Chamber News

EU Trade Commissioner Karel De Gucht has been in Moldova and Georgia this week to launch negotiations on establishing what he called Deep and Comprehensive Free Trade Areas (DCFTAs) between the EU and the two countries.

“I am confident that these negotiations will move ahead swiftly and pave the way to closer economic ties with the EU,” the Commissioner said. “The opening of negotiations confirms the EU’s commitment to deepen progressive economic integration and political association with our Eastern Partners.”

The Commissioner’s visit takes place ahead of the first negotiation rounds scheduled for 19-23 March (Moldova) and 26-30 March 2012 (Georgia).

The DCFTAs will be part of the Association Agreements currently being negotiated with Georgia and Moldova, which have the overall objective of significantly deepening political association and economic integration with these Eastern Partner countries.

They are very ambitious in nature, aiming to tackle trade obstacles at the borders and eliminating those behind the border. One objective is to bring legislation of its trade partners closer together with EU legislation in trade-related areas (this is the “deep” part of the deal).

In addition, the scope of the agreements is very broad, addressing matters that are considered fundamental to a modern, transparent and predictable trade and investment regime, such as competition, government procurement and intellectual property rights (hence “comprehensive”).

Both countries currently enjoy preferential access to the EU market through the autonomous lower import duties of the Generalised System of Preferences, with further incentives for good governance (GSP+ for Georgia) and Autonomous Trade Preferences (Moldova).

The future trade agreements will extend significantly beyond the scope of current co-operation, governed by the Partnership and Cooperation Agreements, in force since July 1998 (Moldova) and July 1999 (Georgia).

Progress achieved in dismantling barriers to the markets of six strategic economic partners – China, India, Japan, the Mercosur, Russia and the USA – has been described in a new report by the European Commission.

The second Trade and Investment Barriers Report highlights some success stories in the removal of certain trade barriers, such as in India, but also underlines the overall persistence of barriers for European business to access these key markets.

Dismantling these barriers would improve and open up new export and investment opportunities for European companies and people, the Commission argues.

“With protectionism an ever-present threat, we need to make sure that trade remains open in order to boost jobs and growth,” EU Trade Commissioner Karel De Gucht explained. “Today’s report shows that our enforcement strategy is paying off in fighting unfair barriers to trade and investment; yet, we need to strengthen our vigilance and double our efforts in order to make sure that openness is maintained worldwide.”

The latest report assesses the progress achieved on the 21 barriers that were identified in 2011 in the first edition.

It also identifies six new priorities: in China, the national security review mechanism for mergers and acquisitions involving foreign investors and export financing and subsidies; in India, the National Manufacturing Policy; in Brazil, the tax on industrial products (IPI) and import procedures for textiles and clothing; and in Argentina, the restrictions on reinsurance services.

The Trade and Investment Barriers Report is part of a broader enforcement strategy that aims to ensure that the EU’s trade partners abide by their commitments and maintain open markets.

The purpose of the report is to focus attention on efforts needed – including at the highest political level – to ensure market access for European companies in these important markets.

Click here for the full report.

HMRC plans to implement a change on 1 April 2012, bringing forward the due date for the submission of Intra-Community Trade Statistics (Intrastat) to the 21st day of the month following the month in which the trade occurred, eg data for April 2012 should reach HMRC by 21 May 2012.

Successive supplementary declarations will then need to reach HMRC by the 21st of the following month, or the last working day before then.

The South East was the UK’s biggest exporting region in 2011, with figures for that year hitting a record £42.8 billion, according to the latest Regional Trade Statistics from HM Revenue and Customs (HMRC).

A decline in export growth in the fourth quarter (Q4) meant however that the region recorded only 1.9% growth in 2011, enough to beat the 2010 record but the smallest increase of all the UK regions.

Lewis Scott, Regional Director for UK Trade and Investment (UKTI) South East, said that local firms need to rise to the exporting challenge if the region and the wider UK is to grow.

The latest figures show that the EU remains the most important export market for the South East, with a 12-month export value of £19.1 billion, followed by North America, Asia, the Middle East and North Africa.

Mr Scott said that UKTI could help firms to explore these markets by offering free one-to-one advice and support.

“We have just announced the winner of our Export for Growth prize, Crawley airport ground handling experts, Avtura Ltd,” he continued. “The high standard shown by the winner and the standard of entries in general demonstrates that there is a huge amount of creativity and innovation in the region.”

He called on other small and medium-sized firms to rise to the challenge to “Sell British” and to exploit the opportunities available to them.

A new Transatlantic service made its first call at Britain’s largest container port, Felixstowe, earlier this month as part of a link between northern Europe, the UK, a selection of US East Coast ports and Panama.

Operated by The New World Alliance Lines, the Americas Europe Express (AEE) service is the Alliance’s third transatlantic route complementing the two existing weekly services that also call at Felixstowe.

The service offers shippers competitive Westbound transit times (of eight days) between Felixstowe and New York.

The AEE service rotation is: Manzanillo (Panama), Charleston (USA), New York (USA), Rotterdam (Netherlands), Bremerhaven (Germany), Felixstowe (UK), New York (USA), Charleston (USA) and Manzanillo (Panama).

The Alliance of APL, Mitsui OSK Lines and Hyundai Merchant Marine (HMM) has deployed high-reefer-capacity ships on the weekly service with an average effective capacity of 3200 TEU (20-foot equivalent units, the standard measure of containers).

APL will supply three of the vessels deployed and HMM and MOL will contribute one each. As with the Alliance’s APX service that already calls at Felixstowe, Maersk Line will take slots.

The first Eastbound vessel is expected to arrive at the Suffolk port on 24 March.

BBCThree TV series ‘Be Your Own Boss’

Richard Reed, co-founder of innocent Drinks, has up to £1million that he is making available to entrepreneurs with brilliant business ideas. He wants to give the next generation of Great British entrepreneurs a helping hand in getting started.

To take part in this exciting new BBC Three TV series, you need to be over 18 and have either started a small business or have a great idea.

Apply for your slice of Richard Reed’s investment fund, up to £1m available Click Here

The application process is open for a limited time so if you’ve got a great business idea apply asap!

The International Air Transport Association (IATA) has announced that the Secure Freight programme has gained further recognition from governments around the world.

It has signed a Memorandum of Understanding (MOU) on expanding the Secure Freight pilot scheme, which began in 2010, with the Malaysia Civil Aviation Authority.

Meanwhile, in the UK, the Department for Transport (DfT) has also agreed to endorse the Secure Freight principles, which paves the way for further recognition of IATA’s efforts to build supply chain security capacity across the world.

The first authority to officially endorse Secure Freight principles was the Australian Office of Transport Security (AU OTS), last summer.

With Malaysia, Kenya, Mexico, the United Arab Emirates (UAE) and Chile agreeing to be co-signing authorities on IATA’s Information Paper on Secure Freight, which will be presented later this month, the Association is hailing a major step forward in building shared global standards for cargo supply chain security programmes.

The Secure Freight programme works across the whole air cargo supply chain, helping to secure shipments upstream by ensuring that cargo has come from either a known consignor or regulated agent.

Secure Freight evaluates the strength of a nation’s aviation security infrastructure and works with the civil aviation authorities to ensure that cargo is kept sterile until it is loaded.

Not only does this ensure greater security, IATA explained, it also helps prevent bottlenecks at airports.

The MOU was signed on the opening morning of the World Cargo Symposium in Kuala Lumpur, Malaysia. Nearly 1000 cargo professionals gathered to agree new solutions to deliver enhanced safety, security, quality and efficiency to the air freight sector.

The Community Channel has just launched a competition, in partnership with The Sunday Times to find The Social Entrepreneur of the Year.

The competition is calling for nominations for inspirational social entrepreneurs who are running a project or organization that is making a significant positive impact on the world around them by tackling or helping to reduce one or more social problems. It could be a person who runs an educational club, which takes young people off the streets and gives them a constructive and positive hobby or someone helping to provide local healthy food for the community by running communal gardens. In short we want to celebrate amazing and inspiring individuals who are coming up with innovative and enterprising solutions to tackle problems.

The winner of the competition will be featured in an interview in the Sunday Times newspaper, be showcased in a special episode of UK360 on Community Channel, a programme dedicated to sharing the most inspiring local stories from across the UK, will receive a raft of advice from communications professionals at the Sunday Times and be given a grant of £500 to further their work through digital media.

The Community Channel is a national TV station which has been running for over 15 years and is dedicated to untold and inspiring stories from charities and communities across the UK. Media Trust who own the Community Channel are a media charity and work to give people a voice and amplify the work of young people, charities and marginalised communities across the UK. Media Trust’s trustees include Mark Thompson (BBC), Sophie Turner Laing (Sky), Jon Snow and Matt Brittin (Google). Celebrity ambassadors they have worked with in the past include: Sir Trevor McDonald, Jesse J, Diana Vickers, Dizzee Rascal, Russell Brand, Martha Kearney, Adam Boulton, Jenson Button, Jon Snow and Miquita Oliver.

Click Here to apply.

If your heart sinks every time anyone mentions VAT, you’re far from alone!

However, one piece of good news is that the European Commission has put forward a proposal to make things more straightforward for international traders trying to grapple with the tax administrations in several different countries and in different languages.

If approved, this proposal should become reality in 2015.

For more details, please read the article below:

“Doing business in more than one Member State often means dealing with several tax administrations in different languages. Coping with multiple VAT obligations can accordingly be both burdensome and costly for companies. With this in mind, the European Commission has put forward a proposal which it sees as a first step towards a One Stop Shop for all electronically delivered services which, if approved, will benefit businesses from 1 January 2015.

As set out in last December’s Commission Communication on the future of VAT (COM(2011) 851), the One Stop Shop approach for EU trade across borders will be applied first to e-commerce, broadcasting and telecom services. In the future the Commission will seek to extend the concept on a gradual basis to other goods and services.

Since July 2003, such a system has been in place to simplify VAT obligations for non-EU suppliers of electronic services to EU consumers. The system has functioned well, the Commission argues, allowing non-EU traders who are liable to pay VAT in the Union to choose a single place for VAT compliance. Via this single electronic portal, a single VAT declaration and payment is submitted. On the basis of the information supplied, this payment is allocated automatically to the different Member States where VAT is due.

The VAT Directive (2006/112/EC) provides that, as from 1 January 2015, all telecommunications, broadcasting and electronic services are to be taxed in the Member State in which the customer is established or has his or her permanent address or usual residence, regardless of where the taxable person supplying these services is established. As the VAT becomes due where the customer belongs, this makes it necessary to broaden the current scope of the existing One Stop Shop system. Currently, a scheme is already in operation for non-EU businesses supplying electronic services. The scheme will now extend to both EU and non-EU businesses and – in addition to electronic services – will incorporate telecommunications and broadcasting services.

It will allow suppliers to use a web portal in the Member State in which they are identified to account for the VAT due in other Member States on supplies of these services to private consumers. Where a VAT return is incomplete or incorrect, is submitted late or the payment of VAT is late, any interest, penalties or any other charges due will be paid directly to the Member State of consumption.

The proposed measures only relate to those aspects (definitions, scope of the schemes, reporting obligations, identification, exclusion, VAT returns, currency, payments, records) for which a common understanding is needed before designing the IT systems. Other measures, notably relating to the determination of the location of the customer, will be proposed by the Commission at a later stage.

The intention is to extend the One Stop Shop to even more activities, including supplies of goods. The Commission has at this stage called on all Member States to agree to these measures in 2012 as a common approach is seen as key to designing the IT systems which will provide the necessary exchange of information between tax authorities in 27 Member States and to ensure its full implementation by 2015.

Algirdas Semeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, said: “The complexity of the current EU VAT system is an obstacle to doing business in the Single Market. The One Stop Shop will greatly facilitate cross border expansion of European start ups. This in turn will help to generate growth and jobs.”

The full text of the draft regulation, amending Regulation 282/2011 which provides binding rules on the application of certain provisions of the VAT Directive, can be found here.”

A client of the Colombian British Chamber of Commerce in Bogota, would like to offer their leather products and accessories to interested parties of importers or brokers within Norfolk.

They are looking to identify prospective buyers of leather handbags, wallets, key holders, leather files and much more, in order to introduce to new markets, an exotic range of accessories with ethnic designs and value-added features, from Colombia and Latin America.

The combination of using ancestral techniques for leather crafting with fabric embroidery harnessing modern quality control methods, means that these products are of the highest quality. These accessories represent a unique cultural identity whilst at the same time having the functionality required for today’s urban living.

Please take a look at their examples shown in the PDF below.

Anyone interested in learning more, please contact the International Trade Team on 01603 729711 or export@norfolkchamber.co.uk

Here’s an opportunity to visit China in May. The visit will include one-to-one meetings with companies in Zhejiang and Jiangxi, important manufacturing provinces around Shanghai where there’s a great need of expertise to improve efficiencies and the environment.

The programme, set out in the link below, has been tailored for companies in the following sectors:

• Automotive
• Cleantech
• Energy Management
• Light Engineering
• Lighting
• Manufacturing environment
• Product Quality
• Production Efficiency
• Water and Waste Management

Eligible SMEs can apply for a £750 Market Visit Support Grant that will offset the £750 participation fee for setting up the programme and meetings.

Interested? Please register initially by emailing Jean Knott at j.knott@uktieast.org.uk and we’ll arrange for you to receive further information.

Commenting on today’s Budget, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

“Never has there been a more important moment for the government to focus on British business and long-term, sustainable growth. The Chancellor’s commitments to contain the deficit and reduce corporation tax will be welcomed warmly by business. However, many small- and medium-sized companies will feel the measures overwhelmingly benefit the biggest businesses. Smaller firms will be disappointed George Osborne did not do more to support confidence and growth in the real economy.

“While there is a 1% cut in Corporation Tax, companies will still be hit with a 5.6% rise in business rates from April. In addition, businesses face lower allowances for investment in new plant and machinery in most areas, and will see no further incentives to create employment, particularly for young people. And while the Chancellor has reduced the cost of borrowing for some businesses, the problem of accessing finance in the first place remains, and will become more acute as the economy begins to grow.

“The Chancellor reiterated promises on reforming infrastructure, planning, employment law and boosting exports, which will provide enterprises with some reassurance. Business needs to see radical and meaningful delivery of these measures, from the overhaul of transport and broadband networks, to helping firms look for new markets overseas.

“The Chancellor today reasserted a real commitment to prudence. He also made an important rhetorical commitment to business growth. But we’ve heard much of this before. In the coming weeks, actions will speak louder than words.”

***For further comment on specific Budget measures see below***

Commenting on the new forecast published today by the OBR, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:

“We agree with the broad thrust of the new OBR forecast, although it is still slightly too ambitious. We share the OBR’s view that the UK economy returned to positive growth in the first quarter of 2012, and that there will be no double-dip recession. Growth will gradually improve from the middle of this year, and improve further in 2013 and 2014. However, more weight should be given to the risks of a setback in the eurozone and to possible distortions that could result from the Diamond Jubilee and the Olympics later in the year.

“We expect growth of 0.6% in 2012 and 1.8% in 2013, while the OBR predicts 0.8% and 2.0%. Furthermore, we believe that the OBR’s predictions for UK unemployment are still too low. The OBR expects the jobless rate to increase to only 8.7% of the workforce, while we expect it to reach 9%, given the time it will take for the private sector to absorb job losses in the public sector. We agree with the OBR that the deficit reduction plan is on course, and that the government should achieve its aim of eliminating the deficit around 2016.

“It is disappointing that British businesses were not given much help with cost pressures, such as the planned rise in business rates that should be scrapped. This is unsurprising though, given the higher than expected borrowing figures for February. We do, however, support the decision to finance additional tax cuts by introducing more spending reductions elsewhere. This will improve the competitive and productive potential of the UK economy.”

Commenting on today’s Budget, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

On business rates:

“The Chancellor could have used today’s budget to offer real relief to businesses struggling with next month’s 5.6% rise in business rates. Action to stop the great business rates robbery would have given many small- and medium-sized firms much greater confidence to invest and hire.”

On credit easing:

While credit easing is a step in the right direction, it is not a panacea for all the problems faced by businesses trying to access finance. The National Loan Guarantee Scheme will make some loans more affordable. But it will not help the smaller, younger, and high-growth firms that have trouble getting credit in the first place.

On the 50p tax rate:

“Business has long said that the 50p top rate of income tax is a disincentive to enterprise, to wealth creation, and to investment here in the UK. Most hard-working businesspeople will be glad to see the back of this counterproductive tax rate.

On Sunday trading:

“The government is right to make sure the UK economy sees the maximum benefit from the influx of tourists this summer for the Olympic and Paralympic Games. Longer opening hours will ensure retailers can benefit from tourist trade. This eight week period will serve as a useful trial to provide evidence as to whether the relaxation of Sunday trading rules on a permanent basis would provide a boost to the economy in the long term.”

On infrastructure:

“The BCC welcomed the Prime Minister’s announcements on road investment earlier this week, and we are pleased to see progress has been made in encouraging the UK’s pension funds to invest in UK infrastructure. However, this must be scaled up significantly over the coming months, and investments must be made swiftly in key projects in order to benefit business, growth and inward investment.”

“We have long championed the importance of the Northern Hub project, which will see capacity and speeds increased between Manchester, Sheffield, Bradford and Preston. The Chancellor’s announcements on this are welcome, but the government should go further and commit to funding the project in full. Only then will the real benefits start to be felt.”

On aviation:

“The Chancellor was right to acknowledge aviation capacity constraints in the South East. However, business will be hugely disappointed that publication of the Aviation Policy Framework for the whole of the country has been delayed until the summer. For all the government’s rhetoric, continued delay risks leaving the UK at a competitive disadvantage to its global trading competitors. While Britain dithers, others do.

We have long said that Air Passenger Duty is a significant burden on the business community, who need to fly to access markets and trade goods with the world. This is why we are disappointed to see the government press ahead with its planned double inflation rise from April. We are, however, pleased to see that the Chancellor is devolving the power to set the rate of APD in Northern Ireland to the devolved Assembly.”

On planning:

“The evidence from good businesses trying to expand consistently shows that the UK planning system is a brake on growth and jobs. The Chancellor is right to tackle the complexity, cost and inconsistency of the planning system and must not retreat from his commitment to radically simplify the planning system when he publishes the new National Planning Policy Framework next week.”

On youth employment and enterprise:

“We are disappointed that the Chancellor did not announce additional measures to incentivise businesses to employ more young people. While the freeze in the youth rate of the National Minimum Wage is a welcome step, an extension of the Youth Contract would have encouraged more companies to take on and train young people seeking to break into the world of work.

“We strongly support the Chancellor’s proposal to pilot a youth enterprise loan scheme, using a similar model to the student loan system. Young people wanting to jump into the world of business, rather than attend university, deserve support to make their ideas a success. Chambers of Commerce up and down the country stand ready to help mentor young people who want to take the leap into business and access this support.”

On incentives for local growth

“The announcements of Tax Increment Financing in England and new capital allowance provisions for Enterprise Areas in Scotland and Wales, after long and protracted delays, are very welcome. In the coming weeks, Ministers must focus on ways to create even more incentives to invest in these zones – and help businesses to power local growth in all areas of the country.”

On support for exporters:

“We are reassured by the Chancellor’s commitment to do more to help companies secure trade finance, and are working closely with UK Export Finance to ensure that all businesses that want to trade overseas get the help they need. Chambers of Commerce are the first place many businesspeople go when they start to trade internationally.”

On Enterprise Finance:

“The Business Finance Partnership and Enterprise Finance Guarantee are both schemes that can help businesses access finance, and the Chancellor’s announcement to expand them is a step in the right direction. It is important to remember, however, that the practical implementation of these initiatives will be the true test of their success. Finance products designed in Whitehall need to be rolled out effectively across the UK, and communicated effectively to businesses and investors, if they are to create real benefits.”

On the State Pension Age:

“Business will support automatic reviews of the State Pension Age, rather than the ad hoc rises that we have seen in the past. Employers’ main concern, however, is the vacuum that was left when the Default Retirement Age was removed in April 2011. As the State Pension Age rises further, this issue will only increase for companies across the country.”

On pensions:

“The single-tier pension announced by the Chancellor will make it clearer to individuals that private saving will benefit them in retirement. From October 2012, firms will begin auto-enrolling staff into pension schemes. This measure will give employers confidence that their contribution will not just subsidise the government’s means tested top-up, but will genuinely enhance the retirement of their employees.”

On Royal Mail:

“The Government’s action in taking on Royal Mail’s pension liabilities will finally allow the future of its essential services to be guaranteed. Even in today’s digital world, the post is an essential part of Britain’s business infrastructure – a universal service must be maintained.”