The Customs Watch is a comprehensive, up-to-date resource that delivers the latest updates on customs regulations, compliance requirements, and global trade developments. This essential tool is designed specifically for customs professionals, helping you stay informed about regulatory changes and manage trade risks effectively. Published weekly, Customs Watch is sent exclusively to PREMIUM subscribers, highlighting the importance of keeping you at the forefront of the industry.
Here are the news we were reading in September 2024
Global carbon pricing needed to avert trade friction, says WTO chief
The WTO Chief has highlighted the growing need for global carbon pricing mechanisms to avoid potential trade frictions, especially as nations adopt differing environmental policies. As carbon pricing becomes a key strategy to combat climate change, disparities in the way countries price carbon can lead to competitive imbalances and even trade disputes.
Some regions, particularly the European Union with its Carbon Border Adjustment Mechanism (CBAM), are pushing forward with carbon pricing schemes. The CBAM aims to level the playing field by charging imports based on their carbon footprint, ensuring that foreign producers don’t have an unfair advantage over local ones that must adhere to strict carbon regulations.
The WTO (World Trade Organization) sees a unified approach to carbon pricing as a way to avoid creating a patchwork of policies that could complicate global trade. Without harmonized carbon pricing, there’s a risk that countries might impose trade barriers or tariffs, creating friction in global commerce. These barriers could disadvantage exporters from regions with less stringent carbon regulations, potentially leading to disputes and protectionist measures.
A global carbon pricing framework would promote fairness and efficiency, ensuring that all countries contribute to reducing carbon emissions without harming the global trade system. However, reaching a consensus on such a framework would be challenging, given the varying levels of development and economic interests across countries. Developing nations, in particular, may be hesitant to adopt stringent carbon pricing measures without support, as it could hinder their economic growth.
The WTO’s call for cooperation on carbon pricing aligns with the growing urgency to address climate change, while also ensuring that trade remains a tool for economic development rather than a source of conflict.
EUDR: Cameroon to share cocoa location data to meet EU environmental rules
This is a prime example of how a local cocoa and coffee association, along with six exporters, is proactively leveraging the EU Deforestation Regulation to gain a competitive edge. The newly established platform, managed by Cameroon’s Cocoa and Coffee Interprofessional Council, will enable EU buyers to verify the origin of cocoa beans and ensure compliance with the new rules. Similar initiatives are emerging in Ivory Coast, and more are expected, as major changes often create opportunities, while inaction can lead to setbacks. Meanwhile, Czech authorities have requested a delay in the EUDR's implementation, citing difficulties in estimating its impact on companies and supply chains and calling for more time and tools to facilitate compliance. Within less than 100 days of the regulation's implementation, businesses should assess their readiness and reach out to Customs Manager Ltd (Schedule a free call at www.customsmanager.org -> Book Expert Call) if they need assistance with preparations. Article here
EU Rejects Chinese EV Makers' Effort to Avoid High Tariffs
The European Commission has turned down proposals from Chinese electric vehicle (EV) manufacturers to adjust the pricing of their allegedly subsidised vehicles to avoid hefty tariffs. The Commission dismissed the offers as insufficient as it continues its investigation into claims that China is unfairly supporting its EV industry through state subsidies, distorting market competition in the European Union.
The rejection signals the EU's firm stance on protecting its domestic industries from what it perceives as unfair trade practices. Chinese EV makers, who have rapidly expanded their presence in Europe, are now facing the possibility of steep tariffs if the EU confirms its findings of state-backed pricing strategies. The decision could escalate trade tensions between the EU and China, adding complexity to an already sensitive economic relationship. Article here
WTO Chief Urges EU to Reconsider Ban on Deforested Goods
Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO), has called on the European Union to revisit its regulations on banning deforestation-related goods. Her remarks amplify growing pressure from key exporters, including Brazil, wh are urging the EU to reassess its strict rules.
The EU's deforestation regulations, aimed at curbing imports of products tied to environmental degradation, have faced criticism from exporting nations. Brazil, a major agricultural producer, argues that the rules could disrupt trade and disproportionately affect its economy. Okonjo-Iweala’s appeal underscores the delicate balance between environmental protection and global trade, urging the EU to consider the broader implications of its policy on developing economies reliant on exports.
The call to reassess the rules reflects ongoing debates about sustainable trade and the challenges of enforcing deforestation-free supply chains equitably for all parties involved. Article here
Germany’s Scholz Seeks Delay on New EU Anti-Deforestation Law
German Chancellor Olaf Scholz is pushing to postpone the EU's new anti-deforestation law. The move comes amid lobbying efforts by a German media group advocating against the legislation, citing concerns over its potential impact on businesses and trade. Scholz’s call for a delay adds to the growing debate within the EU over the balance between environmental protection and economic interests. Article here
BusinessEurope's Call for a Renewed EU Trade Agenda
BusinessEurope has issued a new position paper urging the EU to revitalise its trade agenda in the upcoming legislative cycle. Markus J. Beyrer, BusinessEurope's Director General, emphasised the need for a proactive, creative, and forward-thinking trade strategy.
Key Recommendations:
Diversification Strategy: The EU should shift from a defensive approach to developing a robust diversification strategy. This includes crafting a range of bilateral arrangements tailored to different partners.
New Trade Arrangements: The EU should pursue various types of agreements, including:
Comprehensive trade agreements
Sector-specific agreements
Partnerships in digital, critical raw materials, and regulatory cooperation
Initiatives under the Global Gateway: These arrangements should be adapted to the developmental status of partner countries and include flexible ‘cumulation of rules of origin’ provisions.
Transatlantic and China Relations: Strengthening ties with the US and China is crucial. For the US, reducing business costs through mutual recognition agreements on conformity assessment is recommended. With China, the EU should balance assertiveness in protecting economic interests with continued engagement on foreign policy, trade, and investment.
Commitment to the WTO: The EU must remain dedicated to the World Trade Organization (WTO) and work towards its continued relevance and effectiveness, as it provides a vital rules-based framework for global trade.
For a detailed read, you can access BusinessEurope’s full publication here
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