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UK consults on new Global Tariff Policy

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UK consults on new Global Tariff Policy. Image: Pixabay
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Now that UK has left the EU, the Government is free to make its mark as a champion of free trade, safeguard against the forces of protectionism on the rise across the world, and crucially ensure that our tariff strategy is best for businesses and consumers across the UK.

As part of our new approach, the Government is developing a new UK Most Favoured Nation (MFN) tariff schedule which will enter into force on 1st January 2021.

This bespoke regime, known as the UK Global Tariff, will ensure UK businesses compete on fair terms with the rest of the world whilst benefitting households through greater choice and lower prices. Ultimately, this will also help to make it easier to trade, drive up investment, and deliver more quality jobs across the UK.

The consultation will be open online for four weeks from today, closing on 5 March, and all views will be taken into account before the Global Tariff Policy in finalised.

Goods coming into the UK will no longer be subject to the EU’s Common External Tariff as they have been for nearly 50 years, with the UK’s new Global Tariff Policy coming into effect on 1 January 2021 for imports from any country the UK does not have a free trade agreement with. This comes as the Government sets out details of the UK’s approach to negotiating free trade agreements with countries including the US, Australia, New Zealand and Japan.

As part of the consultation, the government is seeking views on:

  • simplifying and tailoring the tariff to suit UK businesses and households, such as removing tariffs of less than 2.5% and rounding tariffs down to the nearest 2.5%, 5% or 10% band;
  • removing tariffs on key inputs to production which could reduce costs for UK manufacturers; and
  • removing tariffs where the UK has zero or limited domestic production which could help to lower prices for consumers.

International Trade Secretary Liz Truss said:

The UK has left the EU and it is time for us to look forward to our future as an independent, global champion of free trade.

It is vitally important that we now move away from complex tariff schedule imposed on us by the European Union.

High tariffs impinge on businesses and raise costs for consumers. This is our opportunity to set our own tariff strategy that is right for UK consumers and businesses across our country.

I am calling on people, businesses and civil society groups to seize this opportunity to take part in our consultation and tell us what would work best for them.

Deputy Director- General at CBI, Josh Hardie said:

Business welcomes the launch of this consultation as an essential step to making the UK’s trade policy a success. Government should develop a comprehensive tariff strategy that reflects the needs of all sectors of the economy and balances the interests of consumers and producers across the whole of the UK. The CBI will be working closely with members to ensure that the business voice is heard.

The new UK Global Tariff Policy will apply to goods from countries around the world unless the UK has different arrangements in place, for example under a free trade agreement, or a tariff suspension applies. Tariffs levied by other countries on UK exports will depend on that country’s own MFN tariff schedule and whether the UK has a trade agreement in place with them.

The UK will allow imports from countries that UK has a free trade agreement or other arrangement with, and with the world’s poorest countries continuing to access the UK at lower tariffs as set out in those agreements.

In line with the Northern Ireland protocol, special arrangements will apply to goods entering Northern Ireland.

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Prioritise logistics or risk supply chain chaos, FTA tells UK Brexit negotiators

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Prioritise logistics or risk supply chain chaos, FTA tells UK Brexit negotiators. Image: Pixabay
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If the UK is to continue to trade efficiently with the EU, its biggest and closest market, there are six key areas the UK’s negotiators and government need to prioritise in the opening stages of talks with Europe about their future trading relationship, according to FTA, the business organisation which represents the logistics industry.

As Elizabeth de Jong, FTA’s Policy Director, explains, failure by the UK government to prioritise the key areas outlined in FTA’s new policy blueprint, “Keeping the UK and the EU Trading”, could have a devastating effect on the UK’s highly interconnected supply chain, as well as creating a knock-on effect that will hamper the UK PLC’s future productivity and the country’s economy as a whole:

“While the UK is setting out its parameters for the future relationship with the EU in Brussels, it is vital that the needs of the logistics industry are front and centre of any conversations,” she says.  “UK PLC is reliant upon a highly complex, interconnected supply chain, and if the needs of those responsible for moving goods and services to support the country’s economy are not prioritised, the effects could be devastating for the supply of vital products to shops, schools, hospitals and manufacturing.  Delays to deliveries could well cause out of stock issues and shut down factories operating “just in time” production.  The logistics industry needs to be engaged from the start.

“The risk of disruption at the borders must be mitigated to ensure that businesses can continue to operate efficiently and effectively,” she continues.  “It costs more than £1 a minute to operate an HGV – so lengthy delays at the border could add significant costs to the price of goods, driving up prices and fuelling inflation.

“Trade facilitation measures are needed to reduce the impact of additional border requirements and red tape and help reduce the threat of delays and added costs.  There are a number of simplifications and agreements we are pressing negotiators to deliver which could mitigate many of these threats for our industry and our economy. The need for physical checks should be reduced and any which are required should be take place away from the border.

“Logistics needs to know now what procedures and processes will be used to cross borders, to have time to test and feedback on proposals, and then time to install and train staff. The detail our members need is not available. Complex new systems cannot be delivered overnight without interruptions to the existing supply chain, even with the best will in the world.

“There is a substantial customs agent shortage and member states and the UK government need to urgently address this by giving support, guidance and funding.  Sufficient co-funded training should be provided for those new to completing customs declarations, as well as for those handling a significant increase in declarations and other new administrative requirements.

Speaking on behalf of FTA’s membership, Ms de Jong confirmed that there are other key arrangements which must be clarified if all modes of transport are to continue to cross the UK’s borders effectively:  “Existing arrangements for road, air, sea and rail connectivity must be formally agreed soon or the impact on the availability of goods our society and the economy relies upon will be catastrophic.  And to support this, the ability of UK workers to cross borders easily must be protected – goods cannot move without a human interaction, leaving vehicles stranded at borders if extensive immigration checks are carried out.

“Logistics is a massive sector that’s vital to UK PLC, directly impacting the lives of more than seven million people employed in the making, selling and moving of goods. It is a flexible, highly adaptable industry, which stands ready to support the government as the UK moves towards a new economic relationship with the EU. But government needs to prioritise the needs of logistics in the first round of negotiations, so that we have time to adopt and adapt to the future arrangements to keep Britain and the EU trading after the transition period. December is only a few months away, and we need months not minutes to prepare.”

With Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc.  A champion and challenger, FTA speaks to Government with one voice on behalf of the whole sector, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers.

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EIB supports refurbishment of Port of Ystad to accommodate climate-friendly vessels

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EIB supports refurbishment of Port of Ystad to accommodate climate-friendly vessels. Image: EIB
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The European Investment Bank (EIB) has signed a SEK 445 million (EUR 41.75 m) loan agreement with the Municipality of Ystad. The port in the southern-Swedish town is a busy connection point to the Polish Port of Swinoujscie and the Danish island of Bornholm. The financing will be used to expand the quays to accommodate new, more environmentally friendly, LNG vessels of over 240 meters in length, which will start operating next year.

The project aims at increasing the capacity and upgrading the Port of Ystad facilities in order to accommodate larger ro-pax vessels. Works include the construction of two new, deeper, ferry berths at a new pier located in the outer port basin, with associated facilities in reclaimed areas located to the east of the new berths. It also consists of dredging works in the existing outer basin of the port, the construction of a new breakwater south of the existing eastern breakwater, with a new reclaimed platform for future port activities expansion and the extension of the breakwater at the western part of the port.

The project is expected to improve the climate performance of the port. Measures undertaken in this sense include the improvement of on-shore power supply for berthed vessels, and a reduction of emissions by manoeuvring vessels due to easier berthing.

“Ystad is a key connection point for tourism and transport in Sweden.” says EIB Vice President Thomas Östros. “As the climate bank of the EU, the EIB wants to provide finance to projects that seek to reduce the environmental impact of their operations, while keeping business going and stimulating sustainable growth and job creation. This project is spot on in all of those senses.”

”With this investment, Port of Ystad will soon be well prepared to further consolidate its position as the third largest ferry passenger port in Sweden.” added Björn Boström, CEO of Port of Ystad. “Now, in an even more environmentally friendly way.”

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European Shipping Week 2020 opens with the latest figures on European shipping

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European Shipping Week 2020 opens with the latest figures on European shipping. Image: Flickr/ William Murphy
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The European Shipping Week 2020 – the biggest shipping event in Brussels and the flagship event of ECSA – opened on 17th February with the release of the latest figures on European shipping by Oxford Economics.

According to the latest information from 2018, European shipping directly contributed €54 billion to the Gross Domestic Product (GDP) of the EU. Taking into account the spill over effects to other sectors of the EU economy, the total contribution stands at €149 billion.

The European shipping industry directly employs 685,000 people. In total, taking into account the effects on other sectors of the EU economy, the European shipping industry is supporting 2 million jobs.

A direct comparison with the previous 2015 figures is difficult, due to changes in methodology and data sources. However, the trends are clear. The European shipping industry, with a few exceptions, is still under severe pressure from difficult market conditions, leading to a decline of the contribution to the EU’s GDP. As a result also the number of jobs created by the European shipping industry remains under pressure.

“Shipping is and should always remain one of the most valuable assets of Europe, economically, socially and culturally. There are many opportunities as well as challenges facing the sector. Especially the continued depressed market conditions for many EU shipowners pose extra challenges for the industry that wants to decarbonise as quickly as possible and to contribute to safe and highly skilled jobs in Europe. For European shipping to stay in business, regulators have to adopt a global perspective and ensure a global level playing field,” concluded Mr Dorsman.

“The current tensions between the global trading powers, the rise of piracy in the Gulf of Guinea and the insecurity along the Gulf of Hormuz all contribute to difficult and uncertain market conditions,” commented Martin Dorsman, ECSA’s Secretary General.

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