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EU Chewing Gum Market | Mondelez International Inc., Mars, Tootsie Roll Industries Inc.

EU Chewing Gum Market | Mondelez International Inc., Mars, Tootsie Roll Industries Inc.

IndexBox has just published a new report, the EU – Chewing Gum – Market Analysis, Forecast, Size, Trends And Insights. Here is a summary of the report’s key findings.

The revenue of the chewing gum market in the European Union amounted to $117M in 2017, standing approx. at 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).

Over the last decade, chewing gum consumption continues to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2008, when the market value increased by 17% against the previous year. In that year, the chewing gum market reached its peak level of $148M. From 2009 to 2017, the growth of the chewing gum market failed to regain its momentum.

Production in the EU

In 2017, chewing gum production in the European Union totaled 15K tonnes, approximately reflecting the previous year.

Exports in the EU

In 2017, the amount of chewing gum exported in the European Union totaled 28K tonnes, coming down by -2.6% against the previous year. Over the period under review, chewing gum exports continue to indicate a perceptible reduction.

In value terms, chewing gum exports amounted to $183M (IndexBox estimates) in 2017.

Exports by Country

Spain (5.1K tonnes), the Netherlands (5K tonnes), France (4.7K tonnes) and the UK (3.4K tonnes) represented roughly 65% of total exports of chewing gum in 2017. It was distantly followed by Germany (2.2K tonnes), making up 7.7% share of total exports. Portugal (943 tonnes), Belgium (912 tonnes), Italy (761 tonnes), Poland (715 tonnes), Romania (676 tonnes), Denmark (649 tonnes) and Greece (525 tonnes) followed a long way behind the leaders.

From 2007 to 2017, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Romania, while the other leaders experienced mixed trends in the exports figures.

In value terms, the Netherlands ($39M), France ($38M) and Spain ($23M) were the countries with the highest levels of exports in 2017, together comprising 55% of total exports. These countries were followed by the UK, Germany, Poland, Italy, Belgium, Romania, Portugal, Greece and Denmark, which together accounted for a further 36%.

Export Prices by Country

The chewing gum export price in the European Union stood at $6.5 per kg in 2017, increasing by 5.4% against the previous year. Over the last decade, it increased at an average annual rate of +1.0%.

There were significant differences in the average export prices amongst the major exporting countries. In 2017, the country with the highest export price was France ($8,025 per tonne), while Portugal ($3,895 per tonne) was amongst the lowest.

From 2007 to 2017, the most notable rate of growth in terms of export prices was attained by Poland, while the other leaders experienced more modest paces of growth.

Imports in the EU

In 2017, imports of chewing gum in the European Union totaled 36K tonnes, coming down by -3.8% against the previous year.

In value terms, chewing gum imports totaled $183M (IndexBox estimates) in 2017. In general, chewing gum imports continue to indicate a measured reduction. The level of imports peaked at $251M in 2008; however, from 2009 to 2017, imports failed to regain their momentum.

Imports by Country

In 2017, Germany (9K tonnes), distantly followed by the Netherlands (4.8K tonnes), Spain (3.4K tonnes), the UK (2.7K tonnes), Belgium (2.3K tonnes) and France (1.9K tonnes) were the key importers of chewing gum, together creating 67% of total imports. Romania (1.3K tonnes), Poland (1.2K tonnes), Italy (1.2K tonnes), Denmark (897 tonnes), the Czech Republic (821 tonnes) and Sweden (771 tonnes) took a minor share of total imports.

From 2007 to 2017, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Spain, while the other leaders experienced mixed trends in the imports figures.

In value terms, Germany ($49M) constitutes the largest market for imported chewing gum in the European Union, comprising 27% of total chewing gum imports. The second position in the ranking was occupied by the Netherlands ($23M), with a 13% share of total imports. It was followed by Spain, with a 8.4% share.

Import Prices by Country

In 2017, the chewing gum import price in the European Union amounted to $5.1 per kg, approximately reflecting the previous year. Over the period under review, the chewing gum import price, however, continues to indicate a relatively flat trend pattern.

Average import prices varied somewhat amongst the major importing countries. In 2017, major importing countries recorded the following import prices: in the Czech Republic ($6,141 per tonne) and Belgium ($5,452 per tonne), while Romania ($4,197 per tonne) and Spain ($4,539 per tonne) were amongst the lowest.

From 2007 to 2017, the most notable rate of growth in terms of import prices was attained by Romania, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

Modified Starches Market in the EU – Key Insights

IndexBox has just published a new report, the EU – Dextrins And Other Modified Starches – Market Analysis, Forecast, Size, Trends And Insights. Here is a summary of the report’s key findings.

The revenue of the modified starches market in the European Union amounted to $2.2B in 2017, surging by 4% 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 modified starches consumption continues to indicate a noticeable curtailment. The growth pace was the most rapid in 2011, with an increase of 31% against the previous year. Over the period under review, the modified starches market attained its maximum level at $3.7B in 2008; however, from 2009 to 2017, consumption failed to regain its momentum.

Production in the EU

The modified starches production amounted to 2.9M tonnes in 2017, jumping by 5.1% against the previous year. The modified starches production continues to indicate a mild shrinkage.

Modified Starches Exports

Exports in the EU

In 2017, approx. 1.8M tonnes of dextrins and other modified starches were exported in the European Union; rising by 6.1% against the previous year. The total export volume increased at an average annual rate of +1.1% from 2007 to 2017; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed throughout the analyzed period. The growth pace was the most rapid in 2010, with an increase of 16% y-o-y. Over the period under review, modified starches exports attained their maximum in 2017, and are expected to retain its growth in the immediate term.

In value terms, modified starches exports stood at $1.7B (IndexBox estimates) in 2017. The modified starches exports continue to indicate a relatively flat trend pattern. The level of exports peaked at $2B in 2014; however, from 2015 to 2017, exports remained at a lower figure.

Exports by Country

France (486K tonnes) and the Netherlands (468K tonnes) represented roughly 52% of total exports of dextrins and other modified starches in 2017. Germany (303K tonnes) held the second position in the ranking, distantly followed by Italy (131K tonnes), Belgium (94K tonnes) and Austria (84K tonnes). All these countries together held approx. 33% share of total exports. Sweden (69K tonnes) followed a long way behind the leaders.

From 2007 to 2017, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Austria (+11.7% per year), while the other leaders experienced more modest paces of growth.

In value terms, the largest modified starches markets worldwide were the Netherlands ($441M), France ($377M) and Germany ($354M), with a combined 67% share of total exports. Austria, Italy, Sweden and Belgium lagged somewhat behind, together comprising a further 22%.

Export Prices by Country

The modified starches export price in the European Union stood at $947 per tonne in 2017, coming down by -1.9% against the previous year. The the modified starches export price continues to indicate a relatively flat trend pattern.

Export prices varied noticeably by the country of destination; the country with the highest export price was Austria ($1.6 per kg), while Belgium ($736 per tonne) was amongst the lowest.

From 2007 to 2017, the most notable rate of growth in terms of export prices was attained by Germany (+1.0% per year), while the other leaders experienced a decline in the export price figures.

Modified Starches Imports

Imports in the EU

In 2017, approx. 1.4M tonnes of dextrins and other modified starches were imported in the European Union; remaining stable against the previous year. The modified starches imports continue to indicate a slight deduction.

In value terms, modified starches imports totaled $1.3B (IndexBox estimates) in 2017. The modified starches imports continue to indicate a slight contraction. In that year, modified starches imports attained their peak of $1.7B. From 2012 to 2017, the growth of modified starches imports failed to regain its momentum.

Imports by Country

In 2017, Germany (360K tonnes) represented the largest importer for dextrins and other modified starches, constituting 26% of total imports. It was distantly followed by Finland (132K tonnes), the UK (129K tonnes), Sweden (105K tonnes), France (101K tonnes), Italy (86K tonnes), Belgium (82K tonnes), Poland (74K tonnes), the Netherlands (73K tonnes) and Spain (65K tonnes), together making up 60% share of total imports.

Germany was also the fastest growing in terms of the dextrins and other modified starches imports, with a CAGR of +1.7% from 2007 to 2017. Poland, Spain and Belgium experienced a relatively flat trend pattern. Sweden (-2.2%), Finland (-2.8%), the UK (-2.8%), France (-3.0%), Italy (-3.2%) and the Netherlands (-9.4%) illustrated a downward trend over the same period. From 2007 to 2017, the share of the Netherlands, the UK, Finland, France, Italy and Sweden increased by 8.7%, 3.1%, 3%, 2.6%, 2.4% and 1.9% percentage points, while Germany (-4%) saw their share reduced. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, Germany ($330M) constitutes the largest market for imported dextrins and other modified starches in the European Union, comprising 26% of global imports. The second position in the ranking was occupied by the UK ($130M), with a 10% share of global imports. It was followed by France, with a 9.8% share.

Import Prices by Country

The modified starches import price in the European Union stood at $922 per tonne in 2017, rising by 3.9% against the previous year. The the modified starches import price continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2011, an increase of 28% against the previous year. In that year, the import prices for dextrins and other modified starches attained their peak level of $1.1 per kg. From 2012 to 2017, the growth in terms of the import prices for dextrins and other modified starches failed to regain its momentum.

Import prices varied noticeably by the country of destination; the country with the highest import price was France ($1.3 per kg), while Finland ($654 per tonne) was amongst the lowest.

From 2007 to 2017, the most notable rate of growth in terms of import prices was attained by the Netherlands (+2.5% per year), while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform


Preserved Sweet Corn Market in the EU – Key Insights

IndexBox has just published a new report, the EU – Sweet Corn Prepared Or Preserved – Market Analysis, Forecast, Size, Trends and Insights. Here is a summary of the report’s key findings.

The revenue of the preserved sweet corn market in the European Union amounted to $459M in 2017, remaining relatively unchanged 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 +1.9% from 2007 to 2017; the trend pattern remained relatively stable, with somewhat noticeable fluctuations throughout the analyzed period.

The pace of growth was the most pronounced in 2008, when the market value increased by 28% against the previous year. The level of preserved sweet corn consumption peaked at $505M in 2014; however, from 2015 to 2017, consumption failed to regain its momentum.

Production in the EU

The preserved sweet corn production amounted to 350K tonnes in 2017, growing by 2.5% against the previous year. The total output volume increased at an average annual rate of +2.7% over the period from 2007 to 2017; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period.

Preserved Sweet Corn Exports

Exports in the EU

In 2017, approx. 376K tonnes of sweet corn prepared or preserved were exported in the European Union; jumping by 4.7% against the previous year. The total export volume increased at an average annual rate of +2.1% over the period from 2007 to 2017; the trend pattern remained consistent, with somewhat noticeable fluctuations throughout the analyzed period.

In value terms, preserved sweet corn exports totaled $474M (IndexBox estimates) in 2017. The preserved sweet corn exports continue to indicate a relatively flat trend pattern. Over the period under review, preserved sweet corn exports reached their peak figure at $582M in 2014; however, from 2015 to 2017, exports failed to regain their momentum.

Exports by Country

Hungary was the largest exporter of sweet corn prepared or preserved in the European Union, with the volume of exports resulting at 187K tonnes, which was near 50% of total exports in 2017. France (105K tonnes) took a 28% share (based on tonnes) of total exports, which put it in second place, followed by Spain (6.4%) and Belgium (5%). The following exporters – the Netherlands (9K tonnes), Germany (7.8K tonnes), Sweden (7.1K tonnes) and Italy (6.2K tonnes) each accounted for a 8% share of total exports.

From 2007 to 2017, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by the Netherlands (+25.4% per year), while the other leaders experienced more modest paces of growth.

In value terms, the largest preserved sweet corn markets worldwide were Hungary ($198M), France ($153M) and Spain ($41M), together accounting for 83% of total exports. These countries were followed by Belgium, the Netherlands, Germany, Italy and Sweden, which together accounted for a further 14%.

Export Prices by Country

The preserved sweet corn export price in the European Union stood at $1.3 per kg in 2017, approximately reflecting the previous year. The the preserved sweet corn export price continues to indicate a mild shrinkage.

There were significant differences in the average export prices amongst the major exporting countries. In 2017, the country with the highest export price was Spain ($1.7 per kg), while Sweden ($890 per tonne) was amongst the lowest.

From 2007 to 2017, the most notable rate of growth in terms of export prices was attained by Germany (+0.7% per year), while the other leaders experienced mixed trends in the export price figures.

Preserved Sweet Corn Imports

Imports in the EU

In 2017, approx. 384K tonnes of sweet corn prepared or preserved were imported in the European Union; growing by 6.4% against the previous year. The total import volume increased at an average annual rate of +2.0% over the period from 2007 to 2017; the trend pattern remained consistent, with only minor fluctuations being observed in certain years.

In value terms, preserved sweet corn imports stood at $470M (IndexBox estimates) in 2017. The total import value increased at an average annual rate of +1.1% over the period from 2007 to 2017; the trend pattern remained consistent, with only minor fluctuations being observed throughout the analyzed period. Over the period under review, preserved sweet corn imports attained their maximum at $562M in 2014; however, from 2015 to 2017, imports remained at a lower figure.

Imports by Country

The countries with the highest levels of preserved sweet corn imports in 2017 were Germany (75K tonnes), the UK (67K tonnes), Belgium (46K tonnes), Spain (42K tonnes), France (28K tonnes), Italy (23K tonnes), Sweden (18K tonnes), the Netherlands (17K tonnes) and Poland (16K tonnes), together accounting for 86% of total import.

From 2007 to 2017, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Belgium (+12.7% per year), while the other leaders experienced more modest paces of growth.

In value terms, the largest preserved sweet corn markets worldwide were the UK ($88M), Germany ($86M) and Spain ($60M), together accounting for 50% of total imports. These countries were followed by Belgium, France, Italy, Sweden, the Netherlands and Poland, which together accounted for a further 37%.

Import Prices by Country

The preserved sweet corn import price in the European Union stood at $1.2 per kg in 2017, reducing by -2.4% against the previous year. The the preserved sweet corn import price continues to indicate a slight contraction.

There were significant differences in the average import prices amongst the major importing countries. In 2017, the country with the highest import price was Sweden ($1.6 per kg), while Belgium ($888 per tonne) was amongst the lowest.

From 2007 to 2017, the most notable rate of growth in terms of import prices was attained by Poland (+0.1% per year), while the other leaders experienced mixed trends in the import price figures.

Source: IndexBox AI Platform

Uncertainty Over Brexit Leaves the B2B World in Suspense

When talk turns to Brexit, much of the discussion revolves around what will happen once the United Kingdom of Great Britain and Northern Ireland leaves the European Union. While the United Kingdom Parliament hashes out a withdrawal agreement, with Prime Minister Theresa May at the helm, the economy is already shifting in anticipation of… what? The trouble is, no one is quite sure. Even experts can only make educated guesses since their research hinges on the type of withdrawal the United Kingdom and European Union ultimately consent to.

Where Brexit currently stands – A high-level view

The European Union recently approved a second extension of the Brexit deadline to allow May additional time to forge a deal in Parliament and finalize the United Kingdom’s withdrawal from the Union. While the new October 31, 2019 deadline offers some breathing room, it leaves the United Kingdom and European Union in an uncertain economic limbo for most of this year.

The spiderweb of potential events that lay ahead for the United Kingdom stem from two of the most likely outcomes:

-May passes her withdrawal agreement in Parliament by October 31st. If she succeeds, the United Kingdom can hammer out future trade deals with the European Union, to be expanded upon after the separation is finalized.

-May does not pass her withdrawal agreement by October 31st. This would mean the United Kingdom leaves with no trade deals in place, and very little room to negotiate ideal terms in the future. A “no-deal” situation has the potential to create lingering consequences, particularly at the border between Northern Ireland – which is part of the United Kingdom – and the Republic of Ireland, with the European Union.

While those in favor of Brexit are eager for a more economically independent United Kingdom, others hope that the withdrawal agreement will come with lenient tariffs, not just at the Irish border, but for trade across the United Kingdom and European Union. Unfortunately, only time (and an approved withdrawal agreement) will tell how the trade relationship between the United Kingdom and Europe continues.

What Brexit means for businesses in the United Kingdom

Politics aside, the United Kingdom has already seen changes to their market and businesses since the original Brexit vote in late 2016. The pound sterling (GBP), which dropped drastically after the majority of United Kingdom citizens voted to leave the European Union, remains weakened in comparison to the United States Dollar (USD). The approach of each Brexit deadline has triggered a slight drop in the market, followed by a recovery a few days after the granted extensions.

The GBP and Euro (EUR) have become tied to shifts in the political sphere, rather than the market. Companies are making financial decisions in anticipation of a plummeting currency values caused by Brexit.  Many banks have already moved their home offices  from London to various European cities. Healthcare facilities are stockpiling life-saving medicines in the event of a shortage. United Kingdom-based businesses are reducing their investments and employment opportunities. 

How will Brexit affect U.S. business with the United Kingdom?

With a diminished value for pound sterling, currency exchanges between USD, GBP, and EUR won’t be very attractive for a while, especially when considering the added per-payment fees charged by banks to transmit funds across international borders. Global businesses depend on stable markets to keep exchange rates as uniform as possible; someone will always be paying the difference, whether it’s the buyer purchasing more currency, or the supplier receiving a reduced amount.

Companies whose accounts payable teams have adopted payment automation into their processes can use their rebates to mitigate irregular exchange rates. Payment solutions that lower the cost of electronic payments through exchange rate transparency ultimately improve the buyer’s relationships with their suppliers.

Only one thing left to do

The United Kingdom and European Union are in a transitory stage – and that is an enormous understatement. The Brexit experience is genuinely frustrating because it has no precedent, so no one’s sure what will ultimately happen. Economic growth may stagnate for a while, but as with any market, where there are ebbs, there will be flows. The only thing left to do is what the United Kingdom already does best: “Keep calm and carry on.”

Alyssa Callahan is a Technical Marketing Writer at Nvoicepay.  She has four years of experience in the B2B payment industry, specializing in cross-border B2B payment processes.

What to Consider when Planning for the Post-Brexit Period

The past weeks have seen a flurry of parliamentary activity in London, none of which has yielded any more clarity regarding the status of the UK’s membership in or relationship with the European Union. At time of writing, British lawmakers have twice voted down a proposed Brexit deal that EU officials have said is non-negotiable, and subsequently voted against leaving the EU without a deal.

Even in the likely event the EU agrees to delay the Brexit deadline, the future of Brexit remains very much in question, as Britain’s divided Parliament won’t be any more likely in the coming months to reach consensus than European officials are likely to re-open negotiations.

The innocent bystanders, of course, are the countless businesses on both sides of the English Channel, which have hitherto relied on seamless trade between the two entities, and which are increasingly reconsidering their relationships with suppliers and vendors across what has the potential to become a hard border.

Unprepared for Brexit

While the impending Brexit deadline has generated expected urgency in Britain’s parliament, the inevitability of Brexit has been known for nearly three years. Yet, as it stands today, many businesses are unprepared for the very real possibility of a hard Brexit. In fact, a recent report in the Wall Street Journal, citing a study by the Chartered Institute of Procurement & Supply (CIPS), notes only 40 percent of British businesses would be prepared to comply with a new customs compliance regime.

That’s a daunting number and serves as a call to action for those who have yet to prepare for Brexit’s rapid approach. Should a hard Brexit occur, it will serve as much more than a milestone; it will turn Britain’s customs regime on its head, sowing confusion and uncertainty that will inevitably result in disruption to supply chains, administrative headaches and unexpected costs. Industries heavily integrated with European supply chains, such as aerospace, pharma, food manufacturing and autos will face acute disruption.

Increasing Landed Costs

Perhaps the most urgent consideration for those who engage in trade will be the spike in associated landed costs. In the event of a hard Brexit, the current European customs regime will cease to apply to imports. The immediate effect will be the application of tariffs and Value-Added Taxes (VATs). Those tariffs will be based on Most Favored Nation (MFN) rates, which will vary by product and could be quite substantial. While the British government has already stated that, in the event of a hard Brexit, it plans to waive seven percent more tariffs than which  currently exist, VATs will still apply as will tariffs on virtually all imports from non-EU origins. That includes countries with which the EU currently maintains free trade deals, such as the Comprehensive and Economic Trade Agreement (CETA) recently signed between the EU and Canada.

Compliance (New customs regime)

While tariffs for EU imports may be reduced for the most part, customs declarations will still be required. This is a critical development. Given that approximately half of the UK’s imports come from the EU, and the EU has several trade agreements with key trading partners, there’s been little need for customs declarations in the UK to this point. However, after Brexit, the number of customs declarations is estimated to increase almost 400 percent (from 55 million to 205 million) at a cost of approximately £6.5billion or USD $9.1 billion to businesses. In addition, there will be 180,000 British business who will be filing a customs declaration for the first time, while those who have already been filing declarations will need to adjust to a new regime of customs classification.

The importance of correctly classifying these cross border movements cannot be overstated. In a best-case scenario, such as declarations with missing information, importers will face delays at UK border crossings, which are already anticipated to be backlogged. In a worst-case scenario in which goods are misclassified, importers may face retroactive payments on top of financial penalties and – in extreme cases – lose their authorizations to import.

Border Delays

According to CIPS, 10 percent of UK businesses could lose EU business if there are delays at the border, and about 20 percent will see their EU buyers demand discounts for delays of more than a day.

The organization notes 38 percent of EU businesses have already changed suppliers because of Brexit and up to 60 percent of EU businesses would look to switch suppliers if border delays were to extend to two weeks or more.

Delays are almost inevitable given the more robust customs administration requirements. Today, tractor trailers pass through the UK-EU border without stopping. At the Port of Dover, the UK’s busiest and closest port to mainland Europe, some 17,000 tractor trailers pass through on a daily basis with only about two percent being stopped. After Brexit, almost all of them are likely to be stopped. Even if that stop is only for a few minutes, it’s going to result in a significant backlog of transports.

In short, importers into the UK and exporters out of the UK will need to factor in additional time in transit and set expectations with their trade partners on the other side of the English Channel.

Preparation is Key

Given the shrinking time window for preparation, businesses that haven’t done so already should be working with their trade services partners – carriers, freight forwarders, trade lawyers and consultants and customs brokers – to ensure they’re able to minimize the negative impact of Brexit on their trade activity.

The UK’s official leave from the EU may very well be imminent, or potentially months or even more than a year away, but given the consequences of inaction, getting prepared late is still better than not being prepared at all.

Mike Wilder is vice president of Managed Services at trade services firm Livingston International. He has 30 years of experience in trade compliance. He can be reached at mwilder@livingstonintl.com.

David Merritt is a director in the Global Trade Consulting division of trade services firm Livingston International. He can be reached at dmerritt@livingstonintl.com.

 

 

BIFA Advises Members to Prepare for No-Deal Brexit

With less than 10 days until the long awaited Brexit outcome, BIFA’s Director General Robert Keen stands by his initial warning to freight forwarders to prepare for a no-deal environment and remain one step ahead in a statement this week. Keen’s comments further reiterate the confidence he has in the proactive measures implemented by the company’s members.

“Confusion reigns and with less than a fortnight to go before Brexit, no proposal is off the table and some suggest that a ‘no deal’ exit can happen because last week’s vote was advisory.

“A no-deal departure would be very disruptive and damaging for the UK economy as a whole, but freight forwarders – many of whom are Authorized Economic Operator (AEO) accredited – would play a key role in tidying up the mess left by the politicians by ensuring UK importers and exporters can continue trading with the rest of Europe as best as possible after March 29.

“I am pleased to report that BIFA members are ahead of the curve and planning for every eventuality, with their trade association trying to make sure it gets relevant information to its members following the release of that information from the various UK government departments.

“BIFA’s executive management has engaged with various government departments over the last two years regarding the issues that affect the movement of visible trade post March 29th, in order to provide our members with advice on those discussions whenever procedures are finalized.

“Our members have also been discussing the possible impacts with their clients.”

“Large and small, BIFA members have taken actions to review all options to overcome the disorder that a no-deal Brexit could bring to international trade in order to define sustainable solutions as the set of Brexit conditions becomes clearer.

“One thing is certain, our members are ready, willing and able to clear up any mess regarding the movement of freight into and from the UK, created by politicians.”

Source: Impress Communications

Tariffs Raise Concerns Among Business Leaders

In response to the U.S. – China trade deal meeting delay,  American business leaders continue expressing concerns, stating that the end of the tariff impact is far from over and continues to negatively impact business operations. Freedom Partners Executive Vice President Nathan Nascimento commented on the current situation, adding that damages brought on by the tariffs situation affects growth, job creation, and more.

“From lost sales to increased costs, higher tariffs give America’s job creators big headaches and endanger our prosperity. We urge the administration to work with other nations to drop the tariffs and eliminate all barriers to trade. The time is now because, the longer this standoff drags on, the markets and suppliers that closed overnight to U.S. producers may take years to re-open. Tariffs are destructive taxes that sow only fear and confusion, where free trade fosters job creation and gives American consumers more choices at affordable prices to stretch paychecks further.”

Additionally, Freedom Partners reported on information released by the Census Bureau back in February that stated an additional $2.7 billion was spent in tariffs by business in November compared to the $375 million spent in November 2017.

“Tariffs Hurt the Heartland, a nationwide campaign against recent tariffs on American businesses, farmers and consumers, today released new data that shows American businesses paid an additional $2.7 billion in tariffs in November 2018 — the most recent month data is available from the U.S. Census Bureau due to the government shutdown. This figure reflects the additional tariffs levied because of the administration’s actions and represents a $2.7 billion tax increase and a massive year-over-year increase from $375 million in tariffs on the same products in November 2017.” (Press Release, “New Data Shows Trump Administration Tariffs Cost U.S. Businesses $2.7 Billion In A Single Month, Exports of American Products Targeted For Retaliation Plummet 37 Percent,” Tariffs Hurt The Heartland, 2/14/19).

Other executives, such as Brown-Forman Corporation CEO, Lawson Whiting add that international sales are feeling the impacts from tariffs from the EU’s retaliation:

“Brown-Forman owns Jack Daniel’s, Woodford Reserve and numerous other spirits brands. While most of its products are made in the U.S., most of its sales (about 60 percent) are made in international markets. And the cost of tariffs on American whiskey implemented by the European Union in retaliation for new U.S. tariffs were a drag on earnings. A key part of Brown-Forman’s global strategy is to focus on building a market for its super-premium brands, such as Gentleman Jack and Woodford Reserve,” (David Mann, “Brown-Forman Shares Sink After Earnings Release,” Louisville Business First, 3/6/19).

Source: Freedom Partners

Dachser Offers Customers Tips in Potential Brexit Environment

As March 29 draws closer, companies heavily involved in customs clearance prepare for the the changing environment in the near future. With these changes, companies are encouraged to employ forward-thinking and strategic approaches to gauge predicted shifts. Dachser Logistics released three essential tips on how their customers can best prepare for unpredictable changes while maintaining streamlined operations.

“We recommend that our customers prepare for a potentially hard Brexit,” says Wolfgang Reinel, Managing Director European Logistics North Central Europe at DACHSER.

Time is of the essence as companies have about three weeks to strategize and plan for what’s to come once March 29  confronts them. Dachser stresses the importance of acting now, rather than waiting for a Brexit-filled environment to be confirmed.

Additionally, the company added the potential implementation of shifting customs procedures should a hard-Brexit come to fruition, impacting both imports and exports. Company leaders explain Dachser is well able to support its customers, but requires cooperation on all ends for success.

DACHSER can provide its customers with support in many ways when it comes to customs. That being said, here we’re dependent on close cooperation,” said Vinzenz Hingerl, Department Head Customs at DACHSER. “These can all be prepared well in advance. “It’s also important to agree with trade partners on the Incoterms that will apply in the future. This will help avoid processing delays ahead of time. The Incoterms define who commissions customs clearance as well as who assumes the costs for dispatch and for import duties.”

Lastly, as Dacsher continues preparations for a hard-Brexit environment, the company encourages its customers to tap into its well prepared and reliable network of resources.

“Uncertainties are part and parcel of the logistics business,” says Reinel. “Brexit is a challenge and DACHSER is ready to meet it. The UK is and will remain an important part of DACHSER’s European network. We are posting continuous growth there, and despite the disruptions that Brexit could cause, we expect that this positive trend will continue for our UK country organization.”

 

Source: BSY Associates 

Is a Future U.S.-UK trade deal stuck in a Catch 22?

It seems the aspirations of the pro-Brexit camp have been put in a rather uncomfortable place, which may restrict the degree to which the UK can take advantage of its upcoming independence from the European Union.

As many will recall, much of the impetus behind the Brexit movement was to break Britain free from the shackles of EU regulatory policies and the multilateral system of negotiating agreements through Brussels, rather than London. The “Vote Leave” movement felt the UK would be better off negotiating trade deals on its own, emphasizing the value of a bilateral UK-U.S. trade deal.

No Backstop, No Deal

Yet, precisely how successful negotiations between London and Washington might be has become a very open question. During a recent visit to Washington by Irish Deputy Prime Minister, Simon Coveney, members of U.S. Congress stressed unequivocally that any Brexit deal between the UK and EU must include an open border between Northern Ireland and the Irish Republic. The members of Congress – which include Richard Neal, a Democrat who chairs the House Ways & Means Committee that will oversee any future U.S.-UK deal – believe a hard Brexit that establishes a hard border would jeopardize the peace process set out in the Good Friday Agreement of 1998 and, therefore, would be unacceptable. House Democrat Brendan Boyle, a member of the Friends of Ireland caucus, even went so far as to introduce a resolution in the House to oppose any reestablishment of a hard border.

Britain’s parliament recently rejected a proposed Brexit plan that would have included a backstop to maintain a soft Irish border in the event the UK and EU were unable to come to an agreement on the terms of trade in the post-Brexit transition period. British Prime Minister Theresa May is now in discussions with EU officials to receive assurances in writing that the backstop would be only a temporary measure, so that she may ease the concerns of pro-Brexiters who see the backstop as a mechanism to bind UK customs policy and processes with those of Brussels.

Soft Border Could Also Sour Deal

Even in the event the UK and EU come to mutually agreeable terms on Britain’s exit from the EU that satisfies the British parliament, the possibility of Washington and London finding common ground on a trade deal is far from a foregone conclusion.

In spite of the tensions caused by Brexit, the EU will remain the UK’s largest trading partner and London’s first priority will be to secure favorable terms of trade with Brussels. Such terms are likely to demand adherence to the EU’s elevated regulatory standards for health and safety, particularly as it pertains to food items. If the recent feedback from U.S. industry groups on the negotiating objectives of a U.S.-UK agreement are any indication, adherence to these regulations will likely be a point of contention, as U.S. producers believe the EU’s current regulations are too onerous and restrict the degree to which U.S. producers can sell their products in the EU.

EU regulations are also likely to creep into areas such as data privacy. If the UK agrees to adhere to the EU’s recently implemented General Data Protection Rules (GDPR), this may become a stumbling block in negotiations as data privacy in the U.S. is not regulated in the same manner.

The upcoming decision by the U.S. Department of Commerce as to whether or not to apply Section 232 tariffs on European automobiles will likely also have an influence over negotiations. As noted in a recent Harvard working paper that examines the prospects for U.S.-UK trade, the EU will want to ensure the UK does not serve as a backdoor for entry into the EU of tariffed U.S. goods. This will be particularly true for automobiles and auto parts in the event the EU is forced to reciprocate possible U.S. Section 232 tariffs on EU autos.

Is a U.S.-UK trade deal doomed?

The aforementioned challenges certainly present a less-than-optimistic vision for what trade across the Pond might look like. But it’s in both nations’ interests to see a deal through. The U.S. is an important export market for the UK, representing half of the UK’s non-EU exports. The UK is a critical international financial and service center to which many U.S. companies would like to secure access, and a trade deal with the UK would likely make the path to securing a U.S.-EU deal much smoother.

But the challenges noted above are very real and the outcome of Brexit will have a profound influence over how the parties negotiate a future trade deal. A soft Brexit, while far more complex from a negotiation standpoint, may provide greater opportunity for negotiation than a hard Brexit that not only shuts out the EU but also runs the risk of compromising the integrity of a critical peace accord the U.S. helped to broker.

Either way, the process is likely to be slow and the conclusion a long time coming.

Mike Wilder is vice president of Managed Services at trade services firm Livingston International. He has 30 years of experience in trade compliance and consulting, and specializes in the auto sector. He can be reached at mwilder@livingstonintl.com.

Gavin Everson is a London-based senior director in Livingston’s Global Trade Management division. He has more than 30 years of experience in customs, trade and logistics management. He can be reached at geverson@livingstonintl.com.

Brexit: BIFA Responds to UK Parliament’s Deal Rejection

The most recent response from Director General of the British International Freight Association (BIFA), Robert Keen, makes a clear indication  the decision made  by the UK Parliament to reject a deal must be acknowledged and prepared for to keep importers and exporters in a good place for the sake of UK’s visible trade, come March 29.

“The decision taken by Parliament is historic and needs to be acknowledged.  With just a couple of months to go before the exit date, the rejection of the deal leads BIFA to recommend that our members, which are the companies that handle the processing of most of the UK’s visible trade, to prepare on the basis that there will be a hard Brexit,” commented Robert Keen. “Speculating about any other outcome is inadvisable until UK Government provides us with clear guidelines. A hard deal may well be very disruptive and damaging for the UK economy as a whole, but freight forwarders – many of whom are Authorised Economic Operator (AEO) accredited – will play a key role in tidying up the mess left by the politicians by ensuring UK importers and exporters can continue trading without undue disruption with the rest of Europe after March 29.”

The theme is proactivity and planning next steps as the deadline approaches. Implementing trade strategies earlier than later significantly reduces the risk of trade barriers making an appearance after the fact, while preparing the region for a major shift.

“BIFA has always stated its belief that a disorderly Brexit would be the worse outcome, as it is likely to increase trade barriers and impose significant restrictions on the exchange of goods between the EU and the UK.

“Whilst BIFA’s executive management has engaged with various government departments over the last two years in regards to issues that affect the movement of visible trade post March 29th, our members have also been discussing the possible impacts with their clients.

“Large and small, BIFA members have taken actions to review all options to overcome the disorder that a no-deal Brexit could bring to international trade in order to define sustainable solutions as the set of Brexit conditions becomes clearer,” Keen said. “BIFA will be renewing our appeals to the responsible bodies in London and Brussels to do the utmost to prevent this scenario. As far as we are concerned, our members are focused on ensuring the ongoing efficient flow of freight for our customers.”

Hew concludes:

“One thing is certain, our members are ready, willing and able, to clear up the mess that has been left by politicians.”

 

Source: Impress Communications