Ahead of the World Trade Organization’s (WTO) public forum next week, and its search for ways to reglobalise trade in a fractious era of geopolitical tensions, many countries are providing the talking points. From chipmaking equipment to canola oil, export controls are new anti-dumping investigations are hitting the headlines this week.
Closer to home, the Chartered Institute of Export & International Trade's Director General Marco Forgione met with Minister for Trade Policy and Economic Security Douglas Alexander yesterday. The two discussed priorities for the UK trading community, relationships with key trade partners and how industry and government can work hand-in-hand on the government's industrial and trade strategies.
The big picture: This week has seen significant for trade controls, with several countries making major moves to restrict exports, citing both financial and security rationales.
Dutch firm ASML has taken back oversight of the licencing process for its chipmaking equipment, Reuters reports. Previously the US had taken unilateral control of restrictions surrounding semiconductors in its bid to prevent China’s technological advances in AI and military tech.
The impact of climate change on sugar cane production is set to hamper exports. Brazil, the world’s top supplier, has experienced drought this year, while India is also expecting lower output. Reuters reports that India has announced a timed ban to coincide in a drop in sales from Brazil.
Good week/bad week: A fresh wave of hope for the EU-Mercosur trade deal? As negotiators are set to meet for the first time in five months in Brasilia, the FT reports that 11 EU countries have put on a united front in support of a deal.
Writing to European Commission president, Ursula von der Leyen, a cross-party group of leaders including German chancellor Olaf Scholz wrote that the bloc needs to gain traction in South America before other powers build influence.
“Without the conclusion of the agreement, other powers would gain an even stronger influence on Latin American markets, both economically and politically.
“Over the past 10 years, European companies lost 15% market shares on average in the region.”
A bad week for Japanese Nippon Steel, after Reuters reports that the US government sought to block its US$14.9bn acquisition of U.S. Steel.
The Biden administration told the firm that deal poses national security risks, per a letter from the Committee on Foreign Investment in the United States (CFIUS) that warned it would also damage American steel production and make the firm less likely to push for trade remedies.
Nancy McLernon, head of Global Business Alliance, a body representing multinational firms operating in the US, told the FT:
“Unfortunately, both sides of the aisle seem to view blocking this deal as a smart political move in an election year.
“However, it’s workers in Pennsylvania and ultimately the country that will pay the price for this shortsighted stance.”
Earlier in the year, US Steel warned that thousands of workers could lose their jobs if the deal failed to go ahead.
Shigeru Ishiba, a favourite to become next Japanese prime minister after incumbent Fumio Kishida said he would step down at the next election, described the decision as “very unsettling”, adding that recently the US has been “tending to impose deals and threats even on its allies”.
How’s stat? $6 an hour. That’s the cost cloud providers charge to use a server running on eight of Nvidia’s advanced A100 processors – in China.
The FT reports that its cheaper for tech firms to use such servers in China than in US, where rates are typically US$10 an hour. This is despite US export controls introduced in later 2022 that prevents the firm exporting its powerful A100 and H100 chips to China.
The week in customs: The Department for Environment, Farming & Rural Affairs has made changes to how traders will be notified if some sanitary and phytosanitary (SPS) are selected for inspection at the UK border.
Those moving goods classed as products of animal origins (POAO) or whose goods were transiting through multiple countries to reach the UK, can now be notified via the Goods Vehicle Movement Service if those good are inspected.
Quote of the week: “Once we receive further clarity, the delay allows the industry to understand specifically what the government is asking for, to manage with European partners in a timely manner, and it will minimise the confusion and ultimately minimise the cost to industry and the cost to consumers.”
Fresh Produce Consortium chief executive Nigel Jenney, welcoming a reported delay to the introduction of border checks on fruit and vegetables imports, amid suggestions they’ve been pushed back from January to June 2025.
What else we covered this week: We began the week with a Trade Insights looking at the selection process for EU commissioners, as re-elected EC president von der Leyen receives nominees for each portfolio.
There was also a look at the trade news from each of the UK’s devolved regions with expert input from the Chartered Institute’s head of UK nations and regions, Paul Brooks,
Following China’s decision to restrict exports of antimony, this week’s Commodity in Focus explored the history of the critical mineral and the financial implications of the new controls for traders.
True facts: Canadian Canola is the latest argi-product to feel the sting of a China anti-dumping probe, following the conclusion of investigations into French brand import and the launching of probes into EU dairy and pork.
Also known as rapeseed, canola is most commonly produced for use as a cooking oil, with additional uses as animal feed, processed foods and an emerging biofuel market.
Canada, the world’s largest exporter, sells around 90% of its canola overseas, with the US its largest export market, followed by China. The Canola Council writes that 50 countries globally import canola seed, oil and meal from Canada.