS) issues.
Three cheers for supercharged free ports
Five of the UK’s major ports, handling over 10 million tonnes of goods and contributing £5 billion to the economy each year, are located in the north and could see considerable post-Brexit benefit from the establishment of free trade zones. This is according to a report for construction firm Mace compiled by former Treasury Economist Chris Walker. Available here, Supercharged Free Ports: The Ultimate Boost for Britain’s Economy suggests that more than 17,500 jobs could be created if free ports were created and linked to enterprise zones on Teesside, for example. Meanwhile, a free port in Hull after Brexit could make every city household £1500 a year better off.
According to the report, evidence from around the world shows that the creation of free ports — free trade zones which remove tariffs on goods passing through the port or airport — would deliver a major boost to regeneration, growth, productivity and job creation. This is, it notes, an idea which the UK is currently prevented from fully implementing due to its membership of the EU Customs Union. The report focuses on seven locations: Grimsby and Immingham; Hull; Rivers Hull and Humber; Teesport and Hartlepool; Tyne; Liverpool and Manchester Airport.
Watchdog raises alarm over customs declaration progress
The nascent Customs Declaration Service (CDS) faces significant challenges and there is a risk that it will be unable to fully replace the existing Customs Handling of Import and Export Freight (CHIEF) system by January 2019. Indeed, HM Revenue & Customs (HMRC) will not know whether CDS works in live service until all of its functionality has been implemented this December, the National Audit Office (NAO) has warned. In its latest report on the CDS, the NAO says that the late release of functionality and migration of users increases the risk that HMRC will not have sufficient time to resolve any issues that the last release might highlight and that some traders will therefore have to continue using the existing CHIEF system. Although HMRC intends to migrate users to the CDS beginning in August, and aims to complete the process by January next year, the migration of all users from the current (CHIEF) to the new (CDS) system by then seems, as the NAO puts it, “unlikely”.
However, if the CDS is not ready, does not perform as planned, if traders have not migrated to it in time, or there is no deal on Brexit, then HMRC now has more robust contingency plans in place, the NAO agrees (something it welcomes given that its previous report of July 2017 criticised HMRC for a lack of planning). For the British Chambers of Commerce, Anastassia Beliakova noted that, until the Government has decided which customs option it wishes to pursue with the EU post-Brexit, the 145,000 UK businesses that are only trading with the EU are left in the dark as to the future costs and administration they have to factor in. The NAO report, The Customs Declaration Service: A Progress Update, can be found here.
Trump tariffs will cost UK millions in lost exports
Tariffs imposed by President Trump’s administration on global steel and aluminium imports could lead to yearly export losses of £125 million for the UK, but it will be by no means the hardest hit country. According to leading trade credit insurer Euler Hermes, global export losses caused by the US decision will reach £5.57 billion with the highest losses being suffered by Canada, Brazil, Russia, China and South Korea. Canada looks likely to be the biggest single loser, Euler Hermes has calculated, suffering a £1.5 billion loss. In Europe, Germany could be the biggest loser with £300 million in lost exports, while the EU as a whole will lose around £800 million.
Despite these figures, Ludovic Subran, Chief Economist at Euler Hermes, still believes that the risk of a fully-fledged trade war — characterised by a doubling or tripling of the average US tariffs and severe retaliation from the EU, Canada and Mexico — still seems unlikely. However, he warned, the uncertainty caused by the latest wave of measures combined with tit-for-tat tariffs from other countries threatens the status quo of rules built up over the past 25 years. The most frustrating aspect of the current disputes is that they are taking place in the context of reasonably healthy global trade figures. “Encouragingly, global trade is actually doing quite well and rose by around 5% last year,” Mr Subran pointed out. “For the moment, it is outweighing the dampening effects of protectionism measures.”
Customs Union celebrates 50 years
On 1 July 1968, what was then the European Economic Community (EEC) established a Customs Union which has now reached its 50th birthday and is, at least according to the European Commission, one of the greatest achievements of what has become the EU. By abolishing customs tariffs for trade in goods, and with the customs administrations of the Member States acting as though they were one entity, it has enabled the EU to become the world’s largest trading bloc. To mark the occasion, and possibly to remind Brexiteers what they want the UK to give up, the Commission has issued a fact sheet explaining how the Customs Union helps to protect consumers and facilitate trade. “Customs prevent products from entering the Union that pose a risk to the safety or health of EU citizens,” the Commission explains. “They stop goods that have been trafficked and smuggled or present a danger to the environment and European cultural heritage, or goods which undermine the financial interests of the EU and its Member States.”
The Union Customs Code (UCC), upgraded in 2013 and applied since 2016, means that EU countries rely on the same rules and procedures for handling the import, export and transit of goods. The Commission emphasises that the EU has signed more than 50 international agreements providing for customs co-operation and mutual administrative assistance with 80 countries outside the EU to support controls and enforcement, and simplify and harmonise customs procedures. This reduces the administrative burden and costs for European companies, it points out. A new fund of €1.3 billion has also been included in the plans for the next EU budget to help Member States purchase and maintain state-of-the-art customs equipment.
Government to fast-track foreign entrepreneurs
Foreign entrepreneurs wishing to start a business in the UK will soon be able to benefit from a new visa system. Home Secretary Sajid Javid has announced that a new “start-up” visa will be available from Spring 2019. It aims, he said, to make the visa process faster and smoother for entrepreneurs coming to the UK and should widen the pool of talent available to the country. The new visa route will require applicants to have obtained an endorsement from a university or approved business sponsor.
The UK can be proud that it is a leading nation when it comes to technology and innovation, Mr Javid said, but must do more to attract businesses with the migration system having a key role to play. “That’s why I am pleased to announce a new visa for people wanting to start a business in the UK, which will help to ensure we continue to attract the best global talent and maintain the UK’s position as a world-leading destination for innovation and entrepreneurs,” he said. The Home Secretary said that further details of the start-up visa will be announced in due course.
EU targets VAT fraud
One of the concerns that the EU has about the UK’s proposals for a trading arrangement after Brexit is whether it will result in more attempts at VAT fraud. This is a perennial problem for the Member States and, faced with annual losses of some €50 billion due to cross-border fraud, they have agreed new measures to tackle the problem. Proposed by the European Commission last November, the measures aim to build trust between Member States so that they can exchange more information and boost co-operation between national tax authorities and law enforcement agencies. The Commission has identified three main issues that the EU faces in this area: missing trader fraud and carousel fraud; VAT fraud arising from imports from outside the EU and VAT fraud in the sale of second-hand cars.
It is anticipated that, by focusing on strengthening co-operation between Member States, the new rules will enable fraud — including that which takes place online — to be tackled more quickly and efficiently. Among other things, information and intelligence on organised gangs involved in the most serious cases of VAT fraud will now be systematically shared with EU enforcement bodies. The agreement approved by economy and finance ministers will also strengthen Eurofisc — an existing network of national tax officials which exchanges information on VAT fraud. Although the legislation is expected to be published shortly, its application is to be deferred until 1 January 2020 in order to allow the technical changes required to enable information held by the various authorities concerned to be exchanged.
A new UK-EU free trade area promised
The Government plans to maintain frictionless trade in goods between the UK and the EU while at the same time being free to strike new trade deals around the world. Exactly how it plans to achieve this is set out in a 100-page White Paper, The Future Relationship Between the United Kingdom and the European Union. Available here, the Paper caused the resignations of both Brexit Secretary David Davis and Foreign Secretary Boris Johnson before it was officially published. According to the new Brexit Secretary, Dominic Raab, it will “cater for the deeply integrated supply chains that criss-cross the UK and the EU, and which have developed over our 40 years of membership”.
On matters of trade, the White Paper envisages the UK maintaining a common rulebook for all goods with the EU, including agricultural products, after Brexit. Parliament will, however, be able to choose to diverge from EU rules (although the Paper notes that this will have an impact on “frictionless trade”). The Government accepts that the European Court of Justice (ECJ) will still be the interpreter of EU legislation but envisages “binding independent arbitration” in case of trade disputes as the EU Court cannot be allowed to resolve disputes between the two sides. The White Paper suggests that the UK would apply its own tariffs and trade policy for goods intended for this country and the EU’s tariffs and trade policy for goods intended for the Union.
The phased introduction of this Facilitated Customs Arrangement would remove the need for customs checks and controls between the UK and the EU as if they were “a combined customs territory”. The UK will also accept the rules of those EU agencies that provide authorisations for goods in highly regulated sectors — namely the European Chemicals Agency, the European Aviation Safety Agency and the European Medicines Agency, and “contribute to their costs”. The White Paper also envisages new arrangements on services and digital, “providing regulatory freedom where it matters most for the UK’s services-based economy” and new economic and regulatory arrangements for financial services, preserving the mutual benefits of integrated markets but noting that these arrangements will not replicate the EU’s passporting regimes.
Car wars loom as EU fights back
The USA has launched what is known as a Section 232 National Security Investigation of Imports of Automobiles, Including Cars, SUVs, Vans, Light Trucks and Automotive Parts. The EU has now asked to participate in the public hearing to be held by the US Department of Commerce on 19 and 20 July. It has also submitted written comments. The European Commission takes the view, as was the case with the section 232 action on steel and aluminium tariffs, that this current investigation lacks legitimacy, factual basis and violates international trade rules. “The EU reiterates its firm opposition to the proliferation of measures taken on supposed national security grounds for the purposes of economic protection,” it said. “This development harms trade, growth and jobs in the US and abroad, weakens the bonds with friends and allies, and shifts the attention away from the shared strategic challenges that genuinely threaten the market-based Western economic model.”
The Commission has pointed out to the US authorities that there is no economic threat to the country’s automobile industry which is healthy, having steadily expanded domestic production in the last 10 years. Furthermore, imports of European automobiles into the USA are stable, in line with national production and responding to market signals. The Commission has also warned the USA that, on the basis of the current section 232 investigation, a very significant volume of US exports could be affected with action taken in response. This is estimated at US$294 billion (or around 19% of US total exports in 2017). “Trade restrictive measures would be contrary to international trade rules,” the Commission said. “There are no exceptions under the General Agreement on Tariff and Trade (GATT) that justify import restrictions by a developed country to protect a domestic industry against foreign competition, unless in the form of permitted trade remedy measures.”
EU gears up for action against US
Additional duties are to be imposed on a range of products from the USA after European Commissioners endorsed a decision to retaliate against the recent tariffs applied by the USA on imports of steel and aluminium from the EU. Commissioners agreed that selected imports from the USA should be subject to additional duties, which are expected to apply in the near future. The additional duties range from 10% to 50% and cover a wide range of items, including: playing cards (10%); cranberry juice (25%); cast steel tubes or pipe fittings (also 25%); paper hand towels (35%) and cordless infrared remote control devices for video game consoles (50%). The full list of products concerned and the duties which will apply to them can be found at trade.ec.europa.eu.
In total, the theoretical additional duty collected will amount to $1.6 billion the Commission calculates which is far below the estimated €6.4 billion impact that the US measures will have on EU exports. The EU is therefore reserving the right to impose further measures at a later stage (either in three years’ time or after a positive finding in a World Trade Organization (WTO) dispute settlement procedure if that is made sooner). The imposition of rebalancing duties is part of what the Commission describes as a three-pronged response to the US action, with the other two elements being the launch of legal proceedings against the USA in the WTO and the possible triggering of safeguard action to protect the EU market from disruptions caused by the diversion of steel from the US market.
EU set to sign its biggest ever bilateral trade deal
Former Government Minister Owen Patterson recently said in a radio interview that the UK had to leave the EU because the Union was incapable of completing trade deals. The EU might beg to differ as its Member States have just given the go-ahead to the European Commission to sign the EU-Japan Economic Partnership Agreement (EPA).
After leaders from the two sides sign the agreement at this week’s EU-Japan summit, the European Parliament is expected to vote on it in the autumn. Once procedures are finalised both at the EU level and in Japan, the agreement will enter into force in early 2019. Trade Commissioner Cecilia Malmström said: “The EU-Japan Economic Partnership Agreement is the biggest and most advanced bilateral agreement ever negotiated by the European Union. It creates a free trade zone covering 600 million people and a third of global GDP.”
The EPA will eliminate the vast majority of duties paid by EU firms and simplify customs procedures across the board, she went on. The Commissioner also highlighted that the deal will send a powerful signal that two of the world’s biggest economies reject protectionism. Despite facing trade barriers when exporting to Japan which make it hard for them to compete, EU firms already export over €58 billion in goods and €28 billion in services to that country every year. Full details of the Agreement can be found in a Commission Memo. This explains that it includes provisions to extend into Japan the protection enjoyed in the EU by certain agricultural products under the Geographical Indications (GIs) scheme. Among the protected products are Melton Mowbray pork pies, Scotch whisky, Cornish pasties, Yorkshire Wensleydale cheese and Cornish clotted cream.
Vietnam ready to join the EU trade agreement club
The latest country to complete its trade talks with the EU is Vietnam, described by Trade Commissioner Cecilia Malmström as one of the fastest growing countries in southeast Asia. It is, she went on, a market with significant potential for the EU’s agricultural, industrial and services exports. Commissioner Malmström and Vietnamese Minister for Trade and Industry Trần Tuấn Anh have agreed on a final text for the EU-Vietnam trade agreement, formally concluding the legal review of the document. They also concluded discussions on an Investment Protection Agreement (IPA). The Commission will now translate the trade agreement text into the other 22 EU official languages and launch the legal review of the IPA text, paving the way towards the signature and conclusion of these two agreements.
Vietnam has, she noted, become the EU’s second biggest trading partner in the Association of Southeast Asian Nations (ASEAN) — after Singapore and ahead of Malaysia, with trade worth €47.6 billion in 2017. The trade agreement will eliminate nearly all tariffs (over 99%). Vietnam will liberalise 65% of import duties on EU exports to Vietnam at entry into force, with the remainder of duties being gradually eliminated over a 10-year period. The agreement will also contain specific provisions to address non-tariff barriers in the automotive sector and will provide protection for traditional European food and drink products in Vietnam. As well as offering significant economic opportunities, the Commission stressed, the trade agreement also includes a comprehensive chapter on trade and sustainable development. This sets the highest standards of labour, safety, environmental and consumer protection as well as strengthening joint actions on sustainable development and climate change, and fully safeguarding public services.
China lifts British beef ban
British beef producers will soon be able to export their produce to China after a 20-year long ban has been lifted. Describing China’s decision to stop its restrictions as a landmark move, the Department for Environment, Food & Rural Affairs (Defra) predicted that the export opportunities could see British producers generate £250 million over the first five years of a new market access agreement. The prohibition on imports of British beef was introduced in the aftermath of the BSE outbreak. The decision to lift the ban was taken, Defra explains, after several years of site inspections and negotiations between British and Chinese officials. With the ban lifted, market access negotiations are expected to take about three years.
Exporters face increasing trade barriers
The tendency of some countries to adopt an increasingly protectionist stance to trade has seen a record number of trade barriers erected in the last year. According to the European Commission’s annual Report on Trade and Investment Barriers, 2017 saw 67 new barriers recorded. That, the Commission points out, takes the total of existing obstacles implemented by just 57 different trading partners around the world to 396. The largest increase in new barriers last year was seen in China (10), followed by Russia (6), South Africa (4), India (3) and Turkey (3). In terms of the highest number of barriers in place (as opposed to those recently introduced), Russia leads the way with 36, followed by China with 25 and Indonesia with 23. For its part, the EU lifted — either fully or partially — 45 obstacles to trade in 2017. The barriers removed spanned 13 key EU export and investment sectors, including aircraft, ICT and electronics, machinery, steel and services.
Gatwick links to gateway into central and western China
Chengdu is China’s fourth biggest city, hosting over 270 Fortune 500 companies, so Gatwick airport sees the new route it has established as playing an important role connecting the UK to global markets, post-Brexit. Air China has opened the UK’s only non-stop service between the UK and Chengdu — the capital of Sichuan province. The new three-times-weekly service has the capacity of over 45,000 seats, and over 1500 metric tonnes of cargo per year, flying to a city known as a hub for scientific and technological innovation and with a current focus on attracting foreign start-up companies to take up residency. An Airbus A330-300 will leave from Gatwick on Tuesdays, Fridays and Sundays at 2200 and arrive at Chengdu at 1540. Passengers will then have 50 onward domestic connections available, in addition to international connections to Bangkok, Colombo, Hong Kong, Kathmandu, Osaka, Singapore, Sydney, Seoul, Taipei and Tokyo. Those making international connections will be allowed to stop over in Chengdu for 72 hours without needing a visa.
Guy Stephenson, Chief Commercial Officer, Gatwick Airport, said: “Chengdu is a strategically important destination and a major logistical hub so this new route — the UK’s only direct flight — opens up a range of opportunities to access markets throughout central and western China, be it by air, road or rail.” Chengdu has been described as China’s largest western transport and logistics hub. This development is boosted by the nation’s Belt and Road initiative to stimulate trade and economic growth across Asia and beyond into Europe.
Rules of Origin and frictionless trade
When the UK finally leaves the EU, it will become what the EU calls a “third country” (a non-member). One of the consequences of that new status will be that UK businesses will no longer benefit from preferential trade arrangements agreed by the EU with other countries. In particular, both importers and exporters will have to get to grips with Rules of Origin (ROO) requirements, explained by the European Commission in a recent notice. Among the points made by the Commission are that UK materials or processing operations (aka “inputs”) will be considered as “non-originating” under a preferential trade arrangement for the purpose of determining whether the goods incorporating them are entitled to preferential tariff treatment.
For goods exported from the EU, an EU free trade agreement (FTA) partner country might consider that goods having an EU preferential origin before the UK’s withdrawal date no longer qualify, due to UK inputs no longer being considered as EU content. Similarly, for goods imported into the EU, UK inputs incorporated in goods obtained in third countries with which the EU has preferential trade arrangements and imported into the EU as of the withdrawal date will be considered non-originating. Exporters in third countries might, therefore, have to prove the EU preferential origin of the goods they wish to send to the EU.
This may sound very technical but the Dutch Government has already advised its manufacturers who buy components from the UK that they might want to start looking at suppliers from within the EU27 to ensure that they do not fall foul of ROO rules after Brexit. Customs delays are likely to appear as the application of ROO will require checks — something that could become a hurdle to manufacturers who often work on a precise, and often last minute, schedule to avoid storage.
Post-Brexit trade quango will take on EU role
In post-Brexit UK, responsibility for investigating unfair practices in international trade will be taken on by a new UK agency. The Trade Remedies Authority (TRA) will take over the role presently practised by the European Commission. Confirming that the new agency will be based in Reading, the Department for International Trade (DIT) said that its powers are currently being created under the Trade Bill and the Taxation (Cross-Border Trade) Bill, both of which passed their committee stage in Parliament earlier this year. Once the UK has left the EU, companies will be able to ask the newly-created TRA to undertake investigations on their behalf if they feel they have been subjected to unfair practices. Where their concerns are found to be justified, they can expect the authority to recommend appropriate action, such as imposing tariffs on goods entering the UK.
New trade defence rules now in force
Changes aimed at modernising EU anti-dumping and anti-subsidy rules have now entered into force after the first major overhaul of the bloc’s trade defence instruments in 15 years. A key element of the changes is the ability of the EU to impose higher duties by changing the “lesser duty rule”. This will enable the Union, in certain anti-subsidy and anti-dumping cases where imports have been produced using raw materials and energy provided at an artificially low price, to impose duties at the level of the dumping or subsidy margin. The previous approach was to apply them at a level lower than the full extent of dumping or subsidisation if that was sufficient to remove the injury suffered by the EU sector concerned.
The new regime also cuts the amount of time taken to impose provisional anti-dumping measures, with the previous nine-month period for that to happen reduced to seven or eight months after an investigation is initiated. The European Commission says that an investigation will thereby be shortened by between 1 and 14 months. EU businesses are also set to benefit from an early warning system, which will tell them if provisional duties are to be imposed, while the Commission will provide support to small and medium-sized enterprises (SMEs) to help make it easier for them to participate in trade defence proceedings. Details of the new measures can be found at trade.ec.europa.eu and apply to all new investigations. EU Trade Commissioner Cecilia Malmström said: “Now we are better equipped to stand up for our companies if other countries don’t stick to the rules.”
Customs cost row rumbles on
Whichever of the two options being considered by the Cabinet to replace the existing customs union with the EU is chosen, it will not be in place before Brexit happens, and one of them will cost businesses in the UK billions. This possibility was explained to Members of Parliament’s Treasury Committee by Jon Thompson, Chief Executive of HM Revenue & Customs (HMRC), the man charged with examining the practical problems of implementing the two systems. The Prime Minister is said to favour a “customs partnership” under which the UK would collect tariffs set by the EU customs union on goods coming into the country. Some members of her Cabinet, including particularly Foreign Secretary Boris Johnson, have backed what is known as the maximum facilitation (max fac) option, relying on technology and trusted trader arrangements to minimise customs checks at borders.
However, according to Mr Thompson’s calculations, firms would have to pay £32.50 for each customs declaration under the latter system — adding up to between £17 billion and £20 billion a year (more than the UK paid the EU in 2016). The customs partnership model could end up being cost neutral but, according to Nicky Morgan, who chairs the Committee: “It will take three to five years to get new customs arrangements in place depending on which of the two options is chosen, but that can’t even start until a political decision has been made.” Downing Street responded to his evidence to the Committee by saying: “The Prime Minister has asked for work to be done on both customs models. That work is ongoing and therefore any speculation about implementation is just that.”
… and on
Recent revelations by HMRC about the possible cost of customs checks after Brexit (see above) have done little to settle business nerves about what lies ahead. Nor will export directors be feeling any more relaxed after leading accountancy firm RSM calculated that the additional costs arising from post-Brexit customs changes could be even higher than the £20 billion revealed to the Treasury Select Committee. Brad Ashton, indirect tax partner at RSM, said: “Whilst HMRC has taken a rough median cost of £32.50 for a customs declaration, the actual cost is more likely closer to £40 — costs for similar customs declarations in the EU tend to be higher.”
He also highlighted that the lead time required for both solutions currently under consideration by the Cabinet would probably require an extension to the transition period, as they tend to rely on technology which is not yet in place or on co-operation with the EU that has not yet been agreed. One of those alternatives — the so-called Max Fac option — has been totally dismissed by the manufacturers’ organisation, EEF, with the idea that it could be implemented by 2020 described as “naïve” and “wholly unrealistic”. EEF Chief Executive Stephen Phipson wrote to Business Secretary Greg Clark describing a recent visit during which he was able to see at first-hand how technology operates across the US/Canada border. Mr Phipson revealed that, despite a decade of substantial investment on both sides of the border by two willing partners, only 100 of the most trusted Canadian companies are able to use a “fast track” system across the border. The vast majority of goods are, he warned, still subject to normal customs checks.
… and on
Eurotunnel has also joined the debate with a warning that UK businesses and consumers will face serious economic costs if the Government adopts either of the post-Brexit customs models being considered by the Cabinet. Nothing can be done until the Government and the EU decide which system they want to use, Eurotunnel’s Director of Public Affairs John Keefe said, and it could then take several years to build the system, develop the necessary infrastructure, recruit and train new staff and educate transporters from across Europe in its use.
Where does the buck stop with the backstop?
According to the Institute of Directors (IoD), business leaders have welcomed the Government proposal “on a UK-wide backstop” if it cannot agree a Brexit deal with the EU while the British Ports Association (BPA) also agreed it was a good idea. But with the man in charge of the Brexit negotiations, David Davis, threatening to resign over it — and Foreign Secretary Boris Johnson warning of a Brexit “meltdown” if the Prime Minister fails to develop Trump-like, aggressive, bargaining skills — it seems that not everyone agrees.
As the name implies, the backstop may never be needed. That certainly is the view of the Prime Minister who continues to insist that a deal will be struck with the EU which will render it unnecessary. The EU has its doubts, given the Mrs May’s oft-stated red lines, which is why it is insisting that, if all else fails, a plan be put in place to avoid the one result that no-one wants: a hard border in Ireland. That plan would see the UK match EU trade tariffs temporarily and it is with that last word that Mr Davis found fault: he wanted a date, not an indefinite arrangement until something more definitive could be agreed. What he got was the addition to the Technical Note: Temporary Customs Arrangement of the phrase: “The UK expects the future arrangement to be in place by the end of December 2021 at the latest.” So that is one further year after the proposed transition period which already takes the UK departure date up to December 2020.
EU looks at post-Brexit WTO tariff rate quotas
With Brexit negotiations on the UK side seemingly mired in arguments about the customs union, the EU has started to make detailed preparations for the eventual break up. It has now issued a draft regulation on dividing up tariff rate quotas (TRQs) included in the World Trade Organization (WTO) schedule following the withdrawal of the UK from the Union. Available at eur-lex.europa.eu, this explains that Brexit has implications beyond the bilateral relationship between the EU and the UK, in particular with regard to their commitments under the Agreement establishing the WTO, of which both are original members.
The EU’s schedule of concessions and commitments under that agreement therefore contains commitments which are also applicable to the UK in its capacity as a WTO member. “As far as the EU is concerned,” the European Commission has said, “its concessions for goods will remain applicable to its territory, but the EU’s existing quantitative commitments, notably the TRQs, will require certain adjustments to reflect the UK’s withdrawal from the Union.” The adjustment of the EU’s TRQs will involve a division of the existing quantities between the UK and the EU to become effective on the date the UK is no longer covered by the EU’s WTO schedule. However, this will mean consulting and negotiating with other WTO members who are affected by the changes and the Commission has acknowledged that these may not be concluded before the Brexit time limit expires. In which case, the draft regulation will provide the Commission with the necessary powers to consequently amend the relevant EU provisions on the opening and implementation of the relevant TRQs.
Impact of new emission rules on industry
While the EU tends to allow a long lead-in period for some of its legislation, this is not always a total success: sometimes businesses only start to take notice when the implementation period has almost run out. This could be the case with amendments to the Industrial Emissions Directive (IED), according to a leading water and waste water management company which has warned that thousands of British companies face potential fines and disciplinary action, including the closing of facilities, due to the far-reaching effects of new tightened rules under the IED. These are set out in “best available techniques” (BAT) or BAT reference document (BREF) requirements, set to come into force later this year. Declan Maguire, Operations Director at Alpheus Environmental, has suggested that new obligations are only now becoming apparent as sectoral guidelines come into place. “Companies that were previously IED compliant will suddenly become non-compliant as they fail to achieve the new standards. If companies are not proactively establishing baseline reports of emissions and addressing deficiencies it will lead to penalties and ultimately facility closures, and no business can sustain this.”
Under the IED, companies are already obliged to reduce harmful industrial emissions, including emissions of waste water and generation of waste, and these rules will become more stringent once the new BREFs are in force. It is expected that guidance documents currently under preparation by the European Commission will include increased responsibilities in the design, construction, and operation of industrial facilities, specifically including water treatment. According to Mr Maguire, companies in water-intensive industries, such as food and beverages, electronics, leisure, alcohol, manufacturing and pharmaceuticals, will be most affected by the new responsibilities. And despite Brexit, he concluded, industry experts believe these rules will still be maintained in UK law.
Tunisia trade talks trundle on
As the UK continues to worry about what trade deals it might be able to agree following Brexit, the EU has continued to move forward with yet more negotiations. The latest news from Brussels is that a second series of substantive talks have been held between negotiators from the EU and Tunisia. As an indication of how long such deals can take to agree, however, it should be noted that negotiations for a Deep and Comprehensive Free Trade Area (DCFTA) between the two sides were launched in October 2015, with an initial negotiating round taking place in April 2016. Meeting in Tunis at the end of May this year, delegates from the two sides focused on identifying issues that will require particular attention during the course of 2018 if the stated aim of achieving a political conclusion by 2019 is to be met. Building on the existing EU-Tunisia Association Agreement (which entered into force in 1998), the DCFTA is intended to create new trade and investment opportunities, and to ensure better integration of Tunisia’s economy into the European Single Market. It also aims to support ongoing economic reforms in Tunisia and to bring relevant Tunisian legislation closer to that of the EU.
EU ready for trade negotiations down under
The EU Member States have given the European Commission the negotiating directives it needs to begin talks with Australia and New Zealand about free trade agreements (FTAs). Despite the distance, the Commission has pointed out, trade between the EU and these two countries is already roughly the same as with Mexico or Canada, and having FTAs with Australia and New Zealand would provide EU businesses with a valuable entry point into the wider Asia-Pacific region. Highlighting that the two sides were already close in terms of shared values and an open, global outlook, Trade Commissioner Cecilia Malmström said: “This is great news. We look forward to adding Australia and New Zealand to the EU’s ever-growing circle of close trading partners.”
Starting these talks between like-minded partners, she went on, sends a strong signal at a time where many are taking the easy road of protectionism. The first round of talks between the teams of negotiators will take place in Brussels in July 2018. A Commission factsheet on the future negotiations, emphasising that Australia and New Zealand are among the fastest growing developed economies, can be found here.
A bad day for world trade
On 1 June 2018, the USA started imposing additional duties of 25% on imports of steel from the EU and 10% on imports of aluminium. The US announcement took the EU by surprise, as it was believed that exemptions previously agreed with the bloc — and also with Canada and Mexico — would be extended. China was hit by exactly the same tariffs in March this year, but negotiations between the USA and the EU, Canada and Mexico were generally expected to result in the threat against them being dropped. The Secretary of State for International Trade, Liam Fox, described the US move as “patently absurd” and said that the UK was prepared for a “tit-for-tat” response. Speaking for the EU, Trade Commissioner Cecilia Malmström said that President Trump’s decision marked a bad day for world trade.
The Commission confirmed that it would open a dispute settlement case at the World Trade Organization (WTO) and would also impose “rebalancing measures” and take any necessary steps to protect the EU market from any trade diversion caused by the US action. It has also drawn up a target list of 100 US goods worth €2.8 billion, which is reported to include Bourbon whiskey, Levi’s jeans and Harley-Davidson motorbikes. Speaking for the British Chambers of Commerce (BCC), Dr Adam Marshall observed that, as the UK leaves the EU, the US decision to impose punitive tariffs is a reminder that self-interest looms large in trade negotiations. Ministers, he suggested, should reflect on this carefully before they pursue any future trade deal between the UK and the USA.
EU moves on US tariffs
The EU has published a list of products from the USA which might become subject to additional import duties. Drawn up in response to the announcement by the Trump administration that it plans to introduce tariffs on steel and aluminium imports, the EU move seeks to compensate for the impact of those measures if they enter into force. Following publication of the list in the EU’s Official Journal, the European Commission has notified the World Trade Organization (WTO) of its existence, thereby enabling it to legally suspend trade concessions to the USA should it decide to do so. The list of US goods that could be affected by EU action can be found in EU Regulation 2018/724 on Certain Commercial Policy Measures Concerning Certain Products Originating in the United States of America. This can be found at eur-lex.europa.eu (products are listed by Combined Nomenclature (CN) code).
Government sets out position on US tariffs
The Department for International Trade (DIT) and the Department for Business, Energy and Industrial Strategy (BEIS) have issued a joint statement on the decision of the USA to impose tariffs on aluminium and steel imports. In force since 1 June, the tariffs are set at 10% on imports of aluminium and 25% on imports of steel into the USA from the EU, Canada and Mexico (the same tariffs have applied to China since March). The statement argues that the US move is unjustified and that the Government will continue to work with the EU to secure a European exemption from the tariffs.
Despite the countrywide application of the tariffs, it is still possible for specific products to be exempted from them. How such exemptions can be achieved is one of the issues addressed in the DIT/BEIS statement.
The tariffs imposed under s.232 of the US Trade Expansion Act of 1962 include provision for individual companies to seek an exemption for their products, it explains. That process is being led by the US Commerce Department, with the DIT and BEIS supporting British firms if they wish to seek exemptions. Details can be found at www.gov.uk, but, in brief: only companies with business activities in the USA can apply (UK firms without a presence in the USA must work with end users to apply for an exemption) and approved product exemptions will only apply to the US firm applying (that is, each end user must apply separately even if they obtain their products from the same producer).
TIR to transform trade for China
By allowing customs-sealed vehicles and freight containers to transit countries with minimal border checks, the newly-introduced Transports Internationaux Routiers (TIR) system is anticipated to offer time savings in China of up to 80%. Connecting 73 countries across the world, the global customs transit standard has been heralded as a cornerstone of China’s Belt and Road initiative, which aims to boost economic and trade development. “TIR is set to transform China’s links with its neighbours, bringing benefits across the region and facilitating the goals of the Belt and Road initiative,” Umberto de Pretto, Secretary General of the International Road Transport Union (IRU) claimed.
China ratified the UN TIR Convention in July 2016. With the potential to increase the total trade volume in China and other major countries along the Belt and Road route by up to $13.6 billion (or 1.4% of China’s total volume of trade exports) the activation of TIR will see not only see Chinese goods moving globally with greater efficiency, but also foreign imports moving more quickly and safely. Six Belt and Road gateways have been designated to start TIR operations. They are: Dalian in Liaoning (the trade gateway to the Pacific); Erenhot in Inner Mongolia (bordering Mongolia); Horgos in Xinjiang (bordering Kazakhstan); Irkeshtam in Xinjiang (bordering Kyrgyzstan); Manzhouli in Inner Mongolia (bordering Russia) and Suifenhe Port in Heilongjiang (also bordering Russia).
Saudi Arabia latest to sign up to UN TIR Convention
Saudi Arabia has become the 74th Contracting Party to the UN Transports Internationaux Routiers (TIR) Convention, the only global customs transit system. According to the United Nations Economic Commission for Europe (UNECE), joining the Convention facilitates trade and the seamless and secure movement of goods across borders. It points out that more than 30% of global trade crosses the Red Sea, making Saudi Arabia crucial for goods transit through the Middle East. Saudi Arabia’s accession is therefore an important milestone for improving road and multimodal transport in the region. Interest in the TIR Convention is growing in the Middle East within the last six months alone, Qatar and Palestine having acceded to the Convention, and the United Arab Emirates (UAE) having fully implemented the TIR system. Bahrain and Oman are expected to join soon.
Hosted by UNECE, the 1975 Convention covers the whole of Europe and is expanding into Asia and North Africa as well as the Middle East. Pakistan, China and India all acceded in the last three years. The TIR system requires customs and national authorities to provide minimal manpower and facilities — which is limited to checks on seals and the inspection of load compartments or containers — and reduces transit delays and congestion at border crossings. Accession to TIR, UNECE highlights, secures payment of customs duties and taxes by providing a robust guarantee mechanism, thus reducing trade transaction costs and facilitating higher growth of intra- and inter-regional trade.
How to comply with sanctions obligations
With sanctions very much in the news at the moment in the context of the Iran nuclear deal, the Office of Financial Sanctions Implementation (OFSI) has produced a timely factsheet offering information and advice in relation to arms embargoes, trade sanctions and financial sanctions. Having to comply with the various types of sanctions imposed by the UN, the EU, the UK and others can be difficult for both importers and exporters, OFSI agrees. To help affected businesses, the 11-page question-and-answer style guide (which can be found at assets.publishing.service.gov.uk) aims to answer questions relevant to those involved in importing and exporting goods and services, especially in areas where financial sanctions are in force.
In relation to licensing, the guide considers whether an OFSI licence is required if a business already has an export or trade control licence (the short answer is “you may do”), and what OFSI licensing grounds might apply to importers and exporters. Questions about financial sanctions along the export chain are also considered, including “Do financial sanctions apply to import and export agents?”. With agents such as couriers, express operators and freight forwarders being responsible for their own due diligence, the answer is again “yes”. Finally, financial sanctions breaches and penalties are covered and there is also a section on sources of further information.
New plans will keep Britain trading
When traffic is disrupted at the Channel ports, Operation Stack comes into play with lorries parked up along the M20 — a solution which has unfortunate consequences for residents driving in the area. New plans will allow traffic to travel in both directions between junctions 8 and 9 on the motorway while lorries are being queued for the Port of Dover and Eurotunnel. This will mean that drivers can access these junctions, rather than being diverted onto smaller local roads. The Department for Transport (DfT) is also intending to improve overnight lorry parking, so that fewer lorries will be left on local roads or parked in lay-bys overnight. All this is good news, the Freight Transport Association (FTA) has said, and will help to ensure that the logistics industry can continue to supply Britain’s businesses with the goods and services they need. Its Head of UK Policy, Christopher Snelling, pointed out that efficient logistics is vital to keep Britain trading, directly having an impact on more than seven million people employed in the making, selling and moving of goods. Highways England has launched a consultation into the options being considered with regard to Operation Stack. Available at highwaysengland.citizenspace.com, it is open for comments until 22 July 2018.
Third runway decision gets enthusiastic support
Boris Johnson may still be totally against the idea but the Government’s decision to finally give the go-ahead to a third runway at Heathrow Airport has received a unanimous thumbs up from the business community. Transport Secretary Chris Grayling said the decision was being taken in the national interest and would benefit the whole of the UK as there would be increased regional connectivity. Looking at the announcement in the context of Brexit, Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: “It will show international investors, our trading partners and our competitors that the UK is serious about being at the heart of the global economy.” With aviation capacity in the UK set to run out as early as 2025, the £14 billion runway could be completed by 2026.
Firms voting with their feet
The latest CBI/CBRE London Business Survey echoes a number of its predecessors with uncertainty over the UK’s future relationship with Europe remaining the top issue of concern (66% of respondents) for the sixth consecutive time. More than a quarter (27%) of firms said that they are planning to move part of their operations abroad, with 5% planning to move their entire operation overseas. Retaining access to the customs union and the single market is firms’ top priority (63%) in Brexit negotiations, followed by guaranteeing European citizens’ right to remain (53%), as they are seen as crucial to the capital’s workforce. The full survey results can be found at www.cbi.org.uk.
Standards will be key to post-Brexit trade success
In recent months many of the arguments over the future trading relationship with the EU have focused on whether or not the UK should remain in the customs union, or negotiate something similar to the current procedures. However, the British Chambers of Commerce (BCC) has warned that this debate should not be allowed to overshadow other crucial aspects of Brexit negotiations, including particularly the UK’s future approach to standards. According to its Director General, Dr Adam Marshall, these will have a major impact on the competitiveness and market access of UK products after the UK leaves the EU in 2019. The BCC argues that UK firms must be able to continue influencing the standards with which they must comply, otherwise the UK will become “a standards taker”.
Together with BSI and other organisations, the BCC has called on the Government to act swiftly to retain the UK’s place at the top table of European standards-setting bodies CEN and CENELEC, where this country has long played a leading role in setting voluntary industrial standards. Standards are one of a number of “behind the border” issues that businesses highlight as crucial in the Brexit negotiations, as their complexity can present greater costs to business than some tariffs or customs procedures.
Goodbye to EU red tape?
Do businesses really want to see an end to all EU red tape with a post-Brexit bonfire of European law? Not according to new analysis by the CBI which reveals the extent to which companies across 23 industry and service sectors would rather stay close to EU rules than diverge from them. In its report Smooth Operations: An A-Z of the EU Rules that Matter for the Economy, the employers’ group shows that 18 of the 23 sectors examined would prefer convergence or alignment for the majority of regulations that impact their businesses.
Although Brexit presents opportunities for rule changes in sectors such as agriculture, shipping and tourism, the report finds that those opportunities for divergence are vastly outweighed by the costs of deviating from rules necessary to ensure smooth access to the EU market. However, the CBI argues, where rules are fundamental to the trade or transport of goods — as in the automotive, chemicals and life sciences sectors — then remaining in lockstep with the EU is essential. On the basis of its analysis, the CBI wants three principles to guide UK and EU negotiators: where rules are fundamental to the trade or transport of goods, they must negotiate ongoing convergence; both sides should look to set a new international precedent in the trade of services and digital products; and alignment will need to include mechanisms for influence and enforcement that benefit both sides.
Free and frictionless trade vital for car exports
Although more than 147,000 cars rolled off UK production lines in March, this was down 13.3% on the same month in 2017 and exports also fell by 11.9%. Highlighting the importance of the automotive industry to Britain’s economy and jobs, the Society of Motor Manufacturers and Traders (SMMT) said that a double-digit decline in car manufacturing for both home and overseas markets was of considerable concern. Overall output in the first quarter (Q1) of 2018 fell by 6.3%, with 440,426 cars leaving production lines in total this year. Almost 80% of these were exported although demand from overseas customers fell by 4.0% in the quarter. SMMT Chief Executive Mike Hawes described free and frictionless trade as an absolute priority for the industry and pointed out that Britain’s vehicle and component manufacturers are important contributors to the UK economy being responsible for 13.0% of all the country’s export in goods.
UK must prepare to leave the customs union
A series of recommendations that it claims will benefit both the Brexit process and wider trade priorities have been set out by a leading think tank, the Institute of Economic Affairs (IEA). In a new report, it argues that the Government should be taking practical steps to reap the benefits of an independent post-Brexit trade policy. A number of the recommendations focus particularly on customs matters controlled by HM Revenue & Customs (HMRC). Among a number of short-term recommendations, the IEA calls for greater transparency in order to attract new exporters to international trade so that they are not deterred by perceived bureaucracy and uncertainty.
It is also important to build resource within HMRC in order to assist businesses that are not used to trading outside the customs union, the Institute argues. HMRC should focus, it insists, on providing IT support skills training for businesses and consider engaging external professional services to help in other areas. In the long term, the Border Force goods functions should be incorporated into HMRC’s remit, aspects of the Union Customs Code (UCC) should be reformed, and the UK should use the flexibility available in VAT when it is no longer an EU member. The report Under Control: What HMRC Can do to Prepare and Optimise Customs Processes for All Outcomes can be found here.
Food safety concerns over Brexit cake
An overwhelming majority of people want the UK’s current food safety standards retained, according to a new report. In what could be interpreted as a snub to a possible trade deal with the USA, 82% of 2000 UK adults polled want to keep the UK’s existing food standards, while just 8% think they should be lowered. Publishing the survey results, the Institute for Public Policy Research (IPPR) also revealed that people not only favour high standards over post-Brexit deregulation, but also explicitly favour alignment with EU standards in order to secure a far-reaching trade deal with the bloc. With strong opposition to food safety deregulation across the political spectrum, Brexit supporters are just as opposed to it as those who voted remain.
The findings have important implications for the UK’s options when negotiating post-Brexit trade deals, the IPPR points out, as any deal with the USA which included watering down food safety rules (on chlorinated chicken and hormone-treated beef, for example) would be unlikely to win public support. The IPPR briefing, Have Your Cake or Eat it? New Findings on Public Attitudes to Brexit (Part Two), can be found here.
Health and safety
The dangers of ordinary substances
Manufactured chemical products may potentially cause harm but they are at least labelled with risk and safety information. Potentially more dangerous are commonly available substances such as flour in bakeries or silica dust on construction sites which can be hazardous if their use is not managed effectively. This is the message, the European Agency for Safety and Health at Work (EU-OSHA) hopes to get across in its 2018–2019 EU-wide campaign, Healthy Workplaces Manage Dangerous Substances. There will be two years of events and activities aimed at drawing attention to the issue and promoting the best ways of tackling the risks that dangerous substances pose to workers across all industries.
The campaign (full details of which can be found at healthy-workplaces.eu) aims to promote techniques for the proper management of dangerous substances in the workplace, such as risk assessment, elimination and substitution, by disseminating practical tools and case studies. It also focuses on groups of workers who are at particular risk. As part of the campaign, an e-tool intended to help employers to effectively manage dangerous substances in the workplace is available at eguides.osha.europa.eu. Once they have completed the questionnaire, employers can print a report, My Chemical Guide, that includes their answers, a to-do checklist and recommendations for good practices and measures.
Where next for the Patent Agreement?
In 2013, the Member States of the EU agreed to create a Unified Patent Court (UPC) to enable a single judgment on patent disputes across all the countries that are party to the agreement. With Brexit looming, the British Government has just brought this new international court one step closer by ratifying the Unified Patent Court Agreement (UPCA). Confirming that the Government has ratified the agreement, the Minister for Intellectual Property, Sam Gyimah, said that ratification demonstrates that internationally, as well as at home, the UK is committed to strong intellectual property protections. Thirteen EU Member States (including France, Germany and the UK) must ratify the UPCA before it can come into force. The UK is the 16th country to do so; France ratified in March 2014, but Germany has not yet added its name to the list of signatories.
Despite Mr Gyimah reassuring innovative businesses that they will benefit significantly from the UPC (because they will not have to assert rights before the court system of each Member State), Brexit would appear to have put a rather large spanner in the UPC works. This takes the form of the Court of Justice of the European Union (CJEU) as, under the agreement establishing the UPC, it must respect and apply EU law and, in collaboration with the CJEU, ensure its correct application and uniform interpretation. Given the Government’s unease over any continuing relationship with the CJEU after Brexit, the UK’s relationship with the UPC will, in the words of the Intellectual Property Office, “be subject to negotiation with European partners as we leave the EU”.
Too many traders not ready for Brexit
Although over a third (36%) of traders rely on the just-in-time delivery of material and components, many are still not preparing for changes to customs procedures after Brexit. This is the headline finding of research by the British Chambers of Commerce (BCC) carried out in partnership with the Port of Dover. Over 830 businesses from across the UK that export or import responded to the survey which has revealed that delays at UK or EU ports would lead to considerable business disruption, particularly for those operating a just-in-time model. Around a third of the UK’s trade in goods crosses the English Channel in lorries via the Port of Dover and Eurotunnel, serving the just-in-time supply chain between the UK, Ireland and the rest of the EU. Crucially, the BCC said, with less than a year to go until Brexit, one in three (33%) businesses affected by the implementation of new customs procedures are still not planning for checks and declarations between the UK and EU.
Focus cannot purely be on non-EU markets…
Given that the EU is likely to remain the largest single market for British businesses for some time, the Government must adopt a twin-track approach to its trade agenda, rather than prioritising other markets over European ones. That message, from the Institute of Directors (IoD), comes as a new survey shows that the EU has seen stronger growth as a market for UK exporters than either Asia or North America over the past two years. The poll of almost 800 directors found that 43% saw most of their growth in the EU, with just 21% reporting their greatest growth in North America and (also 21%) in Asia. Although respondents told the IoD that they saw potential in both areas over the next five years, the EU remains the region with the highest expectations for growth.
Available at www.iod.com, the IoD’s report Going Global: Trends in Trade calls for the Government and businesses to work closely together in order to develop a truly “Global Britain” strategy. The Government should, the IoD argues, use the coming 18 months leading into the Brexit transition period to consult on and develop a comprehensive trade agenda for the medium term. Going global is as much about opportunities in Europe as it is further afield, the Institute’s Allie Renison explained, and that should be reflected in how the Government shapes post-Brexit Britain.
… as Germany and France remain key export targets
The USA, Germany and France are likely to remain the top three markets for UK services over the next decade, a new report has predicted. In its latest Trade Navigator report, HSBC confirms that the UK economy performed better in 2017 than many forecasters had expected, thanks to a strong contribution from exporters. British exporters have, HSBC says, found themselves in a “sweet spot” — enjoying the benefits of a weak pound and buoyant demand in the UK’s principal markets and not yet facing potential new Brexit-related trade barriers. Although Brexit continues to dominate the outlook for UK trade, the HSBC survey of some 6000 businesses across a broad range of industry sectors in 26 markets, found what it terms “largely positive” expectations for trade in the short term.
In terms of growth, HSBC forecasts that the strongest demand for services will be from India and China, with UK service exports to those countries projected to rise by about 10% per year. The next decade is expected to see UK service exports globally rise by 130%, the report estimates. Views about the UK’s post-Brexit future are mixed, with 38% of the UK companies polled expecting Brexit to have a negative impact, 28% thinking it will have no impact and 33% anticipating a positive impact. The latest HSBC Trade Navigator report for the UK can be accessed at www.business.hsbc.com.
Mexico latest to get an EU deal…
A new agreement on trade between the EU and Mexico will see duty-free status apply to nearly all trade in goods between the two. European Commission President Jean-Claude Juncker said that Mexico joins Canada, Japan and Singapore in the growing list of partners willing to work with the EU in defending open, fair and rules-based trade. Once finalised and approved, the agreement will benefit both companies and consumers across Europe, he said. Since an earlier EU-Mexico trade agreement came into force in 2000, trade between the two areas has risen at a rate of around 8% per year. However, despite an overall increase of 148% in trade in goods since then, the two sides have still identified opportunities for further improving their trade relationship.
Six main elements of the agreement are highlighted by the Commission, including the fact that EU agricultural exports are set to see the greatest benefit, with sales of poultry, cheese, chocolate, pasta and pork all anticipated to rise. The agreement includes a comprehensive trade and sustainable development chapter, and covers public procurement, with companies expected to benefit from mutual access to government contracts. It also seeks to establish a level playing field for the protection of intellectual property rights, with EU research and development being protected, and 340 distinctive European foods and drink products being given protection from imitation in Mexico. Trade in services (including those in the financial, transport, e-commerce and telecommunications sectors) will be opened up and the deal also provides for investment protection.
… as EU moves closer to Japan and Singapore
The EU is on the verge of completing its largest ever bilateral trade deal. An Economic Partnership Agreement (EPA) with Japan will, the European Commission said, remove the vast majority of customs duties that cost EU companies exporting to Japan €1 billion a year. It will also eliminate long-standing regulatory barriers. Japan’s market of 127 million consumers will be opened to key EU agricultural exports, while over 200 traditional European regional food and drink products will be protected in the Asian country. Export opportunities are also expected to increase in a range of other sectors, with EU companies being able to bid for public contracts in many Japanese cities. The economic partnership with Japan will cover an area with 600 million consumers and a third of global gross domestic product (GDP).
Meanwhile, the Commission announced, progress has also been made with negotiations on trade and investment agreements with Singapore. Bilateral trade in goods between the EU and Singapore was worth €53.3 billion in 2017, while in 2016 trade in services was valued at €44.4 billion. Over 10,000 EU companies are currently established in Singapore, many using it as a hub to serve the wider Pacific region. The Japan and Singapore agreements still have to be formally approved but it is anticipated that they will enter into force by the end of the Commission’s current mandate, which runs until October 2019.
EU acts to ban bullying in the food supply chain
After spending several years looking into the problem, the European Commission has decided that there are a lot of unequal relationships in the food supply industry and relying on self-regulation is doing little to stop the growth of unfair trade practices (UTPs). In a bid to ensure fairer treatment for smaller food and farming businesses, it is putting forward a Proposal for a Directive on Unfair Trading Practices in Business-to-business Relationships in the Food Supply Chain which can be found here. The Commission highlights that smaller operators in the food supply chain, including farmers, are vulnerable to UTPs employed by larger partners in the chain, such as major supermarkets. They often lack bargaining power and alternatives to get their products to consumers.
The UTPs to be banned are late payments for perishable food products, last minute order cancellations, unilateral or retroactive changes to contracts and forcing the supplier to pay for wasted products. Other practices will only be permitted if subject to a clear and unambiguous upfront agreement between the parties. These include a buyer returning unsold food products to a supplier; a buyer charging a supplier payment to secure or maintain a supply agreement on food products and a supplier paying for the promotion or the marketing of food products sold by the buyer.
Hauliers highlight Brexit concerns
There is an urgent need to confirm the terms and length of the Brexit transition/implementation period the Freight Transport Association (FTA) has insisted. Given that EU negotiators have repeatedly said that “nothing is agreed until everything is agreed”, the FTA is concerned that the political agreement reached at the end of March with the British Government on a transition/implementation phase until December 2020 might yet fail to materialise. That issue tops a list of eight points that the FTA wants the Government and the EU to address as a matter of urgency. Described by the Association as the bare minimum of measures that the logistics industry needs to ensure Britain keeps trading after Brexit, the list also includes: a frictionless trading arrangement during the transition/implementation period; continued access to the benefits of EU agreements during that time and no restriction on the numbers of vehicles able to cross UK-EU borders.
In detailing its concerns, the FTA aims to persuade politicians that the customs union is just one of a number of issues that needs to be addressed. The consequences of leaving the single market should also be considered, it argues, and solutions must be found that will minimise regulatory barriers, remove the need for conformity or food safety checks at borders, and protect transport connectivity after Brexit. The Association has warned that there is only a short time left to agree the measures it has identified.
So far, so good
By the end of March 2018, the two Brexit negotiating teams, led by David Davis and Michel Barnier, had announced agreement on large parts of a deal for the “orderly withdrawal” of the UK from the EU. Most importantly, from the point of view of UK business, they also confirmed agreement to the UK’s request for a transition period after the formal Brexit date in March next year. While this will not be the full two years that had been suggested by the UK Government it will run until 31 December 2020 (the end of the current seven-year EU financial period). Among the items drafted at last December’s meeting in Brussels that have now been built into the text of the leaving agreement, are the questions of citizens’ rights after Brexit and the settlement of the so-called Divorce Bill.
Brexit analysis tells a worrying tale
A leading Parliamentary Committee has decided to publish EU Exit Analysis: Cross Whitehall Briefing. Available at www.parliament.uk, the document is given in full with the exception of a single Annex highlighted by the Department for Exiting the European Union as being sensitive to the ongoing negotiations. The analysis suggests that there will be an adverse effect on the economy of the UK and all its regions, although the degree of impact will depend on the outcome achieved in the negotiations. The document suggests that even reaching a free trade agreement (FTA) with the EU would still cost the UK 4.8% of its expected economic growth over the next 15 years. However, David Davis has said that the analysis does not reflect government policy. “It is,” he said, “preliminary, draft modelling of off-the-shelf scenarios that do not reflect the deal that we are seeking to agree with the EU. Let me be clear, this is a work in progress and as such is not appropriate for assessing options.”
EU cartel police turn spotlight on sports media rights
Given that the European Commission’s anti-trust investigators usually only move when they have been given convincing evidence by one of the parties, and that a finding of illegal activity leads to fines in the hundreds of millions of euro range, the companies involved in sports broadcasting rights that have recently received an unexpected visit will be feeling worried. The reason why they might be casting worried looks at each other is because EU competition law includes a leniency clause that grants the first wrongdoer to break ranks, and give evidence, immunity from fines. The Commission also points out that these “dawn raids” do not mean that the companies are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation. In recent years, it has been very unusual for raids not to lead to a finding that a number of companies have been artificially fixing prices or indulging in other anti-competitive behaviour.
The Commission always refuses to name names at this early stage, only confirming that offices in several Member States have been raided. However, one of those under investigation has already confirmed a visit to its London office by the Commission: Fox Networks Group (FNG), an operating unit of Rupert Murdoch’s 21st Century Fox. The EU officials left with documents and computers as Fox said that FNG was co-operating fully with the inspection.
EU highlights problems with China
China will not be happy to have been placed at the top of two recent lists produced by the European Commission, given that one relates to dangerous products coming into the EU and the other concerns counterfeiting and piracy. The Commission’s 2017 report on the Rapid Alert System for Dangerous Products shows that the majority of dangerous products notified by Member States came from outside the EU with China being the number one country of origin. Available at ec.europa.eu, the report notes that toys were the products most frequently mentioned with last year’s playground craze — fidget spinners — making the list because the small batteries that allow the toy to light up could easily be swallowed by children.
Turning to intellectual property, another Commission report (which can be found here) notes that “China continues to be the top priority for the EU because of persistent and longstanding problems”. Based on studies from the Organisation for Economic Co-operation and Development (OECD) and the European Union Intellectual Property Office (EUIPO), China remains the origin of most counterfeit and pirated goods arriving in the Union. More than 80% of the seizures of counterfeit and pirated goods come from China or Hong Kong. India also remains a big concern for the Commission, in particular due to the lack of suitable protection for pharmaceutical products and also because India is one of the biggest producers of counterfeit pharmaceuticals.
Northern Ireland border a problem in waiting
The progress in the Brexit talks reported above hides one major problem: the UK has agreed to accept the Commission’s idea of a fallback solution if it proves impossible to avoid a “hard border”. However, this seems to imply keeping Northern Ireland in some form of Customs Union with the EU and earlier this year Theresa May said that no UK Prime Minister could accept such a deal. She may be prepared to compromise on that position but it is highly unlikely that the Democratic Unionist Party (DUP) — currently providing her with a majority in the Commons — would ever do so. Brexit Secretary David Davis said, “it remains our intention to achieve a partnership that is so close as to not require specific measures in relation to Northern Ireland”.
Where in the world?
The Government’s other great hope with regard to the border between Northern Ireland and the Republic is that a technical solution will be found that will enable almost all the formalities to be carried out online. However, the Chairman of the Northern Ireland Affairs Committee, Dr Andrew Murrison, has warned that his committee has found no evidence to suggest that there is currently a technical solution that would avoid infrastructure at the border. Available at publications.parliament.uk, his report points out that the committee has been unable to identify any border solution currently in operation anywhere in the world that would enable physical infrastructure to be avoided when rules and tariffs diverge.
Overall, the committee concluded that the Government’s proposals are imaginative, but that it will not have the time to implement a new non-visible customs regime before the deadline. Brexit-supporting Dr Murrison said it is clear that regulatory and tariff alignment will be required during any transition period to avoid a hardening of the border before a definitive low-friction solution can be determined.
August launch for Customs Declaration Service
A phased launch of the Customs Declaration Service (CDS) will start in August this year. The new system will, HM Revenue & Customs (HMRC) has announced, be phased in between then and early 2019. The CDS will replace the existing Customs Handling of Import and Export Freight (CHIEF) system. From early 2019, businesses exporting goods to countries outside the EU or importing them from those countries will need to make all declarations using the CDS. During the transitional phase between August 2018 and early 2019, CHIEF will continue to run alongside the new system. CDS will be accessed via the GOV.UK portal, using a Government Gateway account. Traders using customs declaration software will, HMRC has confirmed, need to follow instructions and documentation provided by the package supplier.
HMRC also points out that companies will be required to provide some additional information for declarations in order to align with the World Customs Organization (WCO) Kyoto Convention, currently being implemented in the UK through the Union Customs Code (UCC). That information will include an audit trail of previous documents and additional party types, such as the buyer and seller. In order to align UK customs data with international standards, there will also be a number of other changes, including the location of goods identification and the warehouse type code list. Businesses wishing to keep informed about developments with CDS are invited to register with the HMRC Business Help and Education email service at public.govdelivery.com. CDS updates will be available under the “trading with other countries” heading.
UK and Commission at odds over customs duties
More signs of tension between the UK Government and the European Commission with a demand from Brussels that the UK should pay an extra €2.7 billion. This is nothing to do with the so-called Divorce Bill but has resulted from a dispute over customs duties going back several years. The Commission has sent a letter of formal notice to the UK because, it argues, the Government refuses to make customs duties available to the EU budget, as required by EU law. A 2017 report by the EU fraud office found that importers in the UK had evaded a large amount of customs duties by using fictitious and false invoices and incorrect customs value declarations at importation.
Further Commission inspections brought to light a dramatic increase of the scale of that undervaluation fraud scheme operating through the hub in the UK between 2011 and 2017. “Despite having been informed of the risks of fraud relating to the importation of textiles and footwear originating in China since 2007, and despite having been asked to take appropriate risk control measures, the United Kingdom failed to take action to prevent the fraud,” the Commission claimed. It calculates that the infringement of EU legislation resulted in losses to the EU budget amounting to €2.7 billion (minus collection costs) during the period November 2011 until December 2017. In addition, the Commission argues, the UK infringed EU VAT legislation, leading to potential losses to the EU budget. If the Commission is unhappy with the UK’s response, it may refer the case to the Court of Justice of the European Union (CJEU) for a decision.
Freedom of movement
Protecting free movement of workers
Commission President Jean-Claude Juncker said last year that it seemed absurd to have a banking authority to police banking standards, but no common authority for the EU single market. In his 2017 State of the Union address, in December, Mr Juncker went further and announced plans for a European Labour Authority (ELA) that would, he argued, ensure that EU rules on labour mobility are enforced in a fair, simple and effective way. The full details have now been spelled out in a draft EU regulation which can be found at eur-lex.europa.eu.
This notes that 17 million Europeans live or work in a Member State other than that of their nationality and that this figure has almost doubled in the last 10 years. The Commission argues that individuals and businesses need access to reliable information and practical services to facilitate labour mobility, including information on opportunities, rules and their rights and obligations in cross-border situations. The ELA will, it argues, contribute to fostering fairness and mutual trust in the internal market by ensuring that EU rules are enforced in a fair, simple and effective way. The Authority will support operational co-operation between national authorities in the cross-border enforcement of relevant law, including facilitating joint inspections. Following the completion of the EU legislative process, the new body should be up and running in 2019 and become fully operational by 2023. A Commission fact sheet on its aims and duties can be found at europa.eu.
Health and safety
Protecting workers against cancer-causing chemicals
The European Commission has published a proposal to amend Directive 2004/37/EC on the protection of workers from the risks related to exposure to carcinogens or mutagens at work (the Carcinogens and Mutagens Directive). The aim is to limit workers’ exposure to five cancer-causing chemicals, in addition to the 21 substances that have already been limited or proposed to be limited. Estimates show that the proposal would improve working conditions for over one million EU workers and prevent over 22,000 cases of work-related illness.
The five carcinogens selected as having high relevance for the protection of workers are: cadmium and its inorganic compounds; beryllium and inorganic beryllium compounds; arsenic acid and its salts, as well as inorganic arsenic compounds; formaldehyde and 4,4’-Methylene-bis(2-chloroaniline) (MOCA). Once this proposal is adopted (probably in early 2019), EU Member States will be given two years to bring its provisions into national law. The full text can be found at eur-lex.europa.eu.
Problems for port workers opening fumigated containers
A new study by the European Agency for Safety and Health at Work (EU-OSHA) has reviewed the risks to workers when opening fumigated shipping containers. The study identifies significant gaps in preventive measures and makes recommendations that should be implemented to improve the safety and health of such workers. Each year, more than 600 million freight containers are shipped worldwide. These containers are frequently treated with pesticides to prevent damage to the goods. Agents used for this purpose have known toxic or irritant properties and can have long-term effects on the cardiovascular and central nervous systems, for instance phosphine (PH3), methyl bromide (MeBr) and formaldehyde. Workers at ports who open these containers, for example during customs inspections, can be exposed to these harmful agents. The report (which can be found at osha.europa.eu) indicates that this problem has been underestimated for some time.
The nearer Brexit approaches, the more previously unconsidered problems begin to make their presence felt. The latest issue concerns Top-Level Domains (TLDs) — the bits at the end of emails and website addresses including .UK, .com and .EU. The last of these has been available since 2004 but, the Commission has warned, there will be a change once the UK leaves the Union. The .EU TLD has been available to anyone living in the EU and to any business with its headquarters or main base in one of the Member States. Hundreds of thousands of firms in the UK have taken advantage of having a “European online identity”. However, in a notice available at ec.europa.eu, the Commission makes clear that the TLD will be subject to the legal repercussions which need to be considered when the UK becomes a third (non-EU) country. The Commission makes clear in its notice that the Registry for .EU will be entitled to revoke such domain name on its own initiative and without submitting the dispute to any extrajudicial settlement of conflicts. The notice references the applicable legislation and gives links to websites further explaining the rules concerning the .EU TLD.
One year to Brexit and trade is rising
With just under 12 months to go until the UK’s departure from the EU on 29 March 2019, new trade figures have revealed exports of UK goods and services at a record high. According to the Office for National Statistics (ONS), UK goods and services exports increased in 2017 faster than imports — up 12.1% and 9.3% respectively. As a result the trade deficit narrowed significantly by £12.1 billion to £28.6 billion from £40.7 billion. Overall, UK exports of goods and services have increased by 12.1% to £622.1 billion. According to International Trade Secretary Liam Fox non-EU countries continue to be the main destination for services exports (£171.4 billion), making up 61.3% of all exports in this sector. He also highlighted work done by the Department for International Trade (DIT) as it has now set up 14 working groups across 21 countries to strike trade deals and strengthen commercial ties with key trading partners.
Don’t just prioritise non-EU markets
Given that the EU is likely to remain the largest single market for British businesses for some time, the Government must adopt a twin-track approach to its trade agenda, rather than prioritising other markets over European ones. That message, from the Institute of Directors (IoD), comes as a new survey shows that the EU has seen stronger growth as a market for UK exporters than either Asia or North America over the past two years. The poll of almost 800 directors found that 43% saw most of their growth in the EU, with just 21% reporting their greatest growth in North America and (also 21%) in Asia. Although respondents told the IoD that they saw potential in both areas over the next five years, the EU remains the region with the highest expectations for growth.
Available at www.iod.com, the IoD’s report Going Global: Trends in Trade calls for the Government and businesses to work closely together in order to develop a truly “Global Britain” strategy. The Government should, the IoD argues, use the coming 18 months leading into the Brexit transition period to consult on and develop a comprehensive trade agenda for the medium term. It warned against “politicising” trade by turning against the EU to make a point about Brexit.
What would be the impact of reducing tariffs post-Brexit?
There would be some reductions in consumer prices, but nothing to get too excited about according to new research by the Institute for Fiscal Studies (IFS). In The Customs Union, Tariff Reductions and Consumer Prices, the IFS estimates the scale of the gains that consumers might expect if the UK were to leave the Customs Union and reduce its tariffs. Its analysis shows that this would have only a limited impact on the cost of living of the average household because the average tariff rates that the EU charges on the sorts of goods consumed in the UK are not particularly high. The IFS points out that the average tariff under the World Trade Organization (WTO) most-favoured-nation (MFN) status that would apply to UK imports from countries with which the EU has no trade agreements is 4.6%. Once the EU’s various trade agreements which waive or reduce tariffs on imports from certain countries are taken into account, the average is 2.8%. With services dominating the UK economy, just £26 of every £100 spent by UK households is affected, directly or indirectly, by the import prices of goods on which tariffs are charged.
“Simple arithmetic suggests therefore that even cutting all tariffs to zero could only reduce prices overall by 1.2% at most,” report author Peter Levell concludes. Crucially, any benefits that might accrue to consumers from running an independent tariff policy also need to be set against the inevitable costs to UK trade that would result from leaving the Customs Union, the report warns. Businesses will probably be affected by customs delays and storage costs that would result from the erection of customs barriers on trade with the EU, while regulatory differences between the EU and the UK are also likely to create various non-tariff barriers to trade. Such changes are likely to increase costs for consumers and offset the (already rather limited) gains from tariff reductions, the IFS argues.
EU acts to ban unfair trade practices
The European Commission has put forward a directive to tackle the most damaging unfair trade practices (UTPs) in an attempt to ensure fairer treatment for small and medium-sized food and farming businesses. These smaller operators in the food supply chain, including farmers, are vulnerable to UTPs employed by partners in the chain such as large supermarket chains. They often lack bargaining power and alternative routes to get their products to consumers. The practices to be banned include late payments for perishable food products, last-minute order cancellations, unilateral or retroactive changes to contracts and forcing the supplier to pay for wasted products. The Proposal for a Directive on Unfair Trading Practices in Business-to-business Relationships in the Food Supply Chain can be found here.
A dose of Brexit realism
In her third major speech addressing the UK’s decision to leave the EU, Prime Minister Theresa May recently warned both her own hard-line Brexiteers and the European Commission that “you can’t always get what you want”. She dismissed the idea of using existing models for economic partnership. “We will not accept the rights of Canada and the obligations of Norway,” Mrs May insisted. She also diluted one of her previous red line issues by admitting that “the decisions of the ECJ will continue to affect us” even after the UK has escaped the jurisdiction of the EU’s Court of Justice. Dismissing the often-repeated accusation that the UK is trying to cherry-pick its way to a better deal outside the EU than it had as a member, Mrs May pointed out that every Free Trade Agreement (FTA) has varying market access. “If this is cherry-picking,” she said, “then every trade arrangement is cherry-picking.” Her speech, available at www.gov.uk, moved away from the broad declarations of her earlier efforts to provide at least some detail in areas such as future trade in goods and services, continued membership of EU agencies and what will happen with regard to agrifood and fisheries.
The UK should agree to establish a customs union with the EU for all industrial goods and processed agricultural products, the Institute of Directors (IoD) has suggested. In a new report, it argues that such a partial customs union would significantly reduce barriers to trade with the EU while simultaneously allowing the UK to pursue trade deals with other countries. According to the IoD, such a deal would mean that British manufacturers could avoid provisions on rules of origin that could otherwise render a tariff-free deal meaningless for many companies, and also allow the UK to maintain full control over agricultural tariffs, which it could either reduce unilaterally or through negotiated trade agreements with third (non-EU) countries. A further benefit would be the UK’s ability to maintain a broadly distinct trade remedies policy from the EU, so that it would not be expected to automatically apply all EU anti-dumping or safeguard measures. Customising Brexit: A Hybrid Option for a UK-EU Trade Framework is available at www.iod.com.
Food industry has Brexit concerns
A leading Parliamentary Committee has warned that plans for physical and IT infrastructure must be drawn up now if British farming is to continue trading after the UK leaves the EU single market. The Environment, Food and Rural Affairs Committee has called for a fund to prepare British farming for Brexit and has warned that reverting to World Trade Organization (WTO) tariffs could possibly lead to higher costs for consumers. In Brexit: Trade in Food, available at publications.parliament.uk, it argues that while a liberalisation of barriers could possibly lead to cheaper imports, these may well be produced to lower welfare standards and the result could damage British producers. Committee Chairman Neil Parish highlighted that 60% of the UK’s agricultural exports and 70% of its imports are from the EU.
The committee has called on the Government to set out how it will make sure that IT systems and infrastructure are in place for the import and export of agricultural produce so that businesses can continue to trade smoothly with Europe and the rest of the world. It should also make clear how it will deal with potential regulatory divergence from the EU and ensure that protected geographical indicators (PGIs) are retained in a similar form after the UK leaves the EU. PGIs recognise products whose quality or reputation is linked to the place or region where it is produced. In the UK, the status has been awarded to products including Yorkshire Wensleydale cheese, Herefordshire cider and Welsh lamb. Despite Brexit, UK organisations are still seeking this protected status with the latest application being for Scottish wild venison.
AEO status after Brexit
The advent of Brexit in March 2019 could see 180,000 UK businesses needing to make customs declarations for the first time. Of those, some 20,000–30,000 might need to register for Authorised Economic Operator Security and safety (AEO(S)) status, in order to get their shipments fast-tracked through the customs process. “If your firm is one of those, then you really ought to be getting your skates on,” KPMG’s Head of Customs, Bob Jones, has advised. Firms should now be considering applying for AEO in order to have HM Revenue & Customs (HMRC) process and approve before March 2019, or certainly by the end of any transition period, he said.
AEO(S) status indicates that a company’s role in the international supply chain is secure, and that its customs controls and procedures are efficient and compliant. In addition to generally ensuring the right to fast-track shipments through the customs process at ports, it also reduces financial security requirements and provides full access to customs special procedures and privileges. To date, barely 600 traders have been awarded AEO or “trusted trader” status by HMRC, of which the vast majority (80%) are forwarders or logistics providers. Given that the AEO application process involves some 270 questions covering complex legal, HR, IT and financial issues, it can take some companies six months to prepare the paperwork.
As the UK Government’s preferred answer to the problem of avoiding a hard border between Northern Ireland and the Republic seems to rest on some form of trusted trade arrangement, anyone working in that part of the world might need to pay special attention to this warning.
Post-Brexit checks and controls inevitable EU warns
The other 27 Member States have been invited to agree their approach to a new partnership with the UK after it leaves the Union. Although the resulting six-page document restates the EU’s determination to have the closest possible partnership with the UK in the future, and agrees that such a partnership should cover trade and economic co-operation, it warns that being outside the customs union and the single market will inevitably lead to frictions. “Divergence in external tariffs and internal rules as well as absence of common institutions and a shared legal system, necessitates checks and controls to uphold the integrity of the EU single market as well as of the UK market,” the European Council document states. “This unfortunately will have negative economic consequences.”
The proposal for a free trade agreement (FTA) providing zero-tariff trade in goods and covering services will be welcomed in Whitehall but linking this to continued access to UK fishing waters for EU vessels will cause problems with Leave voters and politicians. Available at g8fip1kplyr33r3krz5b97d1-wpengine.netdna-ssl.com, the draft guidelines have been released ahead of a meeting of European Council leaders on 22 and 23 March, where they will be asked to agree to a 21-month transitional arrangement after the UK formally leaves the EU in March 2019. The document includes the now familiar warning about the single market being a set menu. It says: “The European Council recalls that the four freedoms of the Single Market are indivisible and that there can be no ‘cherry picking’ through participation based on a sector-by-sector approach that would undermine the integrity and proper functioning of the Single Market.” It also insists that the role of the EU’s Court of Justice (CJEU) will be fully respected.
Warning of possible disruption at UK and EU ports
The British Ports Association (BPA) has added its concerns to the debate about what will happen to EU-UK trade routes after Brexit. Without agreements between the UK and the EU on cross-border environmental health standards, it has suggested, there could be major hold-ups at ports resulting in serious disruption for food supply chains. BPA Chief Executive Richard Ballantyne said: “Perhaps one of the biggest Brexit challenges ports could face is accommodating new environmental health standards inspections at the border.” Under present rules, animal and plant products entering the UK and the EU from a third country can require documentary, identity or physical inspections.
These port health checks are conducted at specially designated and designed Border Inspection Posts (BIPs), carried out by qualified veterinary officers, employed by local authorities. As a result of the UK’s membership of the EU, in recent years food and agricultural products have not been subject to port health controls. However, after Brexit, under the present rules, costly BIPs would need to be installed at a range of UK ports, the BPA has highlighted. It points out that problems would be particularly severe at roll-on roll-off ferry terminals, through which much of the UK’s trade with the EU is carried by lorries which might have to stop and undergo time-consuming inspections if the correct agreements are not put in place.
Business support for Labour’s customs union plan
For the CBI, Jeremy Corbyn’s vision of a comprehensive customs union is a “real world solution” that would be welcomed by thousands of trading businesses of all sizes and sectors across the UK. Answering the point that such a deal would block UK expansion into non-EU markets, CBI Director-General Carolyn Fairbairn said: “Growing trade is not an ‘either or’ question — Germany already exports five times as much with China as the UK from within the customs union.” The manufacturers’ organisation, EEF, was also impressed with the Labour leader’s call for the UK to stay in a customs union with the EU, agreeing that the much sought after free and frictionless trade could only be achieved by comparable customs rules to those that the UK currently enjoys. However, CEO Stephen Phipson pointed out, it remains unclear how Labour could practically maintain its aim of a close relationship with the single market and EU agencies while also having a say in future trade deals.
Get ready for the big data shake-up
Small firms who are still not sure what General Data Protection Regulation (GDPR) means are not alone but they really need to start paying attention, the Federation of Small Businesses (FSB) has warned, because the GDPR will apply from 25 May 2018. The FSB has found that a third of small businesses have not started preparing for the introduction of the GDPR while a further third are only in the early stages of preparations. Only 8% of small businesses have completed their preparations. On average, small firms will spend seven hours per month meeting their data protection obligations which equates to £1075 per year, the FSB has calculated.
The direct cost of complying comes in at £508 per year. These costs will continue to grow with GDPR and further data protection regulation, such as ePrivacy, coming into force. Ahead of the regulation coming into force, data holders will have to ensure that they have safeguards in place to prevent the accidental loss, destruction or damage of data or unauthorised access. They should also review how they seek, record and manage consent to personal data being held by their organisation. Recognising that some small businesses will not be compliant ahead of the May deadline, the FSB has appealed to the regulator, the Information Commissioner’s Office (ICO), to take a proportionate approach to enforcement and not immediately to resort to fines.
Staying close to EU rules
During and after the EU referendum debate, if there was one piece of legislation that came to symbolise everything that Leave supporters detested about the European Commission and its fondness for red tape, it was the Working Time Directive. It is surprising, therefore, that a detailed piece of research by think tank Institute for Public Policy Research (IPPR) has found that there is minimal support for removing its provisions among the British public. Only 14% said that they would want to either loosen or remove the current Working Time Directive rules. Similarly, just 12% favoured loosening or removing completely the equality provided by another Brexiteer bugbear, the Temporary Agency Work Directive.
Leaving the EU, Not the European Model? New Findings on Public Attitudes to Brexit (Part One) can be found at www.ippr.org. As the title suggests, it is one of two briefings through which the IPPR will explore the public’s attitudes to EU rules. The question posed in this first part of the exercise is whether the UK should continue to align with standards that originate from EU law or should opt to diverge from this legislation and move away from Europe’s economic and social model. The IPPR found, among both Remain and Leave voters, a strong degree of support for EU-derived standards to be maintained, and even in some cases strengthened. Responding to the findings, TUC General Secretary Frances O’Grady said: “Brits don’t want a Brexit that undermines paid holidays, rest breaks and fair working hours.” The second part of the IPPR research will be published later in the year.
Pleas for a UK-wide post-Brexit immigration system
If they could shape the UK’s post-Brexit immigration system, employers would opt for a national approach to tackling skills and labour shortages, rather than a sectoral or regional one. According to the CIPD, 41% of more than 2000 employers polled would prefer a UK-wide immigration system based on national labour or skill shortages if migration restrictions are introduced post-Brexit. That compares to just 13% who would prefer a sector-based policy and 5% opting for a regional system. The findings are revealed in the CIPD’s latest quarterly Labour Market Outlook, which also shows that firms currently employing EU workers are more likely to invest in training than employers that do not employ nationals from other Member States.
EU nationals are hired not because employers are trying to cut costs or failing to invest in UK-born workers, they told the CIPD, but because those companies believe in investing in skills and talent to find the workers they need. Available at www.cipd.co.uk, the survey specifically asked employers how they would respond to future migration restrictions on EU workers. More than a quarter (27%) said they would continue to recruit EU nationals where possible (including 30% of public sector organisations). The CIPD has concluded that a post-Brexit immigration system based on a national skills or labour shortage occupation list would be the most straightforward to implement.
Moves will help EU workers stay in the UK
Two recent initiatives aim to help EU citizens remain in the UK after Brexit. The first is the Government’s announcement that EU nationals arriving in the UK post-Brexit are guaranteed the opportunity to secure permanent residency status. Under the Government’s latest proposals (which must still be agreed with the EU), once the UK leaves the Union on 29 March 2019 there will be an implementation period of about two years. EU nationals and their family members arriving during that period will have to register with the authorities if they want to stay in the UK for longer than three months. Those doing so will be allowed to stay for five years and to qualify to apply for indefinite leave to remain providing they are “working, studying or being self-sufficient”.
In a further development, the Mayor of London, Sadiq Khan, announced his intention to help make it easier for EU citizens who live in the capital to access the information they need about staying in the UK after Brexit. The million or so EU citizens living in London need access to accurate and up-to-date information and advice about their rights, Mr Khan argued. To make the process as straightforward as possible, he is to launch a website offering information about European citizens’ rights post-Brexit, with details of how to access expert legal advice, support services and guidance on employment rights.
Immigration system unprepared for Brexit
The Home Affairs Committee has criticised delays to the Immigration White Paper and warned of serious problems for immigration service delivery and border security. In a report available at publications.parliament.uk, it argues that lack of clarity over the Government’s intentions on immigration are creating anxiety for EU citizens in the UK and uncertainty for UK businesses, as well as preventing proper planning and putting already overstretched immigration officials in an impossible position. The Committee Chairwoman, Yvette Cooper, said that the lack of detail with just over a year to go is irresponsible.
Her comments were echoed by Federation of Small Businesses (FSB) Chairman, Mike Cherry, who pointed out that one in five small firms that employ staff has an EU worker on its books. Few, if any, small business owners have experience of using the points-based immigration system, he continued, so the Government must avoid a situation where they are expected to double up as immigration officers. “As things stand,” Mr Cherry concluded, “small firms are facing a new set of rules during the transition period and a new set of rules again once we get to 2021. Those switchovers need to cause minimal disruption to small firms.”
Trade can be risky
The latest Corruption Perceptions Index ranks 180 countries according to their level of public sector corruption. New Zealand, Denmark and Finland take the top three places as the world’s least corrupt countries, while Syria, South Sudan and Somalia are bottom of the list. Published by Transparency International, the Index places the UK at No. 8 on the list — up from 10th place last year. Based on surveys of business people and on expert assessments, the Index highlights links between corruption, press freedom and the decline of civil liberties around the world. The least corrupt region is Western Europe, with the two worst being Sub-Saharan Africa and Eastern Europe and Central Asia.
The Index uses a scale of 0 to 100, where 0 is highly corrupt and 100 is very clean. Over two-thirds of countries in this year’s list have a score below 50, with the average being 43. Chart-topping New Zealand scored 89, with the UK on 82, the USA on 75, Russia on 29 and Somalia on nine points. Over the last six years, many countries have made little or no progress in tackling corruption, with the positions in some — including Bahrain, Liberia and St Lucia — actually worsening. The full results can be seen at www.transparency.org.
Warning that trade is heading down a dangerous road
Speaking at a meeting of the whole World Trade Organization (WTO) membership, Director-General Roberto Azevêdo warned of a much higher and real risk of triggering an escalation of trade barriers across the globe. He was responding to a series of announcements from WTO members in recent weeks (including from the USA and the EU) which suggested that a range of new, unilateral trade barriers could soon be put into force. Calling on all parties to reflect on this situation very carefully, Mr Azevêdo said: “Once we start down this path, it will be very difficult to reverse direction. An eye for an eye will leave us all blind and the world in deep recession.”
Meanwhile, President Trump’s top economic advisor Gary Cohn has resigned, apparently in a dispute over the President’s determination to impose tariffs on aluminium and steel imports. The European Commission is also reported to be considering a 25% import tax on American products (including Levi’s jeans, Harley-Davidson motorbikes and Bourbon whiskey) in retaliation. It is also reminded the Government that EU members must act together in such circumstances and that the UK should not try to negotiate a separate deal with the USA.
The future of trade with the EU
“I want the broadest and deepest possible partnership,” Prime Minister Theresa May has told the EU, “covering more sectors and co-operating more fully than any Free Trade Agreement (FTA) anywhere in the world today.” In her latest Brexit speech, Mrs May has given more detail about how she sees the road ahead and tried to address previous criticism that the UK was intent on cherry-picking only the parts of EU trade law which best suit its purposes. “The EU’s agreement with Ukraine sees it align with the EU in some areas but not others,” she pointed out. “The EU’s agreement with South Korea contains provisions to recognise each others’ approvals for new car models, whereas their agreement with Canada does not.”
Equally, Mrs May went on, the EU’s agreement with Canada contains provisions to recognise each others’ testing on machinery; its agreement with South Korea does not. Reiterating her former insistence that trade at the UK-EU border should be as frictionless as possible, she said that it was vital that products only need to undergo one series of approvals, in one country, to show that they meet the required regulatory standards. Available at www.gov.uk, the speech accepts that UK businesses who export to the EU have made a case to the Government that it is strongly in their interest to have a single set of regulatory standards that means they can sell into the UK and EU markets. No-one will get everything they want, Mrs May concluded, but the UK will not be buffeted by the demands to talk tough or “threaten a walk out”.
Cargo capacity crisis threatens post-Brexit dream
A lack of capacity on key long-haul routes from Heathrow could threaten the Government’s post-Brexit trade plans. According to Heathrow Airport Limited, routes to Shanghai, Delhi, Mumbai, Los Angeles, Tokyo Haneda and Dubai are virtually full and cannot accommodate any further growth in trade. The new data is being used to promote the case for expanding the airport. Without that expansion, Heathrow argues, the aspirations of British exporters are at risk of being blocked by limited cargo space. Access to global markets through Heathrow is particularly important for high-value goods and SME exporters, the airport points out, and with a third of the UK’s non-EU exports already going through the facility it is absolutely critical for additional runway capacity to be made available.
Expanding Heathrow will double the airport’s cargo capacity and support up to 40 new long-haul trading links, helping to ensure that British exporters can reach new customers in fast-growing markets around the world. Between them, the six routes highlighted account for nearly 18% of Heathrow’s total cargo volume. Last year, that amounted to 1.7 million tonnes, with the value of goods handled put at more than £106 billion.
Ministers move to ease business Brexit worries
Leading employers’ groups and people running some of the UK’s largest companies have left the Government in little doubt that they are growing increasingly frustrated with the lack of direction over the country’s future relationship with the EU. The CBI, for example, has called for full customs union with the EU and single market participation, even if it means abandoning the Brexiteers’ main hope of pursuing separate trade deals with the rest of the world. It spoke up after finding that more than 60% of companies had either implemented contingency plans to cope with the risk of Britain’s leaving the EU without an agreement or intended to do so.
In an attempt to prevent these businesses from moving even further with their contingency planning, Chancellor Philip Hammond, Brexit Secretary David Davis and Business Secretary Greg Clark wrote an open letter to their bosses promising that existing rules and regulations would still apply during the UK’s Brexit transition period. Available at www.gov.uk, the letter promises that, under the Government’s plans for a transition period after Brexit, their access to EU markets would continue on current terms from March 2019 for around two years. In addition, the UK will remain covered by international agreements, including free trade agreements (FTAs), to which it is currently a party by virtue of its EU membership. For those employers worried about losing access to foreign labour, the letter confirms that EU citizens will still be able to come to live and work in the UK, with no new barriers to taking up employment.
Transition period not a given
As the Brexit negotiations moved back into the spotlight in early February, the EU’s Chief Negotiator, Michel Barnier, returned to Brussels after meetings with his opposite number David Davis in London and told a press conference that substantial disagreements remained with regard to the proposed transition period. It had earlier seemed that both sides were happy to be moving towards setting up such a deal ahead of the EU Council meeting in March. This had been expected to ratify a two-year period after Brexit when the UK would continue to operate within EU rules in order to give business (and the customs authorities) more time to prepare for the final departure from the Union.
However, Mr Barnier has pointed to continuing arguments over the free movement of people during the transition period, which the UK wants to restrict and which the EU believes should apply fully. On the application of EU rules during the transition, he noted, the UK has requested a right of opposition in the case where it disagrees with a new rule or law which could enter into force during this transition period. This would put the UK into a different category to the countries in the European Economic Area (EEA) — Iceland, Liechtenstein and Norway — which have no right to amend or contest the single market laws by which they are bound. With the EU having also published plans to take action against the UK for any breaches of its rules during the transition period (if and when it is agreed), the year has not begun on a harmonious note as far as the Brexit talks are concerned.
DIT doing its bit for Brexit
The National Audit Office (NAO) has published a briefing on how the Department for International Trade (DIT) is preparing for Brexit and the steps it is taking to establish the best framework for the UK to maximise trade and investment once it leaves the EU. The NAO notes that the DIT is accountable for eight of the post-Brexit “work streams” with some complex challenges. These include new legislation and scenario-based planning, namely preparing for and determining changes to the EU trade agreements to ensure they continue to function after the UK leaves the EU. As a result the Department, which was only established in 2016, had taken on 3745 staff by October 2017 and now operates in more than 100 overseas countries.
Implementing the UK’s Exit from the European Union: The Department for International Trade can be found at www.nao.org.uk. It states that: “DIT’s legislative programme includes trade issues covered in the EU Withdrawal Bill, the Sanctions Bill, the Trade Bill and the Taxation (Cross Border Trade) Bill, all of which have been introduced in Parliament.” DIT has, the NAO highlights, developed critical paths for seven of its eight Brexit work streams, with the eighth expected to be developed in January 2018. The plans prepare for two possible EU Exit scenarios — a negotiated outcome with transition period and a “no deal” outcome.
Why the UK should say no to Canada-style deal
It would be fair to say that the TUC and CBI do not always see eye to eye on future policy but in one regard they are in agreement, if having different reasons for rejecting a Canada-style Brexit deal. Director-General of the employers’ group, Carolyn Fairbairn, has reviewed the state of negotiations towards the UK leaving the EU and argues that neither the Canada nor Norway models represent the best solution for business or for Britain. Suggesting that the Canada model is, in fact, “an ocean away from what we need”, she has called for a comprehensive customs union between the UK and the EU. This would be a “practical, real-world answer”, she explained, that goes a long way towards solving some of the complex issues, including the Irish border question, raised by the UK’s exit from the EU.
Blaming too much ideology and too little urgency, Ms Fairbairn said that the UK team seems unable to agree with itself, let alone with the EU. She therefore urges negotiators to adopt a simple principle: “Start with the rules we already share, and move on from there. They have been 40 years in the making and support millions of jobs and communities across the UK and Europe.” Her views on the UK accepting a deal similar to that agreed between the EU and Canada are echoed by TUC General Secretary Frances O’Grady. Arguing that such a deal would be bad for jobs, bad for public services, and bad for rights at work, she said: “The Government should put all options on the table, including single market membership, which is the best option we see to protect jobs and safeguard workers’ rights.”
UK Customs after Brexit
Further details of the UK’s post-Brexit Customs Declaration Service (CDS) have been given by HM Revenue & Customs (HMRC). CDS is scheduled to be phased in between this August and early 2019 and will replace the existing Customs Handling of Import and Export Freight (CHIEF) system which processes declarations to facilitate the international movement of goods between the UK and non-EU countries. From early 2019, all declarations made by businesses importing or exporting goods outside the EU will be made using the CDS. Initially, the CDS will run alongside CHIEF, in an arrangement that HMRC anticipates will aid the transition to the new service. Importers, exporters and agents will be informed by their software provider when they need to provide the additional information required in order to start making declarations on the CDS.
That additional information will be required for declarations in order to align with the World Customs Organization (WCO) Kyoto Convention, currently being implemented in the UK through the Union Customs Code (UCC). Businesses will have to supply: an audit trail of previous document IDs; additional party types, such as the buyer and seller; and possible additional commercial references or tracking numbers. There will also be changes between “Header” and “Item” for some data items. To align UK customs data with international standards, there will need to be other changes, including: location of goods identification; the warehouse type code list; item tax lines; the way customs procedures are quoted and the number of items on a declaration. For traders importing or exporting goods outside the EU, they or their agent will need to sign into the CDS on the GOV.UK website through a Government Gateway account. HMRC says that an updated tariff manual will be available in April 2018.
EU agrees to new rules on the energy performance of buildings
The European Parliament and Member States have reached agreement on the text of a new directive that will revise and update the Energy Performance of Buildings Directive (2010/31/EU). Buildings account for 40% of the total energy consumption in Europe. By improving the existing rules, taking advantage of recent technological developments and encouraging further energy efficiency, the EU should make a major step towards fulfilling its 2020 and 2030 energy-efficiency targets. Decarbonising the existing, highly inefficient European building stock is one of its long-term goals. The new directive will promote cost-effective renovation works, introduce a smartness indicator for buildings, simplify the inspections of heating and air condition systems, and also promote electro-mobility by creating parking spaces for electric vehicles. After formal approval of the new legislation by the EU Council and Parliament, it will be published in the EU’s Official Journal. The Member States will then have 20 months to prepare for compliance.
Brexit to leave its mark on intellectual property
The impact of Brexit on trademarks has been set out by the European Union Intellectual Property Office (EUIPO) — and it is not good news for UK firms. In a joint statement with the European Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, the EUIPO confirms that EU trademarks are protected in the EU and not in what are called third countries (those outside the Union). Once it becomes a third country, EU rules on EU trademarks and Community designs will therefore no longer apply in the UK unless under the provisions of some transitional arrangement. Although the statement acknowledges the considerable uncertainties surrounding Brexit, it reminds all right holders and applicants of the legal repercussions associated with leaving the EU and the rules that currently apply. In particular, it highlights the fact that UK nationals will lose the capacity to represent parties before the EUIPO as from the date of withdrawal.
Other than for filing an application for an EU trademark or registered Community design, that means that UK companies will not be entitled to be represented by a UK national unless they fulfil specific criteria — including being qualified as a legal practitioner in a member country of the European Economic Area (EEA). EUIPO has also pointed out that, from the point at which the UK leaves the EU, trademarks already registered will cease to be protected in the UK, while EU trademarks registered as of the withdrawal date will not be protected in this country. In addition, all existing seniority claims in EU trademarks based on national trademark rights in the UK will cease to have an effect in the EU as from the withdrawal date. Further information can be found in a Q&A accompanying the statement at euipo.europa.eu.
EU tackles intellectual property abuse
The EU intends to highlight places where counterfeiting, piracy or other forms of intellectual property (IP) abuse are common practice. To do so, it intends to publish a Counterfeit and Piracy Watch-List which will, the European Commission claims, help alert consumers to potential problems when buying products in the marketplaces concerned. The list is also expected to encourage operators and owners to crack down on IP abuse. Before publishing the list, the Commission is seeking views on which online and physical marketplaces it should be targeting and has launched a public consultation inviting those with concerns to provide it with appropriate evidence. For online marketplaces, submissions should, among other things, include: the domain name of the website concerned; information on the volume of internet traffic the site receives; and an estimate of the number of counterfeit and pirated goods offered or sold on the site. Anyone submitting concerns about goods being sold through a physical marketplace will need to provide the Commission with its name and location, and the identity of the principal owners or landlords.
In addition, the Commission will require details of the main categories of pirated and counterfeit goods sold or distributed there, and an estimate of the volume concerned.
Complainants should also provide an estimation of the economic harm that the IP abuse has caused to the rights holder. The consultation is available at ec.europa.eu and the deadline for responses is 31 March 2018. As indicated above, submissions should be as detailed as possible and should include supporting documents. In addition to compiling and publishing the watch list, the Commission also intends to monitor measures taken by local authorities to reduce the availability of goods and services infringing IP rights in the markets identified.
Commission bites back over Chinese dumping
The arguments about the customs union seem to have concentrated in recent months on whether the UK should be in or out or neither one nor the other. However, the European Commission took action last week which demonstrates that the customs union is a functioning entity and that it can mean acting together against what have been identified as unfair threats from non-EU countries. By way of EU Regulation 2018/186 (which came into force on 9 February and is available at eur-lex.europa.eu), the Commission has imposed anti-dumping duties on Chinese corrosion resistant steel. This means that, for the next five years, these products will face import duties ranging from 17.2% to 27.9%.
These duties must be applied by all members of the customs union as the EU regulation became directly applicable law in all the Member States as soon as it came into force. Corrosion resistant steel is mainly used in the construction industry, for mechanical engineering, in the production of welded pipes and tubes, and in the manufacturing of domestic appliances. The EU has been applying provisional duties on Chinese corrosion resistant steel since August 2017, after an initial Commission investigation indicated the likelihood that the products were being sold in the EU at artificially low prices. Those provisional duties, which would have been repaid had the final decision been that China was not in fact dumping the products, will now be retained.
EU-Africa EPA up and running
The Economic Partnership Agreement (EPA) between the EU and the Southern African Development Community (SADC) has become the first regional EPA in Africa to be fully operational after its implementation by Mozambique. The southeast African nation was, the European Commission said, the last piece of the SADC-EPA jigsaw to fall into place. The other five countries — Botswana, Lesotho, Namibia, South Africa and Swaziland — have been implementing the agreement since October 2016. Implementing the EPA means that Mozambique will not have to pay customs duties on its exports to the EU.
This is significant because the EU is the largest export market for Africa. Exports to the EU represent 22% of SADC EPA countries’ exports so the EPA provides opportunities for SADC countries to create jobs, attract more investment, industrialise and integrate into global value chains. On the EU side, European businesses are increasingly investing in the region. For its part, Mozambique will progressively, over the course of several years, reduce or eliminate customs duties on numerous EU exports. Trade between the EU and Mozambique is currently running at about €2 billion annually. Mozambican exports to the EU include aluminium and raw cane sugar.
Ask the experts
The European Commission has established a new expert group to help determine its future approach to trade issues. The group will, the Commission suggests, provide an additional forum for the sharing of expert advice and differing perspectives on trade. Comprising 30 organisations representing business, trade unions, consumers, the environment and other areas, the group will be consulted on trade negotiations and on areas where the Commission feels it needs a broader perspective. Speaking at the first meeting of the expert group, EU Trade Commissioner Cecilia Malmström said she hoped it would be a forum for open and frank discussion on topics such as the Multilateral Investment Court, e-commerce, trade and gender, trade and consumers, and provisions in trade agreements for SMEs.
At its inaugural get-together, the group and Commissioner Malmström discussed current issues related to trade agreements and possible issues for input and reflection from the group. There was also an in-depth discussion on the issue of consumers and trade agreements, and the Commissioner presented an overview of the state of play of the EU’s ongoing negotiations and other policy issues. Reports of the group’s meetings, together with papers submitted by its members, will be published by the Commission as part of its drive to make trade policy more transparent.
EU trade schemes promote development and human rights
With its Generalised Scheme of Preferences (GSP), the EU is at the forefront of using trade policy to promote sustainable development in the world’s poorest countries. This is the conclusion of a European Commission report which aims to show the positive impact of the Union’s duty-rebate schemes on developing economies. The three-pronged GSP grants preferential market access in varying degrees to developing countries to support the expansion of their exports with the least developed countries granted duty-free access to the EU for all products except arms and ammunition. In the second category, GSP+ beneficiaries export around two-thirds of all product categories duty-free in return for their commitment to effectively implement 27 international core conventions covering labour rights, human rights, good governance and environmental concerns. Finally, standard GSP beneficiaries benefit from reduced customs duties on two-thirds of all EU product categories.
Full details of the report are available at europa.eu and show that, since GSP entered into force in 2014, exports from countries to the EU benefiting from these tariff cuts rose by nearly a quarter to a yearly amount of €63 billion. The EU monitoring reveals many positive changes due to EU engagement related to the scheme including on issues such as women’s empowerment, child and forced labour, torture, illegal drugs trafficking and climate change. A separate document accompanying the report (and available at trade.ec.europa.eu) provides a detailed overview of progress and remaining shortcomings in respect of the scheme.
Time for a change?
Directive 2000/84/EC on summer-time arrangements provides a harmonised date and time for the beginning and end of the summer-time period across the EU, with the aim of helping the internal market to function effectively. However, the European Parliament has noticed increased public concern being expressed about the bi-annual clock change with some claiming that it has negative effects on human health. MEPs have therefore called on the European Commission to conduct a thorough assessment of the directive and, if necessary, to table a proposal to revise it.
MEPs move on truck fuel efficiency
The EU is slowly moving towards bringing lorries into line with cars and vans by requiring manufacturers to report on fuel efficiency standards as the authorities in the USA now do for trucks in that country. The European Parliament’s Environment Committee has recently voted that truck makers must disclose data about their vehicles’ fuel efficiency, including aerodynamic performance, engine, axle and transmission efficiency and rolling resistance. MEPs were told that hauliers spend on average €32,000 a year per truck on fuel but fuel consumption has not improved over the last 20 years. A truck from 2015 still consumes roughly the same amount of fuel as one did in 1995.
They were discussing the European Commission’s draft law on the fuel efficiency of trucks and agreed that it would allow hauliers to make informed purchasing decisions. The committee said that any test results should be made public or accessible to third parties. Speaking for campaigning group Transport & Environment (T&E), Cleaner Trucks Officer Stef Cornelis said: “We welcome that MEPs have chosen to boost innovation rather than withhold efficiency data just because some truck-makers are afraid of competition. This will, she added, benefit transport operators and boost the fight against climate change.”
Brexit set to increase regional inequality
A new study suggests that failure to secure a Brexit deal could see the UK miss out on half a million jobs and £50 billion of investment by 2030. Although London could lose 87,000 of those jobs, the capital is likely to be less hard hit by Brexit than other parts of the country and that, according to Preparing for Brexit (which is available at www.london.gov.uk), will widen inequality in the UK. Compiled by Cambridge Econometrics for the Greater London Authority (GLA), the study considers the potential impact on both London and the wider UK economy of five outcomes of the Brexit negotiations.
Those possible scenarios range from the UK staying in the single market and customs union (essentially maintaining the status quo) through to a hard Brexit (a deal with no transition period, no membership of the single market and customs union, and no preferential EU/UK trade agreement). Modelling of the impact that each scenario could have on nine key sectors of the economy shows that every outcome would be bad for the British economy — with more damage being done by the harder Brexit options. The financial and professional services sector would be hardest hit by a no deal hard Brexit, missing out on up to 119,000 jobs nationally. That scenario could also lead to 92,000 fewer jobs in science and technology, and 43,000 fewer in construction.
Can UK match EU’s trade remedy regime?
Fears that the UK will be flooded with cheap steel, ceramics and other products after Brexit have been voiced by a leading trade union. Ahead of the Taxation (Cross-border Trade) Bill receiving its second reading, the GMB called for the proposed Trade Remedies Authority (TRA) to be given the powers necessary to protect UK markets and jobs. The TRA itself is to be established under distinct but related legislation — the Trade Bill. However, the union argues, the effectiveness of the protection will depend on the Government introducing strong anti-dumping legislation.
Tackling unfair dumping here and in other Member States is currently the responsibility of the European Commission but once the UK leaves the EU, it will have to defend itself against unfair trading practices — something the GMB fears will be hard to do if the Government continues with its current approach to the issue. In a letter signed by the union and nine other organisations that are part of the Manufacturers Trade Remedies Alliance (MTRA), it accuses the Government of ignoring previous submissions regarding the proposed UK trade remedy system. Unless the Government changes tack, the GMB and other signatories fear that the UK will be heading towards “the weakest trade remedy regime in the world”.
Brexit progress boosts business optimism
Progress in the Brexit negotiations has caused British businesses to take a more optimistic view of their prospects in the coming year. Responding to last December’s agreement to move to the next phase of talks, companies told business advisors BDO that they are now more confident about their fortunes in 2018. That confidence was reflected in BDO’s latest Business Trends Report, which reveals that hiring intentions have returned to near-record highs. BDO’s Optimism Index, which indicates how firms expect their order books to develop over the coming six months, increased to 102.15 in December — up from 102.05 in November.
Chambers call for Brexit clarity
Seven national Chambers of Commerce have urged the UK and the EU to move to Brexit transition and trade talks as soon as possible. In an unprecedented joint statement, the British Chambers of Commerce (BCC) and six other European bodies have called on the two sides to provide clarity on what the future relationship will look like and to work for a trade-friendly agreement with a realistic transition period. Between them, the seven countries represented by the chambers account for 70% of EU-UK trade. Coming in the wake of the December 2017 agreement on the first phase of the Brexit negotiations, the statement says that a “no deal” outcome would be extremely undesirable for all sides.
Expressing their increasing concern about continued rhetoric on a no deal scenario, the seven chambers make clear that it would be extremely undesirable for businesses, as they would face higher tariffs, more burdensome customs procedures and longer delays than under a negotiated separation. It is clear that companies in the UK and in Europe all want talks to move forward to the future trade relationship without delay, BCC Director General Dr Adam Marshall said.
No time to waste on transitional Brexit arrangements
When the two teams return to the negotiating table after the Christmas break, the EU and the UK must move quickly to reach agreement on standstill transitional arrangements. Pointing this out, Parliament’s Treasury Committee said that it agrees with Chancellor Philip Hammond that transitional arrangements are “a wasting asset”. Its latest report, Transitional Arrangements for Exiting the European Union, which can be found at publications.parliament.uk, argues that there are two broad possible outcomes for UK-EU trade on 30 March 2019. A reversion to a trade relationship based on World Trade Organization (WTO) commitments (effectively “no deal”), or the preservation, on a temporary basis, of the status quo, through a standstill transition.
Stressing the need for the latter result, the committee insists that the transitional arrangements must be sufficiently simple to negotiate within a matter of weeks in order to provide early certainty from 30 March 2019. The report also points out that it is highly likely that for certain sectors, including financial services, the standstill transition period will have to be followed by an adaption period, once the terms of the future relationship become better known. The committee goes on to argue that, if it expedites the negotiations, the Government should not rule out a transitional arrangement that encompasses EU rules beyond those pertaining to the Single Market and Customs Union, and retains, on a temporary basis, the principles of direct effect and supremacy of EU law.
Cross-border parcel delivery
According to the European Commission, high prices of cross-border parcel delivery are one of the biggest obstacles for consumers and retailers, especially small and medium-sized companies, who would like to buy and sell online across the EU. A lack of transparency surrounding parcel delivery prices encourages operators to maintain prices that in some cases are unreasonably high, it has claimed. “Contrary to what people might think,” the Commission explained, “high cross-border parcel prices do not always reflect the underlying costs involved. For example, the price of a comparable standard 2kg parcel could be very high from one country and much lower from another, even if both have similar labour costs and the parcels will travel a similar distance.” It cites the example of sending a parcel from the Netherlands to Spain, which would cost €8.73, while to do the same thing in reverse would cost €30.37. A new EU regulation is about to come into force which will increase price transparency and improve regulatory oversight in the EU cross-border parcel market. See europa.eu for more details of the new legislation.
Cheaper, safer and more innovative electronic payments
European consumers will be able to reap the full benefits of paying online for goods and services, thanks to new rules that will make it cheaper, easier and safer to make electronic payments. The revised Payment Services Directive (PSD2), which came into force on 13 January 2018, aims to modernise Europe’s payment services to the benefit of both consumers and businesses, so as to keep pace with this rapidly evolving market. It could save more than €550 million per year for EU consumers who will also be better protected when they make payments. See the European Commission website for more information.
EU bid to improve transparency of working conditions
The European Commission has put forward a proposal for a new directive establishing more transparent and predictable working conditions across the EU. The proposal creates new minimum standards to ensure that all workers, including those on atypical contracts, benefit from more predictability and clarity as regards their working conditions. Employment Commissioner Marianne Thyssen explained: “The world of work is changing fast with a growing number of non-standard jobs and contracts. This means that more and more people are at risk of no longer being covered by basic rights, starting from the right to know the terms under which they work.”
At the same time, the Commission wants to avoid adding to the administrative burden on employers as far as possible, including by giving them the possibility to provide the requested information electronically. The new legislation aims to align the notion of a worker to the case law of the European Court of Justice (ECJ). Forms of employment that are often excluded will be brought within the scope of the directive. This includes domestic workers, marginal part-time workers or workers on very short contracts, on-demand workers and platform workers. More information on the proposal can be found at europa.eu.
Reassurance for EU workers in the UK
The Home Secretary, Amber Rudd, has written an open letter to EU citizens in the UK reassuring them that the rights they and their families currently have will remain broadly the same under the recent agreement reached between the UK Government and the EU. Employer groups have repeatedly expressed concerns that they were losing valuable workers, or struggling to recruit the skilled workers they wanted from other Member States, because of the uncertainty that people felt since the EU referendum. The Home Secretary acknowledges that EU citizens have had “an anxious wait while the fine details were ironed out” but has now emphasised that they will continue to have access to healthcare and benefits and their pensions will be protected.
In addition, their existing close family members living outside the UK will retain the right to join them in the future. “These rights will be cemented in UK law,” Ms Rudd said, “meaning you can live your life as you do now with the security of knowing they won’t change.” She also promised that the newly-designed digital system through which EU citizens will be able to get their new status will minimise bureaucratic hurdles and applications will cost no more than the fee a British person pays for a passport. Anyone who already has valid permanent residence documentation will not be charged. More detail about the settled status scheme is expected soon and applications should open during the second half of 2018. The full text of Ms Rudd’s letter (and access to further guidance) can be found at www.gov.uk.
UK still an attractive global work destination
Although it has fallen behind Canada into third place, the UK remains one of the most attractive places in the world to work. The USA holds on to the top spot as the most desired country to relocate to, according to a new report by accountancy and advisory firm BDO, despite slightly fewer people thinking so as it records a 4% drop in the last five years. The report surveyed over 10,000 people in 20 countries and asked them to pick their top three destinations to work. Canada rose by 2% to 22% overtaking the UK which dropped by 3% to 19% to be level pegging with Australia.
Five years ago, the UK was joint second destination of choice for those European workers who were questioned, but in the latest survey it has failed to make the top six with workers from other EU Member States now tending to shy away. Germany, Switzerland and Spain were all more popular destinations for other Europeans than the UK. Paul Eagland, Managing Partner at BDO said: “UK businesses are already struggling with a skills shortage. The impact of the EU referendum and uncertainty around a new trade deal is likely to make this worse.” It is, he went on, absolutely imperative that the Government makes it clear to the world that the UK is still a great place to do business so that it continues to attract the world’s brightest and best to work here.
EU VAT deal to boost e-commerce
Businesses selling goods online stand to benefit from changes to EU rules on VAT — although by the time they are fully implemented, the UK will have left the Union. An agreement reached by the Member States will make it easier for consumers and businesses — especially start-ups and small and medium-sized enterprises (SMEs) — to buy and sell goods across borders via the internet. Companies selling abroad online will deal with VAT in the same way as they do for sales in their own countries, Andrus Ansip, Commission Vice-President for the Digital Single Market explained. The new rules will, however, be introduced progressively and will not fully enter into force until 2021. By 1 January 2019, VAT rules for start-ups, micro-businesses and SMEs selling goods to consumers online in other EU Member States will be simplified.
VAT on cross-border sales under €10,000 a year will be handled according to the rules of the home country of the smallest businesses. That will, the Commission points out, help some 430,000 businesses across the EU. For SMEs, procedures will be simplified for cross-border sales of up to €100,000 annually. The new legislation will also introduce an online portal which will allow companies that sell goods to their customers online to deal with their VAT obligations in the EU more easily. Designed to be easy to use, the portal will enable businesses to work in their own language and will negate the need for them to register for VAT in every EU Member State into which they want to sell. Commissioner Moscovici added that the changes will also ensure that non-EU businesses do not get preferential treatment when selling to EU consumers.
EU proposes new tools to combat VAT fraud
There was shock in some quarters when it was confirmed that the Government may need to pay upwards of €50 billion to settle its commitments before leaving the EU. And yet, at least that sum is lost to the Member States every year in VAT fraud. With this in mind, the European Commission has unveiled new tools to make the VAT collection system more effective and to close loopholes which can lead to large-scale fraud. It has highlighted revelations in the “Paradise Papers” which show how tax avoidance schemes can be used to help wealthy individuals and companies to circumvent the EU’s VAT rules. Recent reports also suggest that VAT fraud schemes can be used to finance criminal organisations, including terrorists.
The new proposals should enable Member States to exchange more relevant information and to co-operate more closely in the fight against these activities. One aim is to improve information sharing between tax and customs authorities for certain customs procedures which are currently open to VAT fraud. Under a special procedure, goods that arrive from outside the EU with a final destination of one Member State can arrive into the EU via another Member State and transit onwards VAT free. VAT is then only charged when the goods reach their final destination. This feature of the EU’s VAT system aims to facilitate trade for honest companies, but can be abused to divert goods to the black market and circumvent the payment of VAT altogether. Under the new rules, information on incoming goods would be shared and co-operation strengthened between tax and customs authorities in all Member States. See ec.europa.eu for more details.
Survey highlights importance of UK-EU trade
Many British businesses still see trade with Europe as their priority. Responding to a survey conducted by the British Chambers of Commerce (BCC), 76% of some 1300 businesses identified Europe as their top export market over the next three years. Of those, 44% identified Western Europe as their destination — whether for starting or continuing exporting — while 32% preferred Central and Eastern Europe. Western Europe was also cited by 36% of respondents as the market they intend to import from. Businesses looking to import told the BCC that a lack of suppliers in the UK is the main reason (43%), followed by exchange rates (41%) and price (33%).
Now that negotiations on the future UK-EU relationship are set to begin, BCC Director General Dr Adam Marshall said, businesses need clarity on the practicalities of the future trading relationship between the UK and the EU without delay. UK firms anticipate the most significant barriers to trade being tariffs (46%), customs procedures (39%) and local regulations (20%).
WTO fails to beat the drum for world trade
The latest World Trade Organization (WTO) Ministerial Conference, a three-day event held in Buenos Aires, was not the bold endorsement of the multilateral trading system that its supporters had been hoping for. According to the WTO’s final press release on the conference, its main achievement was “a commitment from members to secure a deal on fisheries subsidies which delivers on Sustainable Development Goal 14.6 by the end of 2019”.
Taking his lead from President Donald Trump’s decidedly anti-world trade approach, US Trade Representative Robert Lighthizer accused the WTO of failing to do enough to tackle perceived unfair trade practices (particularly from China) as his President told Fox News (incorrectly) that the USA loses almost all of its lawsuits in the WTO. “The WTO was set up for the benefit of everybody but us,” he went on, despite statistics showing that it has won more than 90% of the disputes it has taken forward (while losing an almost equal percentage of the ones filed against it). Apparently in retaliation, the USA is blocking appointments to two vacancies on the seven-strong WTO appellate body that ultimately rules in trade disputes. With other retirements pending, the body could be down to the bare minimum of three judges by mid-2018 and would effectively cease to operate.
Dover is the key to trade with the EU
With more than 2.6 million lorries travelling through it in 2017, Dover’s position as the port of choice for hauliers travelling to and from Europe was confirmed, at least according to its Chief Executive Tim Waggott. Last year’s figures represented an increase of almost 10,000 units on the previous year and a 33% rise over the last five years, he pointed out, equivalent to handling nearly 650,000 more units over that period. Dover, which is Europe’s busiest ferry port, handles 17% of the UK’s entire trade in goods — worth an estimated £122 billion last year. The recent year-on-year increases in freight traffic through the port and continued growth projections further highlight that the key trade route connecting Ireland, the UK and the rest of Europe is vital to the UK’s economic prosperity as well as the rest of the EU, Mr Waggott argued.
“With Brexit talks about to move on to trade, it is essential that all sides commit to the right solution to ensure fluidity at Dover and the wider trade corridor along with a more resilient strategic road network to support it,” he added. His views were echoed by the Freight Transport Association (FTA), with Deputy Chief Executive James Hookham emphasising that the ease with which vehicles and their loads can pass through Dover and the French ports will be a big test of the post-Brexit arrangement.
UK agrees to promote gender inclusive trade initiative
The UK is one of 118 countries supporting the recently signed Buenos Aires Declaration on Women and Trade. An initiative of the World Trade Organization (WTO), the Declaration seeks to remove barriers to women’s economic empowerment and to improve their access to trading opportunities. It was signed at the WTO’s 11th Ministerial Conference (MC11) held in Argentina and attended by trade ministers and other senior officials from the organisation’s 164 members. MC11 (details of which can be found at www.wto.org) is the last that the UK will attend as a member of the EU.
EU looks east
Talks with the UK are not the only negotiations in which the EU is seeing “significant progress” as it has reported that an Economic Partnership Agreement (EPA) with Japan is a step closer following the successful conclusion of final discussions. The EPA — which is the biggest bilateral trade agreement ever negotiated by the EU — will remove the vast majority of the €1 billion of duties paid annually by EU companies exporting to Japan. It will also remove a number of long-standing regulatory barriers and open up the Japanese market of 127 million consumers to EU exports across a range of sectors.
For agricultural exports from the EU, the agreement will scrap duties on many cheeses and on wine. Substantial increases in EU beef exports to Japan have been agreed, while pork exports are set to benefit from duty-free trade for processed products and almost duty-free trade for fresh meat. The agreement also opens up services markets, in particular financial services, e-commerce, telecommunications and transport. It guarantees EU companies access to major procurement markets in Japan and removes obstacles to procurement in the railway sector. The potential of this deal is enormous, Trade Commissioner Cecilia Malmström said, with the EU and Japan fully on course to sign it in 2018 so that EU firms, workers and consumers will be able to enjoy the benefits as soon as possible.
Promoting fair and ethical trade
A new award has been set up which will recognise the significant role that cities play in providing platforms for fair and ethical trade schemes. Launched by the European Commission, “EU Cities for Fair and Ethical Trade” is part of the EU’s broader efforts to ensure responsible supply chains that respect human rights, labour rights and the environment. Applications are being invited from EU cities with populations of 20,000 inhabitants or more. Those applying for the award should show that they are enabling fair and ethical grassroots activities, creating awareness and incentives, and should demonstrate the impacts of fair and ethical trade practice on trading communities.
In addition to the publicity and recognition that the award is anticipated to attract, the winning city will be expected to champion fair and ethical trade by participating in a development co-operation project funded to the tune of €100,000. The Commission says that, as well as an overall award winner, there will also be several “special mention” awards for other cities. Further details, including how to apply, can be found at www.trade-city-award.eu. The deadline for applications is 13 April and an award ceremony will take place on 27 June 2018.
Last reviewed 28 December 2018