GHY Tradelines

(MercoPress)

French President François Hollande called on the Euro zone on Tuesday to develop an exchange rate policy to help protect the common currency from “irrational movements”. His comments came amid growing concern that the Euro, now trading around 1.35 to the U.S. dollar, is too strong and could undermine the country’s exporters and hence wider economic growth.

Hollande said that competitiveness reforms under way in many Euro-zone countries including France risked being undermined by the Euro exchange rate with key trading partners, but he stopped short of calling for exchange rate targets.

“Europe… is leaving the Euro vulnerable to irrational movements in one direction or the other,” he said in his first speech as president to the European Parliament in Strasbourg. “A monetary zone must have an exchange rate policy or else it ends up being subjected to an exchange rate that does not match the true state of its economy.” Read more here.
 

(Reuters)

The European Commission has proposed an unusual country-wide duty on all U.S. producers of bioethanol after a 14-month investigation into complaints that exporters used state subsidies to sell the fuel to Europe at illegally low prices.

The European Union’s executive body proposed definitive anti-dumping duties of 9.5% on all bioethanol coming from the United States, according to the proposal document seen by Reuters on Tuesday. Read more here.
 

(Rebecca Lindell – Global News)

The new year brings new pressure for the Harper government to finalize a free trade agreement with the European Union as the economic powerhouse eyes a similar deal with the United States.

Canadian and European officials have been trying to hammer out a comprehensive economic trade agreement (CETA) since 2009 – talks Ottawa hoped would be concluded by 2012. Instead they may be in a race against time in 2013 as they try and ink a deal before the European Union gets distracted by possible free trade negotiations with the United States.

The Europeans and their American counterparts have been working on guidelines for free trade talks and negotiations could start at some point in 2013.

“When that happens that will consume the EU in terms of their focus,” said John Weekes, a senior business advisor at Bennett Jones and former chief negotiator for the North American Free Trade Agreement. “If they haven’t been able by that time to complete a deal with Canada, I think they would be inclined to put it to the side.” Read more here.
 

(Sneh Duggal – Embassy Magazine)

No date for the summit yet: EU official; partnership agreement also in works.

Relatively few issues remain within the Canada-European free trade talks, and officials expect the deal to be completed by the summer, European representatives say.

“The negotiations are still going on, but they are really getting down to details that need to be solved, and simply going on with a very good dynamic,” said Tomás Dupla del Moral, director for the Americas for the European External Action Service, during a visit to Ottawa last week.

There has been widespread speculation on when the deal will be completed, with some reports saying that it could be finished by February or March.

“There is a joint [will], together with the Canadians, to wrap this up this year, ideally before the summer break, but not weeks,” said Matthias Brinkmann, ambassador of the EU to Canada. Read more here.
 

(MercoPress)

The United States and European Union agreed on Monday to develop a plan to capitalize on already strong economic ties to create more jobs and fuel economic growth on both sides of the Atlantic.

“We must intensify our efforts to realize the untapped potential of transatlantic economic co-operation to generate new opportunities for jobs and growth, particularly in emerging sectors,” the two sides said in a joint statement.

“We are committed to making the EU-US trade and investment relationship – already the largest and most integrated in the world – stronger” they said after a White House meeting between President Barack Obama and European Commission President Jose Manuel Barroso and EU Council President Herman Van Rompuy. Read more here.
 

(The Economist)

One cause for relief in the financial crisis is that, unlike in 1930s, the world has avoided a destructive protectionist war. The European Union has played its part by enforcing internal competition rules and promoting a multitude of free-trade deals. Last year it signed a pact with South Korea removing duties from most goods. It has just initialled a deal with Colombia and Peru. In theory at least, big trade accords are in the works with India, the Mercosur group, Canada, Malaysia and Singapore.

So the future of free trade is assured? Not quite. The battle in Europe between free traders (mostly in the north) and protectionists (mostly in the south) never ceases. One test will be the EU’s revision of trade concessions for developing countries known as the generalised system of preferences (GSP). The EU boasts that this is the world’s largest set of unilateral trade privileges for poor countries. It cuts or scraps tariffs on most products, helping 176 countries and territories. But the word is that next month the European Commission will propose halving this number. The cull could include such big exporters as Brazil, now seen as a competitor; oil- and gas-rich countries like Russia and Saudi Arabia that still get special treatment; better-off African countries, including South Africa; and the dependencies of rich countries, for instance Guam (America) and the Falklands (Britain). Read more here.

(New York Times – Suzanne Daley and Stephen Castle)

In 2001, an agricultural co-op here [Zaragoza, Spain] was supplying truckloads of wheat to an Italian pasta maker. At first, no one at the Spanish co-op, Arento, was much alarmed when the pasta factory in Milan fell behind in its payments.

The co-op did not cut off the credit until the pasta company owed €1 million, or more than $1.4 million today, never realizing how hard it might be to collect a debt in another country in the European Union. But now, a decade later, having spent years in the courts and tens of thousands of euros on legal bills, Arento has recovered only half of what was owed.

“We came face to face with the Italian legal system,” said Luis Navarro Olivares, Arento’s director general. “The trips to Milan were Kafkaesque. Really, Italy is too far away on a cultural level, a legal level and an administrative level.”

In theory, the European Union is one gigantic economic zone of about 500 million consumers all integrated into the world’s biggest trading bloc. But the ideal is still far ahead of the reality, particularly for businesses that end up trying to collect debts across the Union’s many borders. There are still 27 different national legal systems at work in the bloc, each with its own procedures for handling claims, property attachment and bankruptcies.

European officials say at least €55 billion a year in debt is simply being written off, much of it because businesses find it too daunting to press expensive, confusing lawsuits in foreign countries. Read more here.

(CTV News – Neil Reynolds, The Globe and Mail)

In its “draft final report” on the social, environmental and economic consequences of a free-trade agreement with Canada, a European Union-commissioned panel of trade experts has calculated that the economic gains would be only half as large as economists imagined when negotiations began in 2008.

This abrupt correction induced the Council of Canadians to accuse Prime Minister Stephen Harper of selling out the Canadian economy – in the midst of a federal election – “for a measly $6-billion,” half the previously anticipated gain in GDP. But this measly $6-billion would be gained almost effortlessly every year, expanding Canada’s real GDP (for example) by $60-billion every decade. Measly, indeed.

Indeed, as calculated by the EU panel, the trade agreement would boost GDP only marginally: perhaps by 0.29%, perhaps – best case – by 0.36%. For the moment, let’s assume 0.3%. With Canadian GDP at $1.3-trillion, this would mean an annual GDP gain of $4.9-billion. For the EU, with its larger GDP, the panel put the gain at one-tenth of that percentage: 0.03. This means that, in dollar terms, the Canadian and European gains in GDP would precisely match: 0.03% of the EU’s $16.4-trillion GDP is precisely $4.9-billion. Read more here.

(Lexology – Erik de Bie, Greenberg Traurig LLP)

The Modernized Customs Code of the EU provides importers the option to be authorized to declare and pay customs duties to local customs authorities in the country in which they are established, irrespective of where the goods enter the EU and their final destination within the EU. This regime is referred to as “Centralized Customs Clearance.” The related customs formalities and implications are well described, and the EU customs authorities are increasingly familiar with this important development.

However, when exploring options to implement the Centralized Customs Clearance options, importers are confronted with the fact that the VAT legislation is not in line with this centralized customs regime. From a VAT point of view, importers must still think “Member State by Member State” rather than cross-border and centralized. The European Commission is studying which options are available to overcome this VAT problem, which is why it consulted with EU businesses to learn more about the options and preferences. The outcome of this consultation process was recently published. Read more here.

(Vancouver Sun – Pete Harrison, Reuters)

The Canadian government has stepped up lobbying in Europe for its highly-polluting tar sands industry, repeating its threats of trade conflict, a leaked letter shows.

The letter dated March 18 to Europe’s commissioners for climate, trade and energy follows Canada’s denial it threatened to scrap a free trade deal unless the European Union alters planned environmental laws.

“Given the desire for freer trade between us, it is important that our individual efforts to address climate change do not lead to the creation of unnecessary barriers,” Canadian trade official Mark Richardson said in a document sent with the letter. “The Government of Canada believes this approach raises the prospect of unjustified discrimination and is not supported by the science.”

The dispute centres around EU plans to make fuel suppliers reduce the carbon footprint of fuels by 6% over the next decade. The EU is now fine-tuning a ranking of fuels to help suppliers identify the most carbon-intensive imports. Read more here.

(The Art Newspaper – Pierre Valentin)

The fact that the European Commission can, without any public consultation or publicity, overrule the decision of two national tribunals, makes a mockery of the judicial process.

On 11 August 2010, the European Commission decided that a video installation should be classified as “DVD players and projectors”, and a light installation as “light fittings” when imported into the European Union.

The two works, Hall of Whispers, 1995, by Bill Viola and Six Alternating Cool White/Warm White Fluorescent Lights Vertical and Centred, 1973, by Dan Flavin, had been the subject of a dispute between Haunch of Venison, the contemporary art gallery, and the UK’s HM Revenue & Customs (HMRC) in 2006. HMRC had sought to classify these installations not as works of art but as projectors and light fittings. This meant that instead of applying the reduced rate of value added tax of 5%, it applied the then standard rate of 17.5%, and customs duty of 3.7%. Extraordinarily, it sought to apply these taxes not on the value of the components but on the market value of the works.

The dispute over Hall of Whispers was eventually superseded by a dispute over six other works by Viola, which eventually went before a VAT tribunal in London. In its judgment in December 2008 it decided that Viola’s and Flavin’s installations were sculptures and should have been taxed at the reduced rate of VAT and not attracted customs duty. HMRC did not appeal the decision. There the matter should have rested. Read more here.

(FoodQuality.com – Rory Harrington)

Europe’s food import controls are fit for purpose but their fragmented and complicated nature means they are inconsistently applied across the economic bloc, according to a report from the European Commission (EC).

The body called for the streamlining of the complex framework governing scrutiny of food, animal feed, animals and plants, with a more “holistic” approach to provide greater coherence. Improvements to legislation and safety tools such as the Rapid Alert System for Food and Feed (RASFF), as well as the better allocation of resources were also vital to boost the efficacy of the structure.

But the EC stressed that while it had highlighted ways to improve import control methods, the current system was “effective” in ensuring consistent scrutiny across the EU’s 27 member states. Its proposals should be viewed as enhancements rather that a call to overall the system, it said.

The European Union (EU) is the world’s largest importer of food and animal feed with imports of €85 billion for the period 2007-2009. Described as “pivotal to EU prosperity”, the food sector is the bloc’s largest manufacturing sector with a global annual turnover reaching €900bn, said the EC. Food safety controls for the region are enshrined in the General Food Law (Regulation EC No 178/2002) and the complementary Official Food and Feed Control Regulations (EC 884/2004). Read more here.

(Reuters – Louise Egan)

Canada and the European Union pledged on Wednesday to push ahead with comprehensive trade negotiations, but declined to comment on how they planned to resolve the most sensitive issue still on the table.

Canadian Trade Minister Peter Van Loan and European Union Trade Commissioner Karel De Gucht agreed in a “stock-taking exercise” that, after five rounds of talks, there was enough common ground to justify continuing, with the next round set for January in Brussels. Read more here.

(International Freighting Weekly – Damian Brett)

Lines impose a fee for every bill of lading to cover extra costs

Shipping lines have unveiled a number of surcharges related to new EU Customs’ regulations.

As a result of new EU regulations requiring cargo information 24 hours before shipment, CMA CGM is introducing a Customs Documentation Charge of US$25 per bill of lading for containerised traffic, while Maersk Line will introduce a $25 per bill of lading Cargo Data Declaration Fee.

European feeder operator Unifeeder said it would add a charge of €23 ($30) per bill of lading.

The charges will be effective from 1 January 2011 and apply to all shipments with a discharge port in a country implementing EU customs rules. Read more here.

(eGov Monitor – European Commission)

EU Trade Commissioner Karel De Gucht will travel to Canada and the United States from 14 – 17 December 2010. In Canada, he will meet his counterpart Peter Van Loan to discuss progress on the EU-Canada Comprehensive Economic and Trade Agreement (CETA).

Commissioner De Gucht will then travel on to the United States where, on 17 December, he will co-chair the Transatlantic Economic Council (TEC), together with U.S. Deputy National Security Advisor Michael Froman. The TEC will bring together a number of European Commissioners and U.S. Government representatives to strengthen EU-U.S. economic strategic and regulatory cooperation. Commissioner De Gucht will also meet his U.S. counterpart, Trade Representative Ron Kirk, to discuss progress in international trade talks in the context of the Doha Development Agenda.

“I am looking forward to my visit to Canada and the United States to help advance transatlantic economic cooperation”, said Commissioner De Gucht. “Our ultimate objective is to strengthen our economies for the competitive challenges of the future and both the Transatlantic Economic Council and the EU-Canada Comprehensive Economic and Trade Agreement will help us with this. The EU-U.S. Summit in Lisbon in November has assigned the important task to the Transatlantic Economic Council to boost growth and jobs on both sides of the Atlantic. We will make a significant step in that direction at this meeting. And I hope we can conclude the EU-Canada Comprehensive Economic and Trade Agreement already in 2011.”

(Supply & Demand Chain Executive – Stefan Busselot, Descartes Systems Group)

New customs manifest filing requirements in the European Union will pose new challenges
for carriers … and shippers, too

As global supply chains grow in complexity, regulatory and customs authorities are becoming more ambitious in implementing electronic customs filing processes to improve security and speed processes. While many of these filing requirements have similarities, additional complexities need to be considered when crossing multiple jurisdictional boundaries – an especially challenging issue when dealing with European Union (EU) compliance demands.

As with other regions, the EU is introducing customs compliance regulations to standardize and automate its customs filings process. As the world’s most important exporter and second most important importer, according to a 2008 EU Commission report, the EU’s efforts to address the security and automation of trade shipments through electronic customs initiatives will have a significant impact on exporters and importers across the global supply chain.

Specifically, as of January 1, the EU’s Import Control System (ICS) and Export Control System (ECS) customs manifest filing processes and requirements take effect. The burden of supplying advanced shipment information for products en route to the EU, or going to other destinations via the EU, will now rest with the carriers. This transition presents process change requirements for non-EU exporters and carriers alike. Read more here.

(Minister of International Trade)

Advisory Board to prepare plan on how Canadian businesses can capitalize on trade agreement

The Honourable Peter Van Loan, Minister of International Trade, today [Wednesday] asked Foreign Affairs and International Trade Canada’s Small and Medium-Sized Enterprises Advisory Board to prepare a plan on how small and medium-sized enterprises can take advantage of a comprehensive economic partnership between Canada and the European Union. The Minister made the request during his twice-yearly round-table meeting with the Board.

“Our government continues to open new markets for Canadian workers and businesses,” said Minister Van Loan. “I’ve enlisted the Small and Medium-Sized Enterprises Advisory Board to prepare a plan on how small and medium-sized businesses can tap into the opportunities that freer trade with the European Union would offer.”

Negotiations with the European Union are Canada’s top trade initiative. Canada and the European Union have held five successful rounds of negotiations, making significant progress toward an agreement. The negotiations aim to create real access to the European Union market for Canadian business by eliminating tariffs, improving regulatory cooperation and facilitating travel for business people, as well as addressing other issues. Small and medium-sized enterprises in particular will benefit from simpler, more transparent trading rules that will facilitate entry into the EU market.

The Small and Medium-Sized Enterprise Advisory Board is expected to present its plan at its next meeting with Minister Van Loan.

The Board is made up of business owners and executives representing various sectors and regions across Canada. The Board was created in 2001 to provide advice to the minister on issues that affect small and medium-sized enterprises and their involvement in international trade.
In the last four years, the government has negotiated new trade agreements with eight countries, is in negotiation with close to 50 others and is now expanding the three first-generation agreements signed before 2006.

For more information, please visit Canada-European Union: Comprehensive Economic and Trade Agreement Negotiations,

(Export Development Canada – Peter G. Hall)

International trade has been the punching bag of the global recession. Accustomed for years to leading global growth, trade fell by 11% in 2009 as the global economy shrank 0.6%. A partial revival occurred in the 6-month growth spurt that began last fall, but renewed slowdown has analysts wondering whether this economic episode is a permanent setback for trade and the process of globalization. Is the future of international trade in doubt?

Governments don’t seem to think so. One by one, they have embarked on export-centred growth strategies. The U.S. aims to double exports in five years. British foreign offices are promoting UK goods and services around the globe. A newly-elected government is flogging Japan Inc. Others, equally aware of the limitations of their own domestic economies, also see exports as a solution. […]

Western Europe is not only paying attention to its own trade, but is increasingly playing a role in facilitating regional trade. Canadian exporters are active in the Zone – it accounts for roughly 9% of Canadian merchandise exports, and between 2000 and 2008, they grew by 7.6% annually. Moreover, a substantial share of Canadian foreign direct investment is in Europe. Canadian exporters are increasingly conducting regional business in the zone’s blossoming trade centres.

Read more and/or watch the video here.

(Agriculture & Agri-Foods Canada)

Canadian beef producers will now have duty free access to the European Union market; access which is estimated to be worth more than $10 million annually for Canada. Agriculture Minister Gerry Ritz and Minister of International Trade Peter Van Loan made the announcement [Tuesday] after successfully completing extensive negotiations between Canada and European Union (EU).

“Industry and Government have been working very hard to get increased access to the EU market,” said Minister Ritz. “The access to this quota was a priority for our industry and therefore it was a priority for this Government. This is a tremendous deal that will help Canadian producers make their living from the market place.”

The arrangement will provide duty-free access to a 20,000-tonne quota for beef exports to the European market and the Canadian Beef Export Federation estimates this new duty-free access could be worth more than $10 million a year for Canada.

“Our government continues to open important markets, like the European Union, for Canadian businesses and workers,” said Minister Van Loan. “Canadians compete with the best in the world. Expanding beef access to the European Union shows our government’s continuing support for their efforts in global markets.”

The Government of Canada has also just finalized a Memorandum of Understanding (MOU) with the European Commission, which sets the path towards the resolution of the long-standing WTO dispute between Canada and the EU on beef hormones. This understanding will ultimately add 3,200 tonnes to the current 20,000-tonne quota and provides compensation for the EU’s ban on beef from animals administered growth hormones.

Under the terms of this MOU, Canadian access to this most-favoured nation quota is for beef from animals not administered growth hormones that comply with the relevant EU import requirements. Beef from animals treated with growth hormones is approved for use in Canada.

The Canadian beef industry is able and willing to immediately meet the lucrative EU market demand for hormone-free beef.

(Europolitics – Chiade O’Shea)

The European Union has expressed concerns that its trading partners are using too many restrictive commercial measures, posing a threat to a speedy recovery from the financial and economic crisis. Trade Commissioner Karel De Gucht on 25 October called for an end to the practice.

“With the economic recovery still fragile, the world’s major economies must remove the trade restrictive measures that put a break on growth,” De Gucht said as he published a new report detailing the extent of these tariff and non-tariff barriers. The report, which De Gucht says is an important tool to monitor rises in protectionism, lays out over 300 restrictive trade measures taken by the European Union’s 30 top trade partners in the two years since the crisis began in 2008. They included so-called ‘classical trade barriers’ like import bans and tariff increases, but also the now infamous ‘non-tariff barriers’ such internal incentives to “buy national”. Read the complete report here.