Just Trade Newsletter - 1st June 2022
UK’s trade deal with Australia helped Wrightbus win big export contract
UK-based manufacturer Wrightbus has won a major deal to supply its new models of hydrogen-powered bus chassis in Australia, clinching a deal to supply bus maker Volgren. The breakthrough deal comes as our new trade partner looks to replace thousands of its buses.
The government originally funded the development of hydrogen fuel cell technology at the bus maker’s HQ in Ballymena, Northern Ireland. Now it is reaping the benefits of the UK-Australia trade deal that waived tariffs on parts for the electric vehicles. This could support the creation of green jobs across the company’s entire supply chain, which stretches across 47 counties in the UK.
In March 2021, Wrightbus received £11.2 million from the UK taxpayer to develop cheaper hydrogen fuel cells. It then worked with Volgren to invent new technology for the manufacture of two bus models, which will be the first of their kind built in Australia.
It is hoped that this new deal will create more jobs at the 900 employee site and stimulate the local manufacturing supply chain. UK vehicle exports to Australia were worth £490 million in 2021.
Wrightbus CEO Buta Atwal said the firm was ‘incredibly grateful’ to the Department for International Trade (DIT) f or its support in securing the initial deal with Volgren in the Australian market. “The UK-Australia Free Trade Agreement has helped to open up the market at a significant time. Thousands of buses need to be replaced in Australia over the next decade, this deal and its potential is a fantastic opportunity for Wrightbus and the wider Northern Irish economy.”
The DIT has previously invested in a new trade and investment hub in Belfast to bring export opportunities into Northern Ireland. Wrightbus was advised about breaking into the local market by DIT’s team in Australia.
The government says the UK-Australia agreement is expected to unlock £10.4 billion of additional trade by eliminating tariffs on 100% of UK exports. “By slashing tariffs and cutting red tape we are ensuring brilliant products and services reach global markets,” said Secretary of State for International Trade Anne-Marie Trevelyan.
New tool measures ease of doing business and trading across Africa
The Economic Commission for Africa (ECA) has launched a ‘comprehensive tool’ that measures how easy, or hard, it is for companies to do business between African countries.
The AfCFTA Country Business Index (ACBI), the ECA’s first ever tool, aims to assess the perceived impact of the African Continental Free Trade Area on the ease of doing business across African borders, once the area is operational. It focuses on the constraints and challenges faced by private businesses, said Stephen Karingi, Director of the Regional Integration and Trade Division of UNECA.
Conceived in 2018 and launched in 2022, it was unveiled at the 54th session of the Economic Commission for Africa (ECA) Conference of Ministers in Dakar, Senegal. The tool tests the extent of African integration by targeting businesses either based in or trading across African countries.
UN Under-Secretary-General and Executive Secretary of the Economic Commission for Africa, Vera Songwe, hailed the ACBI as: “yet another measurement infrastructure" that will help assess the extent to which integration and trade efforts have been implemented. It aims to improve understanding of how well the free trade agreements, already in force in African countries, have aided business, said Songwe.
The Index aims to look at how easy it is for, say, a Cameroonian, to set up business in Kenya and vice versa. It will help identify bottlenecks and address issues so that the African private sector can conduct business as seamlessly in their country of origin as anywhere else on the continent.
“It is not a measure of what a particular country is doing but a measure of how easy it is for someone in one country to set up a business in another country,” said Songwe.
Trade hopes soar with Vietnamese wing and US prayer
UK trade minister Penny Mordaunt hailed the Brexit Britain spirit after her department winged its first US trade deal with the US State of Indiana and got a promise from Vietnam.
The landmark agreement with the US State of Indiana is the first of 20 potential trade deals with US states. Trade talks with Vietnam have ‘deepened’ and sources in the DIT have confirmed that commerce with the South Asian economic powerhouse is already up by 11 per cent.
It’s not yet clear what the memorandum of understanding will provide. “Our first state-level agreement of this kind is a major milestone for UK-US trade relations and I’m so excited for UK businesses, who can now start reaping the rewards of closer ties with Indiana,” said Mordaunt, “our state-level strategy is paying off and this is just the first of many agreements we’ll be signing in the future as we look to bolster our £200 billion trading relationship with the US.”
The pattern is that UK traders believe in themselves and go their own way, said Mordaunt. Britain is arguing for regulation based on adequacy and equivalence as opposed to harmonisation. “We were not the first to leave Europe. People said it couldn’t be done,” said the minister. “We were first to develop a vaccine. Then we were first to get it rolled out at scale. We were first to arm and train the Ukrainians. We have always met our commitments to NATO, even when our partners did not. We are championing trade as a force for good in the world.”
Worried about the disastrous CDS? Register with Just Trade
HMRC has confessed that just about everyone thinks it’s been slow to respond and resolve incidents raised on the Customs Declaration Service (CDS). ‘Some’ external partners and ‘others’ have told government ministers about their concerns about increasing their use of the CDS, admits HMRC. They (IT advisors) fear the consequences of migrating clients further on the disastrous CDS road until the situation is improved, said an HMRC briefing.
There are three sources of CDS incidents, according to HMRC’s latest briefing to its IT partners. These are CDS Live Services, the production environment, CDS non-IT queries and Trade Test and Trader Dress Rehearsal environment.
Given the universal loss of confidence HMRC said its ‘overall ambition’ is to reduce new incidents, meet its service level agreements for incident resolution times and to generate ‘Positive Trader/Trader Agent feedback’. These measures, along with a pledge to ‘improve release processes to deliver incident fixes’ all sound like measures taken by an organisation examining the legal loopholes through which to avoid censure. The ‘visibility of status’ of a fault is not much compensation to a freight distributor as they watch their load impounded in a port.
The May report from HMRC to External trade partners, the CDS Incident Management Overview and Assurance, does not make reassuring viewing.
According to HMRC’s own presentation, there was a slow growth in CDS declarations, totalling 160,000 in April, out of a possible total of around 8 million. In the last 3 months under seven per cent of all customs declarations were made in CDS. Out of the 1.6m declarations made so far, around a third (600,000) were rejected and new declarants to CDS (are running at just 25 new traders a month.
“So, not great news really,” said Steve Bartlett, chairman of the Association of Freight Software Suppliers (AFSS).
Anyone worried about getting ready for CDS can register with Just Trade to make their declarations.
Country Guide Update
- General - Payment method & ACI;
- Commercial Invoice - Details, Declarations, Number of Originals and Copies;
- Packing List;
- Certificate of Origin - Non-preferential & Preferential;
- Product Requirement;
- Transport Documents - Air, Bill of Lading & Postal Exports;
- Financial Details - Export controls & Import Licenses;
- Customs Procedures - Preferential trade, Duties, Preshipment Inspection (ACI).
Another massive green technology export investment, a trade deal with the Gulf and tariffs on steel could all help create more business in Britain’s industrial heartlands.
Volume of cargo booming in airports that London’s media don’t go, 50% of UK’s SME exporters say nobody yanks their supply chain and the government’s export finances are the best in the world.
UK traders have clearer passage to Indiana and Vietnam? Bring a tool when trading in Africa and a Wrightbus is heading for Australia. Help with the Customs Declarations Service?