NORTHERN IRELAND ISN’T WAITING ON POST-BREXIT TRADE DEAL TO COURT U.S. INVESTORS

March 17th, 2020 Leslie Griffin Leave a comment

A Trade Agreement for the “Whole of the U.K.”

On March 2, 2020 the United Kingdom (U.K.) released its public negotiating objectives for a free trade agreement with the United States, its largest bilateral trading partner. In pursuing increased trade in goods and services and greater cross-border investment, the U.K government seeks an “agreement that works for the whole of the U.K.,” including “all four constituent nations,” and that takes account of the Northern Ireland Protocol that aims to avoid the introduction of a hard border on the island of Ireland. The United States released its objectives for talks with the U.K. in February of 2019.

Trade agreements are a valuable tool governments use to generate broad economic benefits, but negotiations can take time and outcomes are uncertain. Many governments simultaneously deploy export and investment promotion agencies to promote access to new markets for its companies or attract investments that will create jobs at home.

Usually affiliated with government, these agencies may promote the image and offerings of the home market, provide export training, offer support in identifying partners or specific business opportunities, organize trade fairs or trade missions, and conduct research and market analysis. They may be based domestically and maintain offices abroad.

The U.K. has enjoyed longstanding success in attracting inbound investment, but with uncertainties surrounding the implementation and impact of Brexit, U.K. trade and investment promotion agencies have a key role to play in promoting a thriving post-Brexit economic future. Although the U.K.’s Department for International Trade is on the front lines in providing trade and investment services, another agency — Invest Northern Ireland (Invest NI) — is specifically focused on making sure benefits accrue to Northern Ireland.

Banking on Belfast

Formed in Belfast in 2002 through a consolidation of the departments of trade, investment, and research and development, Invest NI helps new and existing Northern Irish businesses to compete internationally and works to attract new investment to Northern Ireland. The organization has over 600 professionals in its network, with business advisors across Northern Ireland, and throughout Europe, the Americas, Asia and the Middle East. With U.S.-U.K. commercial relations in the headlines, we spoke with Peta Conn, the Boston-based Executive Vice President and Head of Americas for Invest NI about the narrative she shares.

“Northern Ireland’s strength is its talent – a growing youth population, excellent universities and people who want to stay. We offer a strong ecosystem that brings together government, academia and business. There is a real focus on ensuring we can cater to future demand for skills. I’d add that Northern Ireland offers a great lifestyle and one that is affordable. Many come for the business and stay for the life.”

Key industries in Northern Ireland include financial services, legal services and cyber security. According to FT fDi Markets, Belfast has been ranked as the world’s number one destination for financial technology development projects, the top city in Europe for new software development projects, and the number one international location for U.S. cyber security development projects.

Conn highlighted the importance of testimonials, including the vote of confidence from Boston-based security analytics software and services firm Rapid7, which announced in October 2014 it would set up a software innovation center in Boston’s sister city of Belfast, creating high-paying jobs. Speaking of the investment at that time, Rapid7 CEO Corey Thomas pointed to the work that Northern Ireland’s universities were doing in IT security and the availability of high-quality technical staff.

The Hunt for Talent

Despite the uncertainties of Brexit, Conn noted that the last few years have seen some of the strongest foreign direct investment flows out of the United States into Northern Ireland. “It’s really about the need for talent and an immediate need for developers.”

That talent flows from Northern Ireland’s two major universities – Queens University Belfast and Ulster University. Both are leaders in innovative research, and Queens is home to the Centre for Secure Information Technologies, the U.K.’s national innovation and knowledge center for cyber security.

“If you want development operations or software, you can do this at Belfast salaries that are 20 percent lower than Dublin and 30 percent lower than London, and also have lower workforce attrition.”

The Tools

Conn leads the Americas team, which includes a dozen people in Boston and 28 people in total across the region, in New York, Chicago, San Francisco, Miami, Toronto, Santiago, and, as of very recently, Los Angeles. In addition to promoting foreign direct investment, the team also helps Northern Ireland companies export to the United States.

Their performance indicators are based on employment and economic growth. Sales teams work to identify prospective investors and explain how Northern Ireland could fit within their growth strategies. Business development teams then offer customized solutions of how the market can specifically support business plans.

Once a company has committed to set up in Northern Ireland, one of the programs on offer is a pre-employment program called Assured Skills, which is unique to the region. Companies can co-design an academy-style course with a local training institution and then recruit a cohort of potential employees to take the course. At its conclusion, all participants are offered a job interview, thus de-risking the recruitment process and leading to a conversion rate of about 90 percent.

Crushing It

As U.S.-U.K. trade talks get underway, politics in both countries and the U.K.’s parallel negotiations with the EU, make the timing of any deal uncertain. The issue of Northern Ireland, which under the U.K.’s Withdrawal Agreement with the European Union (EU), remains part of the UK customs territory but subject to EU regulations, will be a focus of attention among U.S. lawmakers insistent on avoiding a hard border in Ireland and protecting the 1998 peace agreement that helped bring an end to conflict in the region.

A U.K. trade deal with the United States may bring modest benefits for Northern Ireland as government analysis suggests, but the Rt. Hon. Brandon Lewis, Secretary of State for Northern Ireland, has emphasized: “The United Kingdom is going to be one area and all will be able to benefit from our future global trade deals.”

While the talks proceed, Invest NI will continue to offer a compelling narrative of innovation, entrepreneurship, and opportunities to invest in Northern Ireland. Their stories will include everything from sophisticated software development to Northern Ireland’s dominance in producing 40 percent of the world’s mobile crushing machines and manufacturing a third of the world’s airline seats.

Like free trade agreement talks, investment promotion involves understanding long-term strategy direction and the areas of an economy’s competitive advantage. Invest NI will remain an important complement to U.K. government trade negotiation efforts, serving as the messenger of an economy that is open for business.

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Leslie Griffin is Principal of Boston-based Allinea LLC. She was previously Senior Vice President for International Public Policy for UPS and is a past president of the Association of Women in International Trade in Washington, D.C.

This article originally appeared on TradeVistas.org. Republished with permission.

Archives, Global Trade Daily, Imports/Exports

Global Concentrated Orange Juice Market – Brazil Strengthened Its Position as the World’s Leading Exporter

November 19th, 2019 IndexBox Leave a comment

IndexBox has just published a new report: ‘World – Concentrated Orange Juice – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The global concentrated orange juice market revenue amounted to $4B in 2018, growing by 6.1% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +1.5% from 2008 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being recorded throughout the analyzed period. The global concentrated orange juice market peaked in 2018 and is likely to continue its growth in the near future.

Consumption By Country

The countries with the highest volumes of concentrated orange juice consumption in 2018 were Brazil (674K tonnes), the U.S. (656K tonnes) and France (141K tonnes), with a combined 62% share of global consumption. The UK, Belgium, the Netherlands, Japan, Spain and Ireland lagged somewhat behind, together accounting for a further 18%.

From 2008 to 2018, the most notable rate of growth in terms of concentrated orange juice consumption, amongst the main consuming countries, was attained by Japan, while the other global leaders experienced more modest paces of growth.

In value terms, the U.S. ($1.4B), Brazil ($1.1B) and France ($218M) were the countries with the highest levels of market value in 2018, together accounting for 69% of the global market. These countries were followed by the Netherlands, Belgium, Japan, the UK, Ireland and Spain, which together accounted for a further 16%.

The countries with the highest levels of concentrated orange juice per capita consumption in 2018 were Belgium (8,445 kg per 1000 persons), Ireland (7,486 kg per 1000 persons) and the Netherlands (5,039 kg per 1000 persons).

From 2008 to 2018, the most notable rate of growth in terms of concentrated orange juice per capita consumption, amongst the main consuming countries, was attained by Japan, while the other global leaders experienced more modest paces of growth.

Market Forecast 2019-2025

Driven by rising demand for concentrated orange juice worldwide, the market is expected to start an upward consumption trend over the next seven years. The performance of the market is forecast to increase slightly, with an anticipated CAGR of +0.6% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 2.5M tonnes by the end of 2025.

Production 2007-2018

In 2018, the amount of concentrated orange juice produced worldwide totaled 2.2M tonnes, rising by 6% against the previous year. The total output volume increased at an average annual rate of +1.8% over the period from 2008 to 2018; the trend pattern remained consistent, with only minor fluctuations being observed throughout the analyzed period. The most prominent rate of growth was recorded in 2009 with an increase of 8.3% against the previous year. Over the period under review, global concentrated orange juice production reached its peak figure volume in 2018 and is expected to retain its growth in the immediate term.

In value terms, concentrated orange juice production amounted to $3.4B in 2018 estimated in export prices. In general, the total output indicated a perceptible expansion from 2008 to 2018: its value increased at an average annual rate of +1.8% over the last decade. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, concentrated orange juice production increased by +19.1% against 2016 indices. The growth pace was the most rapid in 2012 when production volume increased by 53% against the previous year. Over the period under review, global concentrated orange juice production reached its maximum level at $3.5B in 2017, and then declined slightly in the following year.

Production By Country

Brazil (1.1M tonnes) constituted the country with the largest volume of concentrated orange juice production, accounting for 49% of total production. Moreover, concentrated orange juice production in Brazil exceeded the figures recorded by the world’s second-largest producer, the U.S. (413K tonnes), threefold. The third position in this ranking was occupied by Mexico (137K tonnes), with a 6.4% share.

In Brazil, concentrated orange juice production expanded at an average annual rate of +3.1% over the period from 2008-2018. The remaining producing countries recorded the following average annual rates of production growth: the U.S. (+0.7% per year) and Mexico (+16.9% per year).

Exports 2007-2018

Global exports totaled 1.3M tonnes in 2018, growing by 16% against the previous year. In general, concentrated orange juice exports, however, continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2018 when exports increased by 16% y-o-y. Over the period under review, global concentrated orange juice exports attained their peak figure at 1.6M tonnes in 2009; however, from 2010 to 2018, exports stood at a somewhat lower figure.

In value terms, concentrated orange juice exports amounted to $2B (IndexBox estimates) in 2018. In general, concentrated orange juice exports, however, continue to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2010 when exports increased by 11% y-o-y. The global exports peaked at $2.3B in 2011; however, from 2012 to 2018, exports remained at a lower figure.

Exports by Country

Brazil was the largest exporting country with an export of about 381K tonnes, which amounted to 30% of total exports. Belgium (146K tonnes) occupied a 12% share (based on tonnes) of total exports, which put it in second place, followed by the Netherlands (12%), Mexico (11%), Costa Rica (9.4%) and Germany (5.2%). The following exporters – Spain (31K tonnes), South Africa (25K tonnes), the UK (22K tonnes), Thailand (20K tonnes) and the U.S. (20K tonnes) – each finished at a 9.4% share of total exports.

From 2008 to 2018, average annual rates of growth with regard to concentrated orange juice exports from Brazil stood at +1.1%. At the same time, Mexico (+29.4%), Costa Rica (+16.4%), South Africa (+9.4%), the UK (+7.3%) and Thailand (+1.6%) displayed positive paces of growth. Moreover, Mexico emerged as the fastest-growing exporter in the world, with a CAGR of +29.4% from 2008-2018. By contrast, the Netherlands (-1.4%), Germany (-4.0%), the U.S. (-4.0%), Spain (-6.6%) and Belgium (-9.5%) illustrated a downward trend over the same period. From 2008 to 2018, the share of Mexico, Costa Rica and Brazil increased by +9.9%, +7.4% and +3% percentage points, while the Netherlands (-1.7 p.p.), Spain (-2.5 p.p.), Germany (-2.6 p.p.) and Belgium (-19.9 p.p.) saw their share reduced. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, the largest concentrated orange juice markets worldwide were Brazil ($706M), Belgium ($418M) and the Netherlands ($358M), together accounting for 74% of global exports. Germany, Costa Rica, Mexico, the U.S., Spain, South Africa, the UK and Thailand lagged somewhat behind, together comprising a further 18%.

Mexico recorded the highest rates of growth with regard to exports, among the main exporting countries over the last decade, while the other global leaders experienced more modest paces of growth.

Export Prices by Country

The average concentrated orange juice export price stood at $1,593 per tonne in 2018, declining by -6.4% against the previous year. Over the period under review, the concentrated orange juice export price, however, continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2011 an increase of 28% year-to-year. In that year, the average export prices for concentrated orange juice attained their peak level of $1,744 per tonne. From 2012 to 2018, the growth in terms of the average export prices for concentrated orange juice remained at a lower figure.

There were significant differences in the average prices amongst the major exporting countries. In 2018, the country with the highest price was Belgium ($2,855 per tonne), while Mexico ($418 per tonne) was amongst the lowest.

From 2008 to 2018, the most notable rate of growth in terms of prices was attained by Belgium, while the other global leaders experienced more modest paces of growth.

Imports 2007-2018

In 2018, approx. 1.5M tonnes of concentrated orange juice were imported worldwide; jumping by 17% against the previous year. Over the period under review, concentrated orange juice imports, however, continue to indicate a measured deduction. The pace of growth was the most pronounced in 2018 when imports increased by 17% year-to-year. Over the period under review, global concentrated orange juice imports attained their maximum at 2M tonnes in 2008; however, from 2009 to 2018, imports remained at a lower figure.

In value terms, concentrated orange juice imports stood at $2.3B (IndexBox estimates) in 2018. In general, concentrated orange juice imports, however, continue to indicate a measured drop. The pace of growth appeared the most rapid in 2011 with an increase of 23% against the previous year. The global imports peaked at $2.8B in 2008; however, from 2009 to 2018, imports remained at a lower figure.

Imports by Country

The countries with the highest levels of concentrated orange juice imports in 2018 were the U.S. (263K tonnes), the Netherlands (231K tonnes), Belgium (190K tonnes), France (142K tonnes), the UK (122K tonnes) and Germany (101K tonnes), together amounting to 71% of total import. The following importers – Japan (51K tonnes), Spain (44K tonnes), Ireland (41K tonnes) and Poland (35K tonnes) – together made up 11% of total imports.

From 2008 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Japan, while the other global leaders experienced more modest paces of growth.

In value terms, the Netherlands ($471M), Belgium ($347M) and Germany ($227M) constituted the countries with the highest levels of imports in 2018, with a combined 46% share of global imports. These countries were followed by the UK, France, the U.S., Japan, Spain, Poland and Ireland, which together accounted for a further 37%.

Among the main importing countries, Japan experienced the highest growth rate of imports, over the last decade, while the other global leaders experienced more modest paces of growth.

Import Prices by Country

In 2018, the average concentrated orange juice import price amounted to $1,523 per tonne, coming down by -6.1% against the previous year. In general, the concentrated orange juice import price, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2011 when the average import price increased by 28% against the previous year. In that year, the average import prices for concentrated orange juice attained their peak level of $1,625 per tonne. From 2012 to 2018, the growth in terms of the average import prices for concentrated orange juice failed to regain its momentum.

Prices varied noticeably by the country of destination; the country with the highest price was Spain ($2,496 per tonne), while the U.S. ($450 per tonne) was amongst the lowest.

From 2008 to 2018, the most notable rate of growth in terms of prices was attained by Spain, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

Archives, Global Logistics, Global Trade Daily

Johnston Logistics Announces Full Integration with Dachser Network

July 16th, 2019 GT Staff Leave a comment

Global logistics provider, Dachser, continues strong in extending its international footprint, as the company confirmed the acquisition and re-branding of Ireland-based Johnston Logistics Ltd. earlier this month. As of September 2019, Johnston Logistics Ltd. will become Dachser Ireland Ltd., confirming complete integration with Dachser.

“The rebranding makes the full integration of Johnston Logistics into the Dachser network visible to the outside world. At the same time, the connection to all our systems ensures that the Irish country organization is secure and stable for the future,” explains Dachser CEO Bernhard Simon.

The full integration follows a robust 12-year partnership between Dachser and Johnston, with Dachser taking over a majority of the company’s stake in 2017. Dachser’s primary warehouse and transport management IT systems -DOMINO and MIKADO, were integrated earlier this year in addition to Dachser’s truck presence in Ireland.

“With the integration into the Dachser network, we have found a good, sustainable path for future developments. Both family businesses stand for the same values. And both sides contribute expertise that will ensure further growth—in both our domestic and our export business,” concluded Albert Johnston, Managing Director of Johnston Logistics.

Founded in 1979, Johnston Logistics boasts expertise in dangerous goods transportation and will focus efforts specifically for groupage and to serve customers in chemical, pharmaceutical, hardware, plastics and packaging industries. Johnston reported 346,000 shipments and 120 daily departures during 2018.

“The integration of an experienced and capable partner such as Johnston Logistics is absolutely in line with one of Dachser’s main interests: we want our customers in Ireland to get the maximum benefit from uniform services and quality standards, fixed transit times, and the closely integrated network of Dachser branches throughout Europe,” added Michael Schilling, COO Road Logistics at Dachser.

Source: Dachser USA

Acquisitions, Archives, Banking on Global Trade, Global Trade Daily, News

Chiquita: Goodbye, Fyffes; Hello, Cutrale-Safra

October 28th, 2014 Haylle Sok Leave a comment

Charlotte, NC – Shareholders of Chiquita Brands International have done an about-face in rejecting the global fruit producer’s proposed acquisition of Ireland-based rival Fyffes PLC.

The company has said it will, instead, enter into negotiations with Cutrale-Safra, a consortium made up of The Cutrale Group, a little-known Brazilian fruit wholesaler, and the Safra Group, a private investment company.

Since March, Chiquita remained focused on pursuing its planned acquisition of Fyffes for $526 million.

Chiquita-Fyffes merger would have expanded Chiquita’s reach deep into Europe, creating the largest banana-producer-distributor in the world with generating an estimated $4.6 billion in revenue annually.

In addition, the North Carolina-headquartered company would have had the opportunity to reincorporate in Ireland and gain significant tax considerations in a so-called ‘inversion’ transaction.

Now, instead of remaining a public company and reincorporating abroad, Chiquita will reportedly pay Fyffes a multimillion-dollar termination fee and be taken private.

The Cutrale-Safra group appeared relatively late after Chiquita had made its bid for Fyffes, offering an all-cash deal with no financing conditions, and closure of the deal within the calendar year.

Until now, Chiquita’s board had consistently rejected Cutrale-Safra’s bids as too low, including a recent bid of $14.50 a share, up from the previous $14.00 bid. The most recent bid by the Brazilians values Chiquita at around $680 million.

Based in Sao Paulo, Brazil, The Safra Group, with $200 billion in assets, operates the Safra National Bank of New York; Banco Safra in Brazil; Bank Jacob Safra in Switzerland; real estate and farmland on several continents; and a variety of other holdings.

10/27/2014

Archives, Commentary, Global Trade Daily, News

Apple, Starbucks Targeted by EU Tax Authorities

June 16th, 2014 Haylle Sok Leave a comment

Los Angeles, CA – European Commission (EC) competition regulators are investigating tax breaks for Apple Inc. and Starbucks Corp. in Ireland and The Netherlands, respectively, that it suspects are in violation of European Union tax codes.

The investigation comes as governments around the world are cracking down on tax-avoidance and evasion by scrutinizing the financial practices of a growing number of multi-national companies such as Hewlett-Packard, Google, Microsoft, McDonalds, and Amazon.com.

According to the EC, tax avoidance and evasion by foreign companies operating in the EU amounts to more than $1.4 trillion a year.

The EC reportedly began gathering information about accords between Apple and Ireland, and Starbucks and the Netherlands last year following reports that some companies received “significant” tax reductions.

“We need to fight against aggressive tax planning,” said Joaquin Almunia, the EU’s competition commissioner at a recent press conference in Brussels, adding that it is “still too soon to anticipate” possible recovery if the EU finds the tax rulings to be illegal.”

Apple Responds

While Starbuck’s didn’t respond to requests for a statement on the EC investigation, California-based Apple issued a response saying that the company “pays every euro of every tax that we owe. We have received no selective treatment from Irish officials. Apple is subject to the same tax laws as scores of other international companies doing business in Ireland.”

Ireland’s Finance Ministry said it is “confident that there is no state-aid-rule breach” and will “defend all aspects vigorously.”

The EC said that it is “concerned that current arrangements could underestimate the taxable profit and grant an advantage to the respective companies by allowing them to pay less tax.”

Apple, the company said in a public statement, “pays every euro of every tax that we owe. We have received no selective treatment from Irish officials. Apple is subject to the same tax laws as scores of other international companies doing business in Ireland.”

Ireland’s Finance Ministry said it is “confident that there is no state-aid-rule breach” and will “defend all aspects vigorously.” The EU probe targets “a very technical tax issue in a specific case” and covers 2004 to 2014, it said in an e-mailed statement.

“Patent Boxes” Under the Microscope

Widening the scope of its investigation, the EC is also seeking details from Belgium, Spain, France, Hungary, Luxembourg, The Netherlands, the UK, Cyprus and Malta on so-called “patent boxes,” a mechanism that allows tax reductions on income derived from patents.

The EC said in March it has indications that the programs mainly benefit highly mobile businesses without triggering significant additional research and development.

The UK, for example, patent box phases in a lower corporation tax on some profits from patented inventions and certain other innovations, according to the EC website.

Changes to EU tax rules require unanimous approval among the bloc’s 28-member nations, rendering major changes to individual county’s tax regulations difficult, if not impossible as even the most enthusiastic members of the bloc cling to their right to set corporate tax rates.

The opening of an in-depth investigation by the commission allows third parties, as well as the three countries concerned, an opportunity to submit comments.

06/16/2014