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Report: EU trade agreements in place deliver tangible benefits

New Commission report highlights positive outcomes of existing
EU trade agreements and identifies areas for improvement

The EU has today published a report assessing the implementation of its existing trade agreements. This horizontal report is the first of its kind and sheds light on what happens after trade agreements are negotiated and have entered into force.

The publication is another step towards a fully transparent and inclusive trade policy, in line with the Commission’s commitments set out in the EU’s 2015 ‘Trade for All’ strategy.

Commenting on the report, Commissioner for Trade Cecilia Malmström said: “The success of EU trade policy is measured not only by striking new trade deals but also by ensuring that our existing agreements actually deliver. The report published today confirms that our trade agreements are a boost for the European economy: they have meant significant increases in exports, benefitting EU firms and their employees. We are also on the right track when it comes to engaging concretely with our partners on labour and environmental standards. In addition, this report has valuable lessons about what we can do better when putting new agreements in place.”

Overall, EU agreements are shown to lead to more EU exports and growth, with major export increases to, for example:

  • Mexico (+416% since 2000)
  • Chile (+170% since 2003)
  • South Korea (+59% since 2011)
  • Serbia (+62% since 2013)

The report shows that it is often the EU agricultural and motor vehicles’ sectors that benefit the most. For example, exports of cars to South Korea have increased by 244% since 2011, and in the case of the agreement with Colombia and Peru there was a 92% and 73% increase, respectively, in the exports of EU agricultural goods.

The report investigates also the impact of the provisions included in the ‘Trade and Sustainable Development’ (TSD) chapters, covering environment protection and labour rights, present in the newer agreements. While it is too early to draw general conclusions on the implementation of sustainable development goals included in the EU trade agreements, given this is a relatively recent practice, there are already numerous examples of positive collaboration on issues going beyond trade liberalisation that have been made possible thanks to these agreements. The EU could for instance engage on issues such as freedom of association, violence against members of trade unions, child labour, labour inspections, collective bargaining, tripartite consultation, and health and safety at work.

The first lessons highlighted in the report in relation to the implementation of sustainable development chapters will fit into the Commission’s broader debate on how to improve the effectiveness of sustainable development rules in our trade agreements, launched with a discussion paper in July of this year.

The report also identifies areas for improvement to increase the benefits of existing agreements. Despite the overall positive impact of trade agreements for EU exports, EU companies do not take full advantage of the opportunities offered. For example, the extent to which EU businesses are using tariff reductions is lower on the EU side than that of our partners. For exports to countries where there are newer trade deals in place, EU companies make use of available duty rebates for around 70% of their exports, whereas our partners use that duty rebate in around 90% of cases.

Also, for some sensitive products, instead of full liberalisation, the EU and its partners agree on limited market openings through tariff-free allowances, known as Tariff Rate Quotas (TRQs). The report shows that these possibilities are often underused by EU exporters: for cheese, only 4.3% of the total quota was used for exports to Peru, 7.9% to Colombia and 44% to Central America. The same is true for the use of some the TRQs conceded by the EU on some sensitive products, despite these issues being amongst the most controversial during the negotiations.

The report highlights an increasing need to raise awareness amongst EU companies – particularly small and medium-sized ones – about the opportunities that these deals offer, to expand their exports and grow their businesses.

The report will now be subject to discussion with Members of the European Parliament and Member States’ representatives in the Council. Commissioner Malmström will present the report to Member States’ Ministers at the Council meeting on Friday, 10 November. It will also be a basis for discussion with civil society, the next occasion being the upcoming EU Trade Policy Day on 5 December in Brussels.

For the full report please click HERE

Source: European Commission, 9th November 2017

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Industrial producer prices up by 0.6% in both euro area and EU28

 

In September 2017, compared with August 2017, industrial producer prices rose by 0.6% in both the euro area (EA19) and the EU28, according to estimates from Eurostat, the statistical office of the European Union. In August 2017, prices increased by 0.3% in the euro area and by 0.4% in the EU28.

In September 2017, compared with September 2016, industrial producer prices rose by 2.9% in the euro area and by 3.3% in the EU28.

Monthly comparison by main industrial grouping and by Member State
The 0.6% increase in industrial producer prices in total industry in the euro area in September 2017, compared with August 2017, is due to rises of 1.5% in the energy sector, of 0.4% for intermediate goods and of 0.2% for durable consumer goods, while prices remained stable for capital goods and non-durable consumer goods.

Prices in total industry excluding energy rose by 0.1%.

In the EU28, the 0.6% increase is due to rises of 2.0% in the energy sector, of 0.4% for intermediate goods, of 0.2% for durable consumer goods and of 0.1% for non-durable consumer goods, while prices remained stable for capital goods.

Prices in total industry excluding energy rose by 0.2%.

The highest increases in industrial producer prices were observed in the Netherlands (+2.9%), Denmark (+1.4%), Belgium (+1.3%) and Greece (+1.2%), while a decrease was recorded in Cyprus (-1.4%).
Annual comparison by main industrial grouping and by Member State The 2.9% increase in industrial producer prices in total industry in the euro area in September 2017, compared with September 2016, is due to rises of 4.6% in the energy sector, of 3.3% for intermediate goods, of 2.3% for non-durable consumer goods, of 1.0% for capital goods and of 0.7% for durable consumer goods.

Prices in total industry excluding energy rose by 2.2%.

In the EU28, the 3.3% price increase is due to rises of 6.0% in the energy sector, of 3.5% for intermediate goods, of 2.7% for non-durable consumer goods, of 1.1% for capital goods and of 1.0% for durable consumer goods.

Prices in total industry excluding energy rose by 2.5%.

Industrial producer prices rose in all Member States. The largest increases were recorded in Belgium (+7.0%), the Netherlands (+6.4%), Bulgaria (+6.0%), Estonia (+5.5%) and the United Kingdom (+5.4%).

Graph: Eurostat Industrial Prices

Source: Eurostat, 7th November 2017

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CIP: Trading between the EU and Canada

 

This Customs Information Paper (CIP) brings to your attention the introduction of the EU and Canada Comprehensive Economic and Trade Agreement (CETA), specifically the preferential arrangements contained therein.

An outline of the preferential arrangements is included in this CIP together with details on how to declare preferential imports on the Customs Handling of Import and Export Freight (CHIEF) system.

Full details on the preferential arrangements can be found within the Official Journal L11/2017 at ‘Protocol on rules of origin and origin procedures’, which runs from page 465 to 566 of the agreement. All page numbers shown in this CIP refer to this document.

In Official Journal L11/2017, dated 14 January 2017, the EU published full details on the EU and Canada CETA.

As part of this agreement certain goods, either originating in Canada for import into the EU or originating in the EU for export to Canada, may be eligible for preferential duty rates in the importing party if the required conditions are met, the basic details of which are explained in this CIP.

The agreement has now been ratified by the Canadian government and HM Revenue and Customs (HMRC) is taking steps to ensure the preferential rates provided for within the ‘Protocol on rules of origin and origin procedures’ section of the agreement are available on the CHIEF system when it enters into force.

This agreement was provisionally implemented on 21 September 2017 as reported in CIP 19 (2017).

For full information on preferential duty rates as a result of the CETA agreement please click HERE

Updated 19th October by Gov.uk

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UKEF announces further Funding Support for SMEs

UK Export Finance (UKEF) is launching a new partnership with five major high street banks to allow smaller businesses to access millions of pounds in government-backed trade finance.

UKEF, as part of the Department for International Trade, provides financial support to help UK companies sell to international customers.

The new partnership with Barclays, HSBC, Lloyds, RBS/NatWest and Santander was initially agreed in July.

For the first time companies which supply exporters will be able to access UKEF-backed finance to help them to become part of major export contracts.

The partnership is able to offer finance for up to £2m and SMEs can access UKEF support directly from their bank quickly and efficiently, without the need to apply separately.

Where previously it could take weeks in addition to the banks’ own turnaround times to access this support, it will now take a matter of seconds where an application for finance is eligible.

UK SMEs that aren’t yet selling overseas but are supplying products directly to those who are, will also be able to qualify for UKEF support.

Secretary of state for international trade, Liam Fox said: “Small businesses are the backbone of our economy, and giving them the support they need to seize international trading opportunities is a priority for the Department for International Trade as an international economic department.

“That’s why we’re partnering with the five major high street banks to make government-backed finance from UK Export Finance readily available, in a matter of seconds, opening up new global contracts to businesses across the UK.”

Mike Cherry, national chairman at the Federation of Small Businesses (FSB), added: “Through our work with the secretary of state for international trade, I am delighted to see the government’s plans to improve access to export finance.

“The success of the UK economy rests on helping more small businesses to export, and export more. FSB research shows 20 per cent of UK small firms already export, and with the right support this could double.

He added: “Today’s announcement of faster and more readily available finance means more small businesses will be able to access growth markets around the world.

“Small firms’ contribution to the UK’s export market is of course not limited to those that sell products overseas.

“Our research highlights that one in six of all UK small businesses also form part of a supply chain of which the end product is exported, so opening up export finance to this group of firms is great news.”

Source: Insider Media, October 2017

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Call: British Consulate-General survey on non-tariff barriers to trade in Hong Kong

 

The British Consulate-General is capturing business views on non-tariff barriers to trade.

If you are a UK business trading in Hong Kong please take a few minutes to help us gather views on barriers to trade in Hong Kong. Your views are very important to us. The survey questions can be accessed through this link and can be filled in anonymously if you wish.

The survey will close on 30 September.

The British Consulate-General Hong Kong is conducting a joint trade review with the Trade and Industry Department of the Hong Kong Special Administrative Region to identify options to overcome non-tariff barriers to the trade in goods and services between the UK and Hong Kong. The Trade Review seeks to capture the business community’s views on what the barriers are and in which sectors they have the greatest impact.

Source: 7th September 2017 www.gov.uk

 

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Euro area annual inflation up to 1.5%

 

Euro area annual inflation is expected to be 1.5% in August 2017, up from 1.3% in July 2017, according to a flash estimate from Eurostat, the statistical office of the European Union.

Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in August (4.0%, compared with 2.2% in July), followed by services (1.6%, stable compared with July), food, alcohol & tobacco (1.4%, stable compared with July) and non-energy industrial goods (0.5%, stable compared with July).

Source: Eurostat, for full article click HERE

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Taming The Dragon to explore business links with China

Businesses looking to build on Sheffield’s expanding links with China are being encouraged to sign up to a number of events designed to help them explore new opportunities in the country. Sheffield City Council has launched its Sheffield China Business Programme, a series of six seminars for businesses to unlock potential opportunities and understand the different ways of working in the country. It comes as the council prepares for a trade delegation to China in November this year.

The seminars begin with Taming the Dragon: An Overview of the Chinese Market, on Wednesday 6 September, starting at 8am at Sheffield Town Hall (Reception Room A). Here, organisers will reveal more about the so-called golden era of UK-Chinese relations and the continuing investment between the two countries.

At the first seminar, Ben Hui, China project manager at Creative Sheffield, will give an overview of China’s market.

Hailing Yu, China business advisor from the China Britain Business Council (CBBC) will give an update on the latest sector specific opportunities for Sheffield companies and Jerry Cheung, managing director of the New Era Square development at St Mary’s Gate, will discuss why China is a great destination for inward investment and share his secrets on how to successfully attract investors.

Duncan Hoyland, export co-ordinator of The Department of International Trade will also tell delegates how the government can support businesses in successfully exporting to China.

Councillor Mazher Iqbal, cabinet member for business and investment at Sheffield City Council, said: “Sheffield already has an enviable relationship with China, educating thousands of China nationals at its two universities and working closely on the New Era Square development as well as many other projects.

“These seminars will bring in the very best local and international expertise to help businesses explore their own connectivity with China, giving them a tremendous tool-kit to tackle trade overseas.”

Scheduled events: For more information and to book please click the links below

6 September 2017: Taming the dragon: An overview of the Chinese Market

4 October 2017:  Doing Business in China: An Introduction to Chinese Business Culture and Etiquette

8 November 2017: Developing Your Market in China: Sales, Marketing & Business Development

6 December 2017: How to get your Intellectual Property Protected Rights in China?

10 January 2018: Getting paid from China: Advice on Finance and Money Repatriation

7 February 2018: What is the Belt & Road Initiative? What are The Opportunities for Businesses in The Northern Powerhouse? 

The China Business Seminar series is being delivered in association with programme partners:

  • The Confucius Institute
  • China Britain Business Council
  • China Brampton
  • CISDI
  • Department of International Trade
  • EasyMoshi
  • International Trade Forum
  • Irwin Mitchell
  • Lloyds Bank
  • New Era Development
  • Santander UK
  • Sheffield Chamber of Commerce
  • Sheffield City Region
  • South Yorkshire International Trade Centre
  • Withers & Rogers
  • Yee Kwan Ice Cream.
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Inside the international suitcase: The UK’s top holiday exports revealed

Published by .gov.uk, 12th August 2017

Dr Liam Fox encourages businesses to export as figures reveal the UK exported more than £300 million worth of holiday goods in 2016.

As millions of people fly away for the summer break, so do British goods as latest figures show sunglasses, swimwear and ice-cream are big exports, accounting for more than three quarters of UK holiday goods.**

Latest HMRC statistics show the UK exported more than £302 million worth of holiday goods (2016), including £160 million worth of sunglasses, £93 million worth of swimwear and £16 million worth of ice-cream. UK flip flops are also a big summer hit, with £8 million worth exported around the world.

DIT helped to secure billions of pounds in export opportunities over the past year, setting up 11 trade working groups across 16 countries to strike trade deals and strengthen commercial ties with key trading partners.

Now the International Trade Secretary, Dr Liam Fox is encouraging other UK businesses to seize the exciting opportunities posed by trade with the rest of the world after Brexit.

International Trade Secretary Dr Liam Fox said:

From ice-cream to swimwear, you can find UK holiday exports in travel destinations around the world. Last year alone, more than £300 million worth of these goods have been sold to shoppers across the globe showing increasing demand for home-grown summer essentials.

As an international economic department, we are supporting British business to take advantage of the growing global markets after we leave the EU and design a trade relationship in Britain’s national interest. There has never been a better time for our dynamic and innovative businesses to export their goods and services abroad.

Overall latest trade statistics show that UK exports of goods and services have increased – exports stand at £547.6 billion, up 5.8% on 2015.

The UK also attracted more foreign direct investment projects than ever before (year 2016 to 2017). With more than 2,200 projects recorded, the post-referendum figures show an increase of 2% the previous year.

Global markets

In regards to trade, the European Commission states that 90% of global growth in the next 20 years will be outside the EU. In promising news for trade deals, outside the EU some of the biggest markets for holiday exports include South Korea, Australia, UAE, Hong Kong and the USA.

Sunglasses remain one of the top holiday exports, with £3.8 million worth sold to Hong Kong, £4.6 million worth of UK swimwear to the USA and more than £1.4 million worth of flip-flops sold to non-EU countries.

Card games are another must-have holiday item and £3.7 million of UK playing cards exported to non-EU countries last year, with £2.1 million heading to Australia.

Holidaymakers across the world are also keeping cool with British ice-cream with £1.3 million heading to non-EU countries.

Through great.gov.uk, the government gives UK businesses access to millions of pounds’ worth of potential overseas business, helping them start or increase exporting with a ‘matching service’ for global buyers and lists thousands of export opportunities at a click of a mouse.

DIT has also doubled UK Export Finance’s risk appetite to £5 billion, to ensure no viable export deal fails due to lack of finance and insurance.

Notes to editors

**The worldwide exports of sunglasses, swimwear and ice-cream in 2016 equates to £269.6 million.

The UK exported £302.2 million of the following holiday goods:

  • sunglasses
  • swimwear
  • playing cards
  • inflatable balls
  • ice cream
  • travel sets
  • flip flops

This is not an exhaustive list of all holiday goods.

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Latest HMRC Export and Import Statistics – Released 10th August 2017

Date: 10 August 2017

The latest trade data was published by UK Trade Date today and the picture looks as follows.

In June 2017 the value of exports (EU and Non-EU) decreased to £28.3 billion, and imports (EU and Non-EU) increased to £41.7 billion, compared with last month. Consequently the UK is a net importer this month, with imports exceeding exports by £13.4 billion.

Key Points Highlighted by HMRC

  • Total trade exports for June 2017 were £28.3 billion. This was a decrease of £1.0 billion (3.5 per cent) compared with last month, but an increase of £3.6 billion (15 per cent) compared with June 2016.
  • Total trade imports for June 2017 were £41.7 billion. This was an increase of £1.3 billion (3.3 per cent) compared with last month, and an increase of £1.6 billion (4.0 per cent) compared with June 2016.
  • The UK was a net importer this month, with imports exceeding exports by £13.4 billion


Our Comments

The Top 25 Trading Partners for UK Exporters shows little change in the table (see below), but it is interesting to look behind the scene.

Whilst the US is still at No 1 and exports in comparison to Year to Date 2016 figure, export to the US has increased by 6.4%, however, the comparison to the previous month, ie May 2017 to June 2017  showed a decrease by a – 19.1%.

Equally UK Exports to China decreased by 18.8% in comparison to May 2017, dropping from 6th to 7th place in the table.

All other figures noted in comparison to YTD2016 to YTD2017 remain positive, bar Hong Kong (-2.1%) and Saudi Arabia (-6.4%).

At the top of the table of increased exports in comparison to last year is Turkey (+74.2%) followed by Switzerland (+60) and South Korea (49.7%).

Qatar dropped off the Top25 UK Export list, replaced by Russia.

Top 25 UK Import Trading Partners’ list sees little change.

Top 25 UK Export Trading Partners: US, Germany, France, Netherlands,  Irish Republic, China, Switzerland, Belgium, Spain, Italy, UAE, Hong Kong, Turkey, South Korea, Sweden, Japan, , Canada, Poland, Singapore, , Low Value Trade (ZY), Saudi Arabia, Australia, India Norway, Russia

Top 25 UK Import Trading Partners: Germany, US, China, Netherlands, France, Belgium, Norway, Italy,Spain, Irish Republic, Canada, Japan, Poland, Hong Kong, Switzerland, Turkey,  India, Sweden, Low Value Trade (ZY), South Africa, Czech Republic, Russia, Denmark, South Korea, UAE

Source and full information on Top Trading Partners by Country, SITC or Chapters please visit  published 10th August 2017, HMRC

 

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New Export Partnership with Turkey to boost UK Trade

UK and Turkey will co-finance projects and contracts as part of an agreement to strengthen trade co-operation and boost investment between the two countries.

The government’s export credit agency, UK Export Finance (UKEF) and its Turkish counterpart, Export Credit Bank of Turkey (ECBT) have signed the agreement as the government increased its support for UK businesses trading with Turkey.

UKEF and ECBT will partner to identify and promote opportunities for UK-Turkey trade. They will also now be able to co-finance projects in other countries, combining their financial support to help UK and Turkish exporters secure major global contracts.

This comes as UKEF support for exports to Turkey doubles to up to £3.5 billion, making an additional £1.75 billion available for UK companies selling to Turkey and for Turkish investors buying British products and services. UKEF financing is also now available in Turkish Lira, along with 40 other global currencies, making it easier for Turkish companies to buy UK products using their local currency.

International Trade Minister, Greg Hands, said:

This partnership is a boost to our trading relationship and businesses in both countries. Working with Turkey to secure contracts for UK and Turkish exporters, and increasing our support for UK businesses trading with Turkey, will open new opportunities, not only in Turkey, but across the world.

Adnan Yildrim, General Manager, Export Credit Bank of Turkey, said:

I am very excited about this partnership, as the opportunity for stronger ties between UK and Turkish businesses will have huge benefits for both countries’ continued growth and prosperity. This agreement lays the groundwork for significant engagement and will act as a strategic tool to enhance the already robust economic relations between the two countries who are longstanding close allies. I expect that both sides will start to reap the fruits of the agreement in the shortest time.

The UK and Turkey already shared £11.9 billion worth of trade in 2016, up 70% on 2009. The UK and Turkey are committed to further strengthening this relationship in coming years.

Source: Gov.uk, 2nd August 2017

Notes for Editors

  1. UK Export Finance is the UK’s export credit agency and a government department, working alongside the Department for International Trade as an integral part of its strategy and operations.
  2. It exists to ensure that no viable UK export should fail for want of finance or insurance from the private market. It provides finance and insurance to help exporters win, fulfil and ensure they get paid for export contracts.
  3. UKEF can support companies of any size and in any sector, from goods to services and intellectual property.
  4. UKEF has a regional network of export finance managers supporting export businesses.
  5. UKEF supports exporters with a range of products that include:
    • Bond insurance policy
    • Bond support scheme
    • Buyer & supplier credit financing facility
    • Direct lending facility
    • Export insurance policy
    • Export refinancing facility
    • Export working capital scheme
    • Letter of credit guarantee scheme
  6. Find the latest information on UKEF’s country cover positions.
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