Just Trade Newsletter - 18th May 2022

Good news and bad news from Northern Ireland, horrific mink markets and traffic new deals

Northern Irish start-up wins £4m export contract for circular economy

Eoin Heron started a business just as the global economy tanked during the Covid chaos of March 2022. Luckily, the value of the newly formed Circular Group is in ‘making do,’ its efficiencies benefit society by repurposing construction waste, creating sand and aggregates for commercial use. Demand for creative system designers like Circular Group (CG) is booming in the emerging ‘circular economy.’

CG’s ‘wet processing’ method of treating trade rubble produces commercial grade sand from construction waste, which saves millions of tons of this precious resource.

When it was offered the chance to tender for a £4 million contract, its invention and its use of advanced technology should have put CG in pole position. However, the creative upstart was up against three established companies, and these seasoned campaigners could use every trick in the book to sow the seeds of doubt about an opponent. Financial security is always a good issue to raise when casting aspersion on newcomers.

As part of the tender process the potential client wanted advance payment guarantees to form part of the purchase contract. As a young company a credit record was harder to establish for Heron’s company. So CG asked the bank, HSBC and the government body UK Export Finance (UKF) for support. Despite its limited trading history CG was backed by the bank with a £2.1 million support package, having been persuaded by a commitment from the UKEF’s General Export Facility (GEF). The payment guarantees were put in place and, after all the technical merits of each bid were considered, CG clinched the contract.

The ecological benefits of recycling building materials are persuasive enough on their own. Sand is the world’s second most-used raw material after water, with 40 billion tonnes being extracted and used each year by the world’s construction companies. This has a major impact on rivers, as well as coastal and marine ecosystems.

The Circular Group is now looking to new global export markets and expects the export portion of its revenue to grow to 75% in the next 36 months. It could expand into North America, Europe and Asia and create extra jobs in Northern Ireland and key export markets.

Creatives like Circular Group are crucial in protecting our planets natural reserves for future generations, said Liz McCrory, UKEF Export Finance Manager for Northern Ireland.

“The support from UKEF and the GEF facility has been a genuine game-changer, ensuring we could be a serious contender for a major project,” said Eoin Heron, co-owner of Circular Group.

US to make a special intervention on Northern Ireland protocol and trade agreements

A congress of US politicians is to intervene in negotiations over the Northern Ireland Protocol. The Guardian reported th at six politicians including Richie Neal, chair of the Ways and Means Committee , are on the way to Northern Ireland and their influence over trade deals can be significant. With mid-term elections looming in the US the ‘old country’ is a folksy campaign platform.

Neal, an Irish-American politician, has called on political leaders in Northern Ireland to re-establish a government and carry out power-sharing ‘institutions’, which he claimed were ‘established’ by the Good Friday Agreement. A trade deal, though “desirable”, should not put the Good Friday Agreement in jeopardy, Neal said.

British plans to override the protocol would provoke US intervention, reported The Times. Antony Blinken, the US secretary of state, has said the US needs its own envoy on the ground in Northern Ireland. However, some claim the chief tax-writing committee of the United States House of Representatives hasn’t got a great record of improving the welfare of its own citizens.

Former Brexit minister Lord Frost has used a visited the US to urge politicians there to keep out of the spat, Politico said. President Biden does not understand Northern Ireland’s niceties, he told the Heritage Foundation in Washington.

“We don’t need lectures about the peace process,” said Frost, who made the point that it’s “unreasonable and unfair” for Washington to refuse a trade deal with the UK until the protocol issue is solved. Former Bank of England MPC member Andrew Posen told in a City of London conference that a US-UK trade deal is never going to happen because the political wind in Washington was blowing the wrong way.

“The US Congress doesn’t want to approve any trade deals of any kind with anybody,” said Posen. Britain has made some progress in a series of ‘transatlantic dialogues’ , such as state level deals and the end of the long-running issue of tariffs UK steel exports to the US.

Scandal of Britain’s fur import trade exposed by Open Cages

Animal welfare charity Open Cages has published footage from a mink farm in Bulgaria which exports fur to Britain. Animals with open wounds mingle with dead bodies as they bid to join the cage escapers that run free in filthy conditions.

According to the Bulgarian Mink Breeders’ Association, however, this is certified by WelFur, a fur industry-run ‘welfare’ scheme. Despite this the UK Government recently abandoned its plans to include a fur import and sales ban in the Animals Abroad Bill announced in the Queen’s speech this month.

Open Cages has accused the government of reneging on its Action Plan for Animal Welfare commitment to act. Despite having banned fur farming in 2003, Britain continues to import millions of pounds worth of fur from farms overseas, including Bulgaria. Animal charities including Open Cages and Humane Society International/UK argue that this clear double standard must end. A recent opinion poll shows that 77 per cent of the British public support a ban, claims Open Cages.

Investigators made multiple visits to the farm in Madzherito throughout late 2021, where around 100,000 animals are killed every year for their fur.

“These animals must endure open wounds and unending misery all for a piece of meaningless fur: the kind that continues to be sold on the British high street,” said Jackson, CEO & Founder of Open Cages.

Claire Bass, executive director of Humane Society International, was critical of the “many warm [but meaningless] words from the UK government about Brexit benefits for animals, raising the bar on animal welfare and taking the rest of the world with us.”

As long as the UK is a part of the global fur trade, it is 100 per cent complicit in the unimaginable suffering exposed on this farm in Bulgaria and the many other fur farms where investigations show the abject misery of animals caged and killed for their fur, said Bass. According to the Bulgarian Food Safety Agency, Bulgaria breeds 120,000 mink annually. HM Revenue & Customs statistics show that from 2015-2020 inclusive, the United Kingdom imported £11,039 of fur from Bulgaria.

Mexico and Zimbabwe suspend import duties on household goods

Mexico and Zimbabwe have both announced inflation dampening measures that entice exporters into their markets with tariff fee incentives.

Mexico is to waive import duties on food for a year in a bid to curb inflation, its government said on the Diario Oficiale De La Federacion on Monday. The exemption on tax covers a range of household staples, most of which are food items but there are other export opportunities for inedible items. The products on the government list included corn oil, rice, tuna, pork, chicken, beef, onions, jalapeño peppers, beans, corn flour, wheat flour, eggs, tomatoes, milk, lemons, white corn, apples, oranges, wheat, and carrots.

Bread, potatoes, pasta for soup, sardines, sorghum, and hand soap were also listed in the decree. Duties would also be suspended on imports of live cattle, pigs, sheep, goats and chickens, the government said.

The Mexican government said the waiver on the household staples would take effect from Tuesday and be in force for a year. The waiver on livestock would enter force pending the approval of Mexico's foreign trade commission and the measures could be extended for another year, the Mexican government has said.

Meanwhile, Zimbabwe is allowing ordinary citizens with access to US dollars to import basic commodities for their own use to counter “substantial” price increases by retailers.

Finance Minister Mthuli Ncube said the government opened imports of basic commodities to citizens with immediate effect. This will be done by lowering import tariffs and “other accompanying measures,” Ncube told news site Bloomberg by email .

Annual inflation accelerated in April to 96 per cent amid a weakening of the local currency in recent weeks. The Zimbabwe dollar trades at the interbank rate, known locally as the willing-buyer willing-seller exchange rate of Z$281 per US dollar. The Zimbabwe dollar is much weaker on the parallel market, where it changes hands at Z$400 per U.S. dollar.

The government will also pay farmers 30 per cent of the producer price for corn and other grain deliveries in US dollars and the balance in local currency to encourage early delivery of the staple corn by the farmers, said Ncube. “The US dollar payment will be calculated at the prevailing willing-buyer willing-seller rate published by the Reserve Bank of Zimbabwe on the date of delivery,” said Ncube.

The southern African nation produced a record 2.72 million tons of corn from its last planting season, but the current harvest is likely to slump to 1.56 million tons, Ministry of Agriculture projections show.

New rules for Exporting to Egypt - CargoX, ACID, Nafeza & ACI

Egypt Customs Authorities have implemented two new systems for managing imports - CargoX platform (for exporters to Egypt) and NAFEZA platform (for Egyptian Importers). CargoX is a blockchain system for sharing documents and information securely between parties to the movement of goods. Nafeza is an Egyptian Single Window System setup as part of the Advance Cargo Information (ACI) System programme to improve Egyptian port processing times and domestic security vis-à-vis imports – further details from https://www.nafeza.gov.eg/en/pages/15.

This process is mandatory for Sea Freight shipments and will be mandatory for Air Freight later this year. All your documents (Invoice, Packing List, BOL, Certificate of Origin, Etc.) require an ACID number supplied by your buyer or their agent. ACID is a one-time number generated by NAFEZ to identify your shipment to Egyptian authorities. You must submit documents to CargoX as soon as goods have departed to expedite clearance on arrival for “Green” channel goods.

Lastly, if you are not already registered for CargoX, I would prioritise this as you cannot submit documents without this. And I believe your buyer cannot generate an ACID number without this.

The following has been taken from the CargoX website:

“As a foreign company located outside of Egypt, which is exporting goods to Egypt, you are not required to register on the Egyptian customs platform Nafeza. Only your buyer - an Egyptian company importing your goods needs to register and use the Nafeza platform.

Foreign exporters need to register only on the CargoX Platform. Please follow the instructions here: https://help.cargox.digital/en/user-manual/quick-start/ . An official announcement is available on the Egyptia n government customs webpage: https://www.nafeza.gov.eg/en/ .

Once you receive the ACID number from your Egyptian buyer, (which they will get from Nafeza after they register the import shipment), you will use the CargoX Platform to electronically submit the required ACI documents to Egyptian customs.

What can you do to prepare?

• Register your company on the CargoX Platform once (quick start guide) . Kindly use an internationally readable format (ASCII character set, as found in the English alphabet) when entering company details.

• Complete the verification of the company (company verification process)

• Inform your Egyptian importer, that you completed CargoX registration and share your CargoX ID number with them so that they can start the process in NAFEZA.

• If you have several co-workers in your company who all need to file ACI, add as many users account for them under your company account as needed (add user guide).

• Wait to receive an ACI notification that contains the ACID number along with other export information.

• Compose and send an ACI Envelope to Egyptian customs (ACI filing step-by-step tutorial)

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