At Multimodal yesterday (1 July), Marco Forgione, the director general of the Chartered Institute of Export & International Trade made the point that there’s rarely a dull day in international trade, and that it is a testament to the resilience and ingenuity of businesses that goods keep on moving across borders despite ongoing volatility.
To illustrate his point, he noted that the conference was taking pace against the backdrop of speculation that the US would not renew its trade pact with its North American neighbours Canada and Mexico, USMCA.
Forgione, and his co-panellist James Mills, head of trade policy at Logistics UK, also noted that there are causes for optimism, including the prospect of the UK signing a new sanitary and phytosanitary (SPS) deal with the EU to reduce checks on agrifood products.
Both USMCA and the UK-EU SPS deal feature in today’s Day in Trade digest.
EU pushes for quick SPS deal completion
The European Commission (EC) is looking to quickly finalise negotiations for the long-awaited Common SPS Area with the UK, once Sir Keir Stamer’s successor is in office.
Anonymous sources close to the talks told Politico the EC is keen to also complete talks with the UK on the linkage of emissions trading systems (ETS) and a reciprocal youth mobility scheme in the first “days and weeks” of the next UK prime minister’s tenure.
It had been hoped that deals would be announced this summer – UK and EU leaders had been due to convene on 22 July for a second annual summit, but this was postponed following Starmer’s resignation last week. The new timing is likely to be mid-October, according to Politico.
Despite the change in leadership, UK negotiators don’t expect any significant change in Labour’s ‘Brexit reset’ policy. EU relations Nick Thomas-Symonds was in Brussels yesterday to continue talks with EU Trade Commissioner Maroš Šefčovič.
“My meetings in Brussels today are focussed on delivering the deals we announced at last year's summit to lower household bills, provide opportunities for young people and strengthen our nation's security,” he said.
NI steel tariffs complexity
The talks came amid complaints from some Northern Irish manufacturers about complexity arising from how new steel tariffs and quotas, introduced by both the UK and EU, are interacting.
“As is always the case, Northern Ireland is in this messy middle, and there is no clarity,” Stephen Kelly, chief executive of Manufacturing NI, said to Politico.
Steel imports crossing the British border are subject to UK duties but can also fall under EU tariffs when entering Northern Ireland. Businesses can reclaim some EU duties through the Duty Reimbursement Scheme, but Kelly warns that businesses will still face an initial cash-flow hit as they need to pay the tariffs upfront, before meeting evidentiary requirements to secure repayment.
A government spokesperson said:
“Specific arrangements are in place to ensure smooth movement of steel to Northern Ireland from Great Britain. This is in addition to the Duty Reimbursement Scheme, and the help available to businesses through the Government’s Trader Support Service.”
Trump won’t renew UMSCA
The US Trade Representative (USTR) confirmed yesterday that the US is walking away from talks to renew USMCA on its current terms, blaming persistent trade deficits with Canada and Mexico.
The deal now continues under annual reviews rather than as a longer-term, six-year commitment. This will continue until 2036, when the deal expires.
Despite negotiating USMCA as a replacement for NAFTA in his first term, Trump has routinely criticised the pact.
“We don’t need anything that Canada has. We don’t need anything that Mexico has, but they need everything that we have, and they have to treat us better,” he told reporters yesterday.
The deal facilitates roughly US$2tr in annual trade among the three North American countries.
“Supply chains, particularly in the auto industry, depend on the agreement’s duty-free provisions, with parts crossing the US, Mexican and Canadian borders multiple times before a finished vehicle rolls off the assembly line,” according to CNN.
UK looks to enhance services trade with China
British business and trade secretary Peter Kyle is calling for an enhancement of services exports to China in a speech at the 15th UK–China Joint Economic and Trade Commission (JETCO) today at Mansion House.
“The UK is a services superpower, and I want us to turbocharge our services exports and get more British engineers, architects, and accountants exporting their skills to China,” he is expected to say.
The summit, attended by 200 British and Chinese companies, follows the prime minister’s visit to Beijing earlier this year, which “unlocked £2.2bn in new export deals and a further £2.3bn in market access wins over the next five years,” according to Kyle.
China’s commerce minister, Wang Wentao, is co-chairing the summit.
A new ‘Trade Booster’ initiative is being launched at the event, which will provide businesses with “practical and targeted support to succeed in the world’s second-largest consumer market”, according to a government statement. The scheme is being led by the China-Britain Business Council (CBBC), HSBC, ICBC and JD.com.
Also in the trade news
- The UK-US pharmaceuticals agreement, which will see the UK spend more on US drugs, will lead to the NHS needing to divert £45bn away from essential services for new medicines, which could lead to more than 200,000 avoidable deaths, according to analysis from the British Medical Journal
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) nations have agreed to commence accession talks with the Philippines – a move welcomed by the UK, itself a member
- Google has lost its appeal against a record 2018 €4.1bn fine from the EU’s antirust regulator
Yesterday in trade
- The new UK steel tariff and quota regime came into force
- The EU introduced a new charge for low value imports
- The Chartered Institute ran sessions at Multimodal on customs intermediary standards and supply chain resilience
