EU trade policy is at the fore of today’s news agenda, with UK participation in its ‘Made in Europe’ scheme being hotly debated, negotiations set to begin over its upcoming steel quotas and tariffs, and the impact of changes for low value imports already being felt by UK SMEs.
In better news for UK-EU trade, regular rail freight looks set to return to the Channel Tunnel, with the government today trumpeting a deal that enhances the passageway for goods movements.
Trilogue steel talks begin
The European Commission (EC), European Parliament and Council of the EU are set to begin ‘trilogue’ negotiations on new steel safeguards designed to address global overcapacity in the sector.
The EU Trade and Economic Security Commissioner Maroš Šefčovič, representing the EC, has presented a new proposal to the council and parliament that it hopes to implement from July this year.
The proposed regulation would reduce tariff-free quotas by 47% to 18.3m tonnes per year, double out-of-quota duties to 50% and introduce a new ‘melt & pour’ requirement to “improve traceability and transparency” in the EU steel supply chain.
Covering “all origins” outside the European Economic Area (EEA), the new tariffs and quotas could affect UK steel. UK Steel director general Gareth Stace has previously called on the UK government to “go all out to leverage our trading relationship with the EU to secure UK country quotas or potentially face disaster".
France against UK participation in ‘Made in Europe’ scheme
In another potential blow for UK industry, French officials have told Politico that British firms shouldn’t automatically have access to the benefits of the EU’s proposed ‘Made in Europe’ scheme.
Under the plans, which France is drafting, European companies would be favoured in EU public tenders and subsidies. The officials said the UK shouldn’t have access to this because it left the EU single market after Brexit. “You can’t have the cake and eat it too,” one said.
The UK’s Society of Motor Manufacturers and Traders (SMMT) has described the plans as “protectionist” and the UK government is lobbying for British participation.
“The reality is that a lot of French businesses that have supply chains intertwined with the UK will be having serious chats with the French government,” a British official said.
De minimis impact
Another ‘protectionist’ EU measure impacting UK businesses trading into the continent is the removal of the bloc’s ‘de minimis’ customs duty waiver for low value goods.
While designed to curb the recent surge of cheap Chinese imports into the continent, the EU’s decision to introduce new customs and handling fees for low value imports is set to disrupt trade for many UK SMEs, particularly in the e-commerce sector.
You can read more about how British firms are responding to these changes here, and members of the Chartered Institute can also learn more about EU de minimis in tomorrow’s exclusive Lunchtime Learning webinar.
Cross-Channel rail freight to return
In better news for UK-EU trade, the British government has today announced a landmark deal which could see the return of regular rail freight to the Channel Tunnel.
The agreement sees Network Rail and its property development company Platform4 take “long-term control over the Barking Eurohub site in east London, currently owned by Legal & General (L&G), with plans for around £15m of investment to transform it into an international logistics hub”.
This investment will enable the return of regular intermodal freight trains through the Channel Tunnel and could see British businesses able to “directly import and export goods via rail to France, Germany, Italy and Spain”.
“This deal is a huge opportunity to reinvigorate rail freight by paving the way for the return of regular services through the Channel Tunnel,” said rail minister Lord Hendy.
“It will boost British businesses by opening new trade links to Europe by delivering a faster and more sustainable way to transport goods to the continent and back.”
US tariffs remain at 10% for UK – for now
US President Donald Trump gave the State of the Union address to Congress yesterday and mentioned the Supreme Court’s 6-3 ruling that found he had overstretched executive authority to impose large swathes of his ‘reciprocal’ tariff regime. Trump has since used alternative powers to introduce a blanket 10% tariff for all countries for the next 150 days, which he has threatened to raise to 15%.
“They’re a little more complex, but they’re actually probably better, leading to a solution that will be even stronger than before,” he said. “Congressional action will not be necessary.”
The new 10% tariff, that came into effect yesterday, means there is not immediate change for UK exporters, with the rate not differing, for most exports, from that which was secured in last year’s US-UK Economic Prosperity Deal (EPD).
The UK’s business and trade secretary Peter Kyle has been in contact with US trade representative, Jamieson Greer, to seek clarity from the White House and to ensure the EPD is honoured. Greer told CBS over the weekend that “we expect to stand by” the deals that the US agreed with the EU and UK last year.
Russia sanctions evasion
A report from the exiled Russian office of Transparency International has found that £5.9bn of Russian trade has been conducted through British Overseas Territories.
Practically all (95%) of the 29,000 transactions analysed by the anti-corruption group were routed through the British Virgin Islands, Bermuda, the Cayman Islands or Gibraltar. The transactions largely took place in the immediate aftermath of the first waves of sanctions that were imposed following the beginning of Putin’s illegal invasion of Ukraine.
The deals analysed included “more than 150 luxury yachts, dozens of aircraft and equipment destined for Russia’s money-spinning oil sector”, the Guardian reports.
Also in the trade news today
· Ofgem has released new figures showing that the energy price cap will fall by 7% by April – good news for the Chancellor as she prepares for a relatively ‘boring’ Spring Statement next week, though it’s one that she hopes to use to reassure businesses
· Panama has seized two key ports from Hong Kong conglomerate CK Hutchison amid ongoing US-China tensions over its eponymous canal
· The EU is ‘watering down’ its Corporate Sustainability Due Diligence rules, according to the European Coalition for Corporate Justice
Yesterday in trade
· The UK announced a landmark sanctions package to mark four years having passed since Putin’s invasion of Ukraine
· A report from Barclays urged the government to expand support provided by UK Export Finance
· The UK was in talks with the US over ensuring certainty for businesses amid the ongoing fallout from last weekend’s Supreme Court ruling on tariffs
You can yesterday’s trade news here.
