With one of the world's major annual trade policy events just around the corner, we take a look at ongoing EU-China discussions, the struggles of the Australian mining sector and UK trade trends as part of today's look back on the week in trade.
The big picture: Ahead of the World Trade Organization’s (WTO) 13th Ministerial Conference (MC13) next week, China and the EU have been discussing their trading partnership. As ever, the event has been dogged by criticism for its perceived inaction on a number of topics.
It’s been a week of sputtering trade deals for the UK, with the Canadian government doubling down on its insistence that talks are off the table, while there have been calls for a parliamentary vote on the UK’s formally joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) over doubts around the purported benefits.
Good week/bad week: A win for the status quo on behalf of the City of London. According to a Politico report, the UK’s financial hub will retain the bulk of its EU payment-processing with London clearing houses continuing to handle transactions. This follows ongoing post-Brexit concerns that the “plumbing” of finance would be redirected to Germany. Politico quotes one city worker as saying: “The picture is far from rosy, but it's much better than what we thought or what we could have expected”. A rousing victory speech.
It's not been a good week for Australian nickel though. Reuters reports a combination of inflation wage hikes and Indonesian innovations in production have made the industry much less competitive. Production expenses come in at $17,000 per tonne, 28% higher than the output of Indonesia’s Morowali mine. Commentators question, however, whether the $4bn fund which the industry can access now that nickel has been added to Australia’s critical mineral list will be enough to turn the situation around.
How’s stat? 18% - how much more exposed a worker in the 90th decile is to trade in 2019, compared to 2000. One of the many stats revealing how trade is increasingly impacting service professionals over those in the manufacturing sector, according to a Resolution Foundation report.
The week in customs: HMRC has issued further guidance regarding Border Target Operating Model (BTOM) customs declarations. From 15 March, full customs declarations or a simplified declaration – if you’re authorised to submit them – will be required for:
— High-, medium- and low-risk animal products, and high-risk food and feed of non-animal origin from EU and European Free Trade Association (EFTA) countries
—High-, medium- and low-risk plant and plant products from EU countries, Switzerland and Liechtenstein
This reflects the reclassification of these goods as controlled under the new rules.
Quote of the week: “[The EU is] an important force in the multi-polar pattern. As long as China and the EU strengthen solidarity and cooperation, bloc confrontation will not arise.”
A measured response from China’s foreign minister, Wang Yi, on the ongoing trade disputes between the EU and China, as he spoke to Spanish prime minister Pedro Sánchez in Madrid earlier this week.
Major milestones: Saturday (24 February) will mark two years since Russia’s invasion of Ukraine, an occasion the UK is marking with a fresh round of sanctions following the death of imprisoned opposition leader Alexei Navalny, this time on the heads of the penal colony where he was held.
However, implementing the sanctions is proving to be more challenging as illustrated by a survey of Japanese businesses this week. Of the 63 companies that responded to the survey (of 156 that were asked) only 60.3% have partially or fully suspended business in Russia, which is a decrease of 5.9 percentage points on the previous survey in May 2023. The number of companies doing "business as usual" increased four percentage points to 34.9%.
What else we covered this week: William Barns-Graham covered the latest parliamentary hiccup concerning the UK’s accession to the CPTPP.
Benjamin Roche took a look at trade news from Latin America.
Phil Adnett looked at liquified natural gas (LNG) in his regular Commodity in Focus feature.
True facts: Another significant date for Ukraine – it’s been a decade since the impeachment of former president Viktor Yanukovych. Yanukovych incited widespread protests when he unexpectedly pulled out of an EU partnership deal. 88 people died during the protests. Yanukovych fled the country shortly after agreeing to a deal on new elections, and was subsequently accused of embezzlement.