The Week in Trade: Italy withdraws from BRI, clouds over Mercosur and trade talk at COP28

Fri 8 Dec 2023
Posted by: Benjamin Roche

This week saw clouds gathering over a potential EU-Mercosur trade deal, trade talk at COP28 and the announcement of a package of customs changes from the government. In Italy, meanwhile, prime minister, Georgia Meloni, cancelled her country’s participation in China’s Belt and Road Initiative (BRI), at the same time as South America is looking to get itself connected with an injection of infrastructure investment.

The big picture: Italy’s decision to withdraw from China’s BRI, reported by BBC News among others, marks the end of the participation by the only Western country to sign up.

It comes ahead of a deadline at the end of the year, before which Italy had to declare it was pulling out of the programme in order to avoid automatic renewal in March 2024. Meloni has previously called the decision to join the BRI a “mistake”.

Little of the €20bn of investment in Italy, included as part of the package promised by China in 2019, has made its way into the European country – while Italian imports from China rose from €31.7bn to €57.5bn over that period.

The Chinese government reacted by saying that the country “firmly opposes smearing that damages Belt and Road cooperation.”

Good week/bad week: Spanish and Italian police joined forces to “just stop oil” this week as they mounted a raid on an international gang selling cheap, unadulterated olive oil marked as a pricier alternative.

The picture is less encouraging on UK-India trade deal talks, however, as the negotiations stall ahead of India’s elections next year. The UK government is wrestling with demands for more visas for Indian workers as well as doubts from UK whisky makers, according to Politico.

How’s stat? $10bn – that’s the value of the investment announced by four investment banks for improved infrastructure in South America this week.

The ‘Routes for South American Integration’ programme will look to improve everything from ports and airports to roads and railways.

The week in customs: The government put forward a raft of customs-simplifying measures yesterday as part of a so-called ‘Customs Day’.

Among them is the announcement of the next stage in its Modernising Authorisations project, which will include the establishment of a new customer portal for procedures including inward and outward processing next year.

The announcements also included the publication of results from customs consultations earlier this year.

There was also customs education to be had via this week’s IOE&IT webinar on changes to UK-EU trade, where experts Kevin Shakespeare and Anna Doherty spoke on the Border Target Operating Model and the EU’s Carbon Border Adjustment Mechanism.

Quote of the week: “The delay will give the sector the breathing space it needs to develop the next generation of electric vehicles [EVs] while avoiding tariffs on just the sort of vehicles consumers are being encouraged to purchase.”

IOE&IT director of EU public affairs Fergus McReynolds’ view on the EU’s decision to push back the introduction of tariffs on EVs traded between the bloc and the UK by three years.

What else we covered this week: COP28’s Trade Day looked at how trade could be used to make the transition away from fossil fuels fairer for developing nations.

China-EU relations were in the spotlight beyond Italy’s BRI withdrawal, with European Commission president, Ursula von der Leyen, and others in Beijing to voice concerns over the bloc’s €400bn trade deficit with China.

African trade news we looked at this week included calls from the Ghanaian ambassador to Vienna’s UN offices for better education on international trade law, as well as talk on improving the port infrastructure of Lagos, Nigeria’s most heavily populated city.

True facts: While the UK may soon be looking to limit export of animals with its upcoming Animal Welfare Bill, the US is bracing for a smart, furry, unsought-for import: the ‘super pig’.

The “ecological train-wreck”, purportedly a cross breed of the rugged Eurasian boar and Canada’s considerably sized domestic swine, threatens disease and disruption to northern US states as it crosses the Canadian border. With local animals said to be at risk, who will save their bacon?