Belgium bolsters UK trade ties even as Brexit effect slows imports
Belgium has sought to shore up economic relations with the UK with a four-day trade ...
The UK recently concluded negotiations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or the CP-TPP, trade deal.
What is it and how can shippers and freight forwarders support their clients?
It is a free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
European countries were, until now, not included, and the UK will be the first country on the Atlantic to join.
The UK government is adamant that this agreement is beneficial to UK importers and exporters. UK importers benefit from a wider range of products to bring to the UK, while the country’s exporters have more markets to export to.
For those trading physical goods, the key benefit it threefold: market access; tariff reduction; and clear, predictable rules.
Market access means forwarders’ clients can get into markets easier. Customs processes are simplified and goods clear faster. Exporting to these markets offers UK products to a global audience of 500 million, with a purchasing power of almost 15% of global GDP.
But shippers and forwarders can benefit too: those wishing to offer shipping services in these markets should find it easier to set up a company in these markets, thus offering a full door-to-door service without the need to use third parties in CP-TPP nations. Instead, they can set up their own subsidiary with ease.
The big prize for UK exporters, however, is the customs duty reduction. The agreement will reduce 98% of customs duties to zero. Even a 1% to 2% saving can make a great difference to profit margins and entice exporters to begin more long term investments in trading regularly with CP-TPP countries.
A freight forwarder’s role is to support customers in this journey. Understanding the complex rules of origin and the provisions of diagonal cumulation, which is a bonus provision, allowing for more products from multiple CP-TPP countries to meet the origin criteria and therefore benefit from zero duties will be of particular importance.
In order to help customers meet take advantage of these new opportunities forwarders could offer training on rules of origin, or a guide on these matters, perhaps through a webinar with clients to talk them through the opportunities.
Forwarders have a role to play to support their customers in venturing into potentially new territory and show them they are their partner in leveraging the opportunities presented by CP-TPP, opening high growth markets in the world to them.
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