Trade News - Sententiousness and Sensibilities

By Nicholas Booth - Just Trade News Editor

World Trade Organisation finally gets its digitals out

The International Chamber of Commerce (ICC) and the World Trade Organisation (WTO) have paid Just Trade the ultimate compliment by seeking to emulate its pioneering work in digitising customs. Following Just Trade’s example, they are creating their own digital systems for the import/export business. Their digital toolkit aims to help companies and government agencies adopt standards for the digitalisation of trade processes. The Standards Toolkit for Cross-border Paperless Trade pulls together existing digital trade standards in an overview, identifying nearly 100 of them.

Only one per cent of trade documents are digitised and a typical transaction requires the exchange of 36 documents and 240 hard copies. Many organisations that try to develop trade standards are oblivious to those that exist, due to the complex and fragmented nature of the standards landscape, according to the ICC.

The tool kit names the founding standards that govern the sharing of basic data, such as the United Nations Units of Measure standard used to quantify inventory items, and the ISO 20022 standard, which describes a common platform for the development of financial messages. It also covers master references for cross-border supply chains, such as the Electronic Business using eXtensible Markup Language, which can provide an open infrastructure that enables the global use of electronic business information. The Smart Maritime Network highlights the work of the Digital Container Shipping Association, with its standards for electronic bills of lading (eBLs), container track and trace and just-in-time (JIT) port calls. The tool kit also includes starting toolkits for various supply chain participants, from logistics operators to customs authorities.

Meanwhile, Just Trade can put instant answers in your hand.

Port of Liverpool lets 15 tons of fish rot over customs technicality

A Liverpool customs casuist has condemned 15 tons of frozen fish to rot and impoverished a collective of Devon importers, even when the cause of their doubts had been explained to them and any possible danger defused. The waste will have an environmental impact and could be ruinous to the traders involved.

Plymouth fishmonger Sole of Discretion is a collective of small inshore fishing boats. As members of the Slow Food network it aims to provide a sustainable supply chain of quality food to customers. As part of that strategy it made great efforts to offer customers wild alternatives to farmed salmon and it eventually found like-minded allies in Alaska. Sole of Discretion has been importing frozen Alaskan wild salmon since 2019.

However, recently 15 tons of frozen Alaskan wild salmon were rejected by customs officials at the Port of Liverpool, even when the minor technicality they were confused about was explained to them. Now the importers are being given the ultimatum to appeal to a Magistrates Court or accept defeat and write off a substantial investment. Since the company has already had to pay the port £5000 in rental fees and there are now 600 day backlogs in Magistrates Courts, re-capturing the fish from the port could be a pyrrhic victory.

The ruling has left the traders involved with Sole of Discretion bewildered. The previous shipment from the same processing plant and packers was rubber stamped happily by Liverpool customs officials. Packers had been given approval for import using the same details on their paperwork. But there was a technicality.

There was one box of 600 kg of industrial frozen coho salmon included in the shipment which has been held over from the previous shipment due to a of lack of space. It had been processed at the Northline floating processing barge in Alaska in 2020, which was later swept away in a storm and subsequently delisted as a processing establishment illegible for export to the UK. However, it was an approved entity at the time the fish were processed. This was factually verifiable and the evidence was presented to customs officials, but they still could not be moved to help the importer.

“We have demonstrated that the fish is legally caught, it’s traceable back the processing plant and safe for human consumption,” said Sole of Discretion spokeswoman Caroline Bennett, “destroying 15 tons of perfectly edible, legally caught wild salmon is an environmental travesty.”

However, the Port Health Authority is sticking to its decision that the shipment is non-compliant.

In other food trade news, Fraserburg-based fish importer Young's has refused to change its Russian seafood purchasing plans and said it is seeking ‘clarity’ on the implications of new whitefish tariffs. The Scottish fish processor said earlier it is 'reviewing' its supply chain, but has made no commitments to step away from the fish following Russia’s bloody invasion of Ukraine.

UK Exports to Flanders recovering after Brexit punishment but some are a struggle

UK exports to Flanders bounced back by 15.5 per cent in 2021 and are now only 5.7 below their pre-Brexit level. In the previous year exports to the region had fallen 18 per cent on 2019.

These figures were published by Flanders Investment & Trade (FIT) an organisation that aims to help UK companies trade in Belgium. The figures cover the eleven-month period between January 2021 and November 2021 showing the impact of Brexit on trade, a year on from the UK leaving the EU.

The rise in exports to Flanders could be attributed to multiple factors. The rising volumes of business going through ports in the Flanders region, namely the ‘super hub’ Ostend, could be attributed to a massive concerted effort by the Belgians to attract UK trade. FIT has assembled an impressive support network for UK traders, which was planned well before Brexit and has been executed enthusiastically.

In March FIT held a seminar for UK traders, in an attempt to demystify many of the teething problems experienced by UK traders. FIT employs 323 trade experts, with 150 colleagues based in Brussels. The outstanding point made during the Brexit, One Year On seminar was that FIT’s origins at the heart of the EC give it a superior understanding of customs clearance culture. FIT also has five offices in Flanders, employing 75 nationalities, who speak 45 languages.

Not every sector has recovered however. Textile exports from the UK to Flanders are down 26 per cent on 2019. However, goods which require highly skilled workers to produce them, such as specialist textiles for technical use and woven fabrics, are recovering their export momentum. “This is likely to be because the UK was not the country of origin for many of the textile products it used to export and, before Brexit, the UK was used as an entry point for the EU. Clothing and raw materials now enter direct from the originating country,” FIT said, in a statement.

Carpet manufacturers suffered particularly badly during the pandemic, thanks to the hospitality industry’s demise, but the sector has bounced back with exports 43.5 per cent higher than they were in 2019.

Motor manufacturers suffered a decline of 40 per cent in exports to Flanders since 2019. The car industry has been struggling to source parts for new cars so there have been fewer news cars manufactured in the UK.

“We know that it’s been challenging for UK companies, post Brexit, as we’ve actively helped many of them enter the EC,” said Astrid Geeraerts, FIT’s head of investment, “but overall we’re reassured that trade is picking up again and the special relationship we have with the UK has been retained. I believe that FIT’s proactive role in supporting UK companies has played a part.”

Now you can confidently navigate the high moral ground with online Sanctions Tracker

The war in Ukraine and the call for sanctions on Russia has exposed how nuanced the issue of governmental sanctimony can be. According to the Daily Mirror, Germany and France have continued to supply weapons to Russia. Meanwhile, the boycott of Russian oil has proved to have been rather selective by many countries, including the UK. This must be confusing for smaller importers and exporters, who are much more likely to feel the full weight of the law come down on them if they unwittingly break the law.

Any international trader - be they an importer, exporter or haulier - will be faced with a blizzard of regulations as they attempt to navigate the world. Manufacturers, distributors and small businesses may be aware that there are global sanctions arising from the Russia Ukraine crisis, the Institute of Export & International Trade (IOE&IT) has warned. These are constantly changing. These are also the ‘known unknowns’ - there are plenty more conflicts in the world.

In order to solve this problem, the IOE&IT and Coriolis Technologies have partnered to launch an online sanctions tracker. The aim is to clarify the trading restrictions imposed on Russia, and Belarus in the last few weeks.

Coriolis normally specialises in environment, social and governance (ESG) issues. Chief executive Dr Rebecca Harding explained why she is diverting resources from the development of her ESG tracking tool to build something reactive that can help small businesses to ‘navigate in a rapidly changing landscape’. “The real-time sanctions tracker will allow them to identify sanctions that will impact their world quickly,” said Harding.

The free tool covers US, EU and UK sanctions against companies and individuals, dual-use goods and specifically sanctioned goods. It aggregates data directly from a range of global government sources, including UN, EU and UK dual-use goods lists, the UN, US and EU Consolidated Screening Lists and US Sanctions List (OFAC) then presents the intelligence in a searchable database. “It is imperative in times like these that traders have access to the right information, advice and guidance, to ensure that they comply with sanctions wherever they are in the world,” said IOT&IT director general, Marco Forgione, “getting information on which sanctions will impact them will help keep legal trade flowing.”

Brazil could be an agri-tch import option

The government is working to strengthen UK-Brazil trade ties, Defra’s Head of Environmental Land Management, Gavin Ross, has told Farmer’s Guardian.

Ross drew parallels between the ‘great progress being made in Brazil to recover 90 million hectares of degraded pasture’ and the UK’s shift to paying farmers for public goods. Brazil is looking for changes to the UK laws banning imported hormone treated beef, its government spokesman said.

In 2019, Brazil opened the market for UK fish exports with restrictions lifting for exports of poultry, live poultry and poultry genetics, and genetic material for pigs and ovine.

“We trust the UK has also much to gain from trade with Brazil. Currently, the UK imports half of the food and beverage it consumes. It can import it from the EU or from other rich countries, or it can import it from a developing country, like Brazil,” said the spokesman.

The Brazilian Government has never subsidised agricultural production in any meaningful way and has relied on investment in research and innovation to develop technologies suited to its unique own soil and climate conditions. This has allowed it to increase yields, while saving land and inputs. “The main lesson to be learned is that, in agricultural sustainability, technology is a powerful ally,” said the spokesman.

Brazil practices no-till, integrated crop-livestock-forest production systems, agroforestry, biological nitrogen fixation, animal waste treatment and forest planting to reduce emissions, to reduce the strain on natural resources and boost biodiversity.

The official also added there was room for the UK to be more ambitious in its policy on biofuels. Currently, ethanol accounts for 46 per cent of all fuel utilised in transport in Brazil. The majority of Brazilian automobiles are flex-fuel, meaning that they can run either on petrol, which contains 27 per cent ethanol or ethanol (E100), which can be mixed at any rate in the car’s tank.

“From a net-food importer in the 1970s, Brazil has become one of the world’s leading agricultural exporters thanks to heavy investments in technology and innovation," said the government spokesman.

Two thirds of Brazilian territory is covered with native vegetation, an area 23 times the size of the UK, compared to 2 per cent of UK territory.

“Brazil’s environment legislation is arguably the strictest in the world,” the official said, adding Brazilian farmers preserved 218mha of land at their own expense with 80 per cent of every private property in the Amazon required to be kept with forest or other native vegetation.

Meanwhile, as the war in Ukraine continues, many UK and Europeans buyers are struggling to find alternative sources of gas. Africa offers an obvious alternative supply with countries such as Algeria, Niger, Nigeria, Libya and Egypt among a growing group of African states with large supplies of liquified natural gas. They are reportedly looking for financing and routes across the Sahara and into Europe.

UKEF guarantees €2.1 billion loan to Turkish rail project contracts for UK firms

Government funding body UK Export Finance (UKF) is underwriting a two-billion euro railway building programme in Turkey which could clinch some export contracts for UK companies.

The deal was announced following a UK-Türkiye Green Finance Conference in March which was designed to help Turkey finance major climate-friendly projects and meet its COP26 commitments.

It will be the biggest ever sustainable, civil infrastructure deal supported by the British taxpayer and will help finance a new high speed electric railway line in Turkey which aims to decarbonise travel.

Though ‘decarbonising travel’ is contentious, the good news is that major contracts will be awarded to British and Turkish businesses, according to UKEF, which is guaranteeing the €2.1 billion green financing through its Buyer Credit Scheme. Credit Suisse and Standard Chartered are structuring the deal and coordinating banks arranging the transaction.

The new 503km electric-powered railway line will connect Ankara, Turkey’s capital, to the huge port of Izmir. This will be a faster, lower carbon alternative to current air and road routes between the two cities, helping Turkey to fulfil the climate change commitments it made at COP26. This is the first UK-supported rail transaction in Turkey for over 160 years.

According to UKEF the deal will secure major contracts for all kinds of UK companies that can supply the project. Several nine-figure deals for UK companies are ‘close to being agreed’. Engineering and construction giants ERG International Group is using its close ties with the UK supply chain to support the project. UK companies are expected to supply British-made railway lines, turnouts, point machines, fasteners, material and equipment for signalling, telecoms and electrification systems, as well as vital insurance and freight services.

According to Transparency International’s Corruption Perceptions Index of 2021, Turkey is ranked 96th out of 180 countries in the relative degrees of corruption. The study found that eight per cent of public service users paid a bribe in the previous 12 months.

ERG’s Turkish and UK based environmental and social teams will bring many years of international experience to this important project, according to Murat Dedeoglu, CEO of ERG International UK. “ERG looks forward to strengthening ties with UKEF and the Turkish Government in the construction sector. We would like to thank all our partners and stakeholders in the UK, Europe and Turkey to make this dream project come true.”

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