Tag: EU

European Union and New Zealand Sign Trade Agreement

In a significant development for international trade, the European Union (EU) and New Zealand recently finalized a comprehensive free trade agreement. The agreement, signed on Monday, is expected to foster economic growth and strengthen bilateral ties between the two regions. Both parties anticipate a substantial boost in trade volume, with projections suggesting an increase of up to 30% within the next ten years. This article delves into the details of the agreement, highlighting its potential benefits for New Zealand and the EU.

 

Increased Export Opportunities for New Zealand

 

New Zealand stands to gain significantly from this historic trade agreement, with projected annual exports to the EU estimated to reach 1.8 billion New Zealand dollars (approximately $1.1 billion or €1 billion). The deal, which took five years to negotiate, is set to eliminate duties amounting to NZ$248 million ($153 million or €140 million) per year, according to a statement released by the European Commission. This removal of trade barriers will create favorable conditions for New Zealand businesses, allowing them to expand their presence in the lucrative European market.

 

Tariff Reduction and Market Access

 

A key aspect of the agreement is the gradual reduction of tariffs on New Zealand’s goods exported to the EU. Initially, duties will be removed on 91% of New Zealand’s exports, and this figure is expected to rise to 97% within seven years. The phased elimination of tariffs will significantly enhance market access for New Zealand products, enabling a wider range of industries to benefit from the trade agreement. This is particularly promising for sectors such as agriculture, dairy, wine, and forestry, which are vital to New Zealand’s economy.

 

EU’s Indo-Pacific Partnership

 

Highlighting the strategic importance of New Zealand as a partner in the Indo-Pacific region, European Commission President Ursula von der Leyen emphasized the significance of this free trade agreement. With the aim of bringing the two regions closer together, President von der Leyen hailed the agreement as a crucial step towards fostering stronger ties and capitalizing on shared economic opportunities. The EU’s commitment to deepening partnerships in the Indo-Pacific reflects the region’s increasing economic significance and potential for growth.

 

Legislative Ratification and Future Prospects

Although the free trade agreement has been signed, it is yet to be ratified by the parliaments of both New Zealand and the EU. Once ratified, the agreement will come into effect, marking the beginning of a new era of trade cooperation. This landmark agreement between New Zealand and the EU demonstrates a commitment to open markets, economic integration, and the benefits of globalization.

The free trade agreement between the European Union and New Zealand represents a significant milestone in strengthening economic ties between the two regions. By eliminating tariffs and facilitating market access, the agreement opens up new avenues for trade and commerce. New Zealand’s exporters stand to benefit from expanded opportunities in the EU, while the European market gains access to high-quality New Zealand goods. As both parties move forward with the ratification process, the agreement sets a positive precedent for future trade agreements and reinforces the importance of international cooperation in fostering economic growth and prosperity.

 

When it comes to navigating the ever-evolving landscape of international trade, having a reliable and experienced partner by your side is crucial. Future Forwarding is your trusted ally in the world of shipping, offering a wide range of services tailored to meet your specific needs. With our expertise, global network, and commitment to exceptional customer service, we ensure that your goods are transported efficiently and securely to their destination. Reach out to us today to find out more.

Dockworkers on Strike in Germany

In the wake of a breakdown in negotiations between employers and the union,  12,000 dockworkers in the German ports of Bremerhaven,  Wilhelmshaven, and Hamburg have gone on strike. 

 

The workers’ demand is for a 14% increase including bonuses to offset inflation concerns and the offer for consideration from employers is a 12.5% increase to current pay, but over a two year span. Maya Schwiegershausen-Güth, ver.di’s chief negotiator, says they’re still ready to find a negotiated settlement, but not without a “real wage increase” for its members. She also said, “…against the background of the uncertain economic development the current offer was still insufficient.”

 

The Loadstar reports: “ The third ‘warning strike’ is the longest so far and will further aggravate port congestion at Hamburg’s container terminals where yard density already stands at an unproductive level of 90%. Moreover, ships idled in the German bight are stacking up with berthing delays, even before the stoppage, extending to up to 14 days.”

 

ZDS’s chief negotiator Ulrike Riedel rebutted that the action can no longer be called a warning strike. She went on to say that the strike has “damaged the international reputation and competitiveness of our ports and endangers the existence of many companies.” Although, one could argue it’s not the dockworkers’ responsibility to keep companies afloat. That responsibility rests solely on the shoulders of company leadership. 

Carrier Maersk says they have “decided to observe a full stoppage for rail, road and ocean freight for both import and export across our German terminals for the duration of the planned strike.”

Some carriers may be able to transload cargo from other ports, but congestion is already an issue at most alternative ports as well. 

Head of Kiel Trade Indicator Vincent Stamer says, “There is currently no end in sight to the congestion in container shipping. This is very unusual for the North Sea, while long queues off Shanghai have also been observed in the past, for example.”

 

Even after a settlement is reached, it’s going to take some time to untangle this supply chain snarl, especially with the already stifling port congestion as a contributing factor.

Biden’s Europe Trip Eases Trade Pains with Allies

This month, President Biden traveled to the UK, Brussels and Geneva on his first international trip since taking office in January. Among other purposes, the trip was billed as resolving transatlantic trade disputes, mending alliances, an affirmation of the American commitment to NATO, a chance to meet with the country’s closest political and economic partners and working to begin to create a coalition focused on investments G-7 member countries and elsewhere to counter China’s global ambitions in Asia, Africa and elsewhere.

 

His US Trade Representative, Katherine Tai, has been busy working with those member countries of both the G-7 and NATO (of which there is some overlap) on trade issues which have been simmering from both prior to and during the previous administration and were hampering efforts to forge this coalition.

 

Of greatest note for American importers and exporters are the suspended imposition of duties in the Digital Services Tax investigation and the suspension of duties in the large aircraft dispute, also known as the Boeing-Airbus subsidy – tit-for-tat tariffs that were imposed by both the US and EU on each other.

 

In January 2021, following comprehensive investigations USTR determined that the DSTs adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom discriminated against U.S. digital companies, were inconsistent with principles of international taxation, and burdened U.S. companies. 

 

The US was set to impose Section 301 duties on these six countries, but suspended the planned implementation for 180 days after a consensus was reached that the G20 and the Organization for Economic Co-Operation and Development (OECD) would take up the matter of minimum tax levels so as to prevent corporations from seeking the lowest taxation haven to the detriment of other countries around the world.

 

The lists of products from the UK would have included consumer items such as handbags, shoes, cosmetics and clothing to name just a handful. The suspension gives all parties the breathing room to complete a global agreement and, hopefully, the ending of this investigation and no need to move forward with the planned punitive 25% tariffs.

 

In advance of President Biden’s trip to Brussels, USTR Tai traveled out ahead of him and met with her European and UK counterparts. Within days came news that the US agreed in principle on both a way forward and a five-year suspension on the large aircraft subsidy duties in the Boeing vs. Airbus case from the World Trade Organization.  

 

Of bigger interest to U.S. companies should be the reaffirmation of The New Atlantic Charter agreed-to between President Biden and Prime Minister Boris Johnson. Both US and UK companies can look to this as the cornerstone for future transatlantic trade agreements, including a potential bilateral agreement directly between the two nations.

 

As an industry-leader providing eastbound and westbound logistics between the United States and United Kingdom, Future Forwarding is poised to take advantage of any improvements and strategic deals reached between these two nations. If your company does business between the US and UK or EU, speak to us today to learn more about our history and organization that features our own offices on both sides of the Atlantic benefits companies in the Southeast and the rest of the United States. 

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