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The UK has signed a deal to join a trade pact with several countries in Asia and the Pacific, including Japan and Australia. The name of this pact (CPTPP) is a new club of 500 million people the UK will be able to access.

What is the CPTPP?

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trade agreement between 11 nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Between them, they generate 13% of the world's income. The UK is the first non-founding country to join, and will be its second biggest economy after Japan. It takes the value of the new grouping to £11 trillion.

What does it mean for the UK?

The short-term gains are marginal. The UK already had deals with the majority of these nations as part of its EU membership which have been carried over. Since Brexit, the UK has added Australia and New Zealand to its trade deal tally. It was just Brunei and Malaysia left that the UK didn't have a deal with and between them those two account for less than 0.5% of the total of UK trade.

Even with some changes to the trading arrangements with other countries, the gains from this alliance is expected to be fairly small - around 0.08% of GDP over 10 years, according to the government's best attempt at an estimate. However the Business and Trade Secretary likens CPTPP to a start-up, indicating the estimates do not account for the fact that some members - for example, Vietnam - are rapidly growing in importance in global trade.

By contrast, leaving the EU, the government's independent forecasters believe, will have reduced the UK's growth by far more - perhaps 4% of our income. In total, the CPTPP accounted for 8% of UK exports in 2019 - less than we sold to Germany.

What will change?

The key perk is greater access to each other's markets and a pledge to eliminate or reduce 95% of import charges or tariffs, although some are kept to protect sensitive domestic areas, such as Japan's rice farming industry. Also, manufacturers that get components from lots of different places can claim their products qualify for preferential treatment. That means they can tick the so-called "rules of origin" box, as long as 70% of those components come from any of the participating countries.

The provisions could help UK producers of items such as machinery and medicines (our most valuable exports to those nations) by reducing their costs and allowing them to expand their supply chains across the constituent countries. Away from trade, membership means investors from CPTPP countries get the same treatment as domestic firms when they put money into projects taking place in other member states, which could benefit UK firms.

In 2017, the CPTPP nations accounted for about £1 in every £12 of foreign investment in the UK, and the same going the other way - supporting business and jobs. In return, countries must co-operate on regulations, such as food standards. However, unlike the European Union, the CPTPP is neither a single market nor a customs union. So countries are not required to have identical regulations and standards. And countries can strike their own trade deals with others, as the UK has with the EU - although membership of the CPTPP would not be consistent with re-joining the EU itself.

What are the concerns?

What has the UK had to agree to as the price of admission? Some, including members of a House of Lords committee, want to know how the UK intends, for example, to ensure environmental and animal welfare standards will be met. The government has pointed out that CPTPP allows members to set their own levels of protection and it would not compromise the UK's standards.

As part of the agreement, the UK will grant Canadian farmers more access to UK markets - but hormone-treated meat will still be banned. It is conceding to lower tariffs on imports of Malaysian palm oil - which has been blamed for aiding deforestation. Those charges currently can be up to 12%.

Trade unions have voiced concerns that plans to encourage more investment could allow multinational companies to legally challenge British policies - although trade experts say this capacity exists in other trade deals, and hasn't ever been successfully exercised against the government.

What about the future?

The treaty will be scrutinised by members before coming into force, which could take at least a year. It is the partnership's potential that is key. The agreement will loosen restrictions on services and digital trade, which matches the UK's ambitions, and ties it in with some of the faster-growing nations. However the biggest rewards - and challenges - could occur if others join the club. China is among those vying to sign up, as is Taiwan.

Would the UK be able to veto China's membership or use its membership to shape China's access and ambitions? The real prize would be if the US reverses the decision made by President Trump not to sign up. America buys about double the amount of UK exports than the current CPTPP nations put together but membership doesn't appear to be on their radar at the moment. At present, membership of the CPTPP is a mainly symbolic win for post-Brexit Britain but ultimately it could yield considerable rewards.

These are the five main reasons why people import goods from abroad:

1. Availability: sometimes, certain goods may not be produced or available in sufficient quantities domestically. Importing allows people to access a wider variety of products and ensure a steady supply of goods that are in demand.

2. Price and cost efficiency: imported goods can be cheaper or more cost-effective than domestically produced alternatives. Factors such as lower labour costs, favourable exchange rates, or economies of scale in other countries can result in lower prices for imported goods.

3. Quality and specialisation: some countries excel in producing specific goods due to their expertise, technology, or access to certain resources. Importing these goods allows consumers to access higher quality products or products that are specialised and not readily available domestically.

4. Demand and consumer preferences: importing goods satisfies consumer demand for a wide range of choices. Consumers often seek variety, novelty, or specific brands that may not be available locally. Importing goods caters to diverse consumer preferences and enriches the range of products in the market.

5. Seasonal or perishable goods: importing allows access to goods that are not available locally due to seasonal variations or geographical constraints. For example, importing fruits or vegetables from countries with different climates allows consumers to enjoy fresh produce year-round.

New plans for post-Brexit border checks on goods coming into the UK could deter many EU suppliers and push up food prices. The government says its proposals will prevent delays by reducing the need for physical checks for many goods and will be a huge step forward for the safety, security and efficiency of our borders. But will this mean complex forms and costs involved to exporters? 

The plans, which have been delayed several times, are designed to introduce checks the UK is required to make under its Brexit trade agreement with the EU. Under the draft proposals published by the government there would be:

· testing of animal and plant products to protect against diseases such as African swine fever and Xylella;

· checks carried out away from ports to avoid the build up of traffic and significant delays;

· one digital system allowing the customs and regulatory process to be streamlined via a ‘single trade window’ allowing traders to submit information about goods;

· a pilot trusted-trader scheme for frequent importers;

· health certificates for animal and plant products from the EU by 31 October.

People opposed to these changes believe the complex rules and extra expenses will put off exporters. The government will spend six weeks consulting with businesses before publishing a final model for trade checks later in the year. We will have to wait and see what happens next.

It has been three years since the UK left the EU. Since then there has been a pandemic, the war in Ukraine and an energy crisis. That has made it hard to decipher exactly what the impact of Brexit has been. The latest data suggests a hit to the economy.

Trade

Since 2021 companies trading with the EU faced new rules, new paperwork and new checks on some goods. That prompted fears over what would happen to the £550bn of trade between the UK and Europe.

There was an initial dip in the amount the UK exported to the EU but after the initial teething problems, trade volumes recovered to pre-pandemic levels, according to official figures. However, it could be argued trade might have grown more if it hadn't been for Brexit.

When the British Chambers of Commerce surveyed 500 firms recently, more than half of them said they were still grappling with the new system. The red tape may have deterred some small exporters altogether and a study of customs classifications shows the variety of goods we export has diminished.

It is a similar story for imports. Volumes have recovered to pre-pandemic levels but academics at the London School of Economics say that the price of food imported from the EU (e.g. tomatoes and potatoes) rose as much as 6% over 2020 and 2021. That was before the recent jump in inflation.

On the plus side, it is now easier for domestic food producers to compete. Economists say they may have had a £5bn boost. Unfortunately though, trade hasn't bounced back post-pandemic as fast as it has in other major nations. ‘Global Britain’ has become less open and seems to be lagging behind.

Trade deals

Trade deals could help but it is still early days. In total 71 trade deals have been struck, which is swift progress, but the vast majority just replicate deals Britain had when it was part of the EU. The UK has signed new deals with Australia and New Zealand but they are only expected to deliver a tiny boost to trade and even that will take several years. They are also controversial - some UK farmers fear they will lose out.

Talks are still taking place with India and members of a trans-Pacific pact. They are taking longer than previous ministers had hoped but analysts think that taking things more slowly may actually lead to more beneficial agreements. Trade deals with some of the biggest players, such as the US and China, remain elusive.

Investment

How much businesses choose to spend on factories, training, equipment and technology, is also affected by our relationship with the EU. The chancellor acknowledges that investment can turbocharge growth but it has stalled since the referendum, as businesses remain wary of the outlook for the economy. Some have suggested that uncertainty surrounding Brexit, including the unsettled issue of the Northern Ireland Protocol, have deterred at least some spending. Others have suggested the cost of Brexit red tape have put them off investing in the UK.

Jobs

Leaving the EU also meant changes to the rules on the free movement of labour and the introduction of a points-based immigration system. Some companies are calling for the UK to let in more workers. A study by the think tanks Centre for European Reform and UK in a Changing Europe suggests that there are 330,000 fewer workers in the UK as a result of Brexit. That may only be 1% of the total workforce but sectors such as transport, hospitality and retail have been particularly hard hit.

A lack of workers has resulted in shortages and pushed up bills for customers, although some argue these constraints will persuade businesses to boost staffs' skills and invest more. Meanwhile, in the financial services sector, 7,000 jobs may have been lost, according to a House of Commons report, but that's far fewer than the 70,0000 previously feared.

What next?

All of the above adds up to an economy that has fared less well amidst the recent upheaval than its peers. The UK is the only major rich economy that remains smaller and poorer than prior to the pandemic and Brexit may be a factor. Overall, the government's independent watchdog, the Office for Budget Responsibility, thinks the UK will ultimately be 4% worse off than it would have been if we had voted no to Brexit. 

There still remains a lot to be settled. It is not just the Northern Ireland protocol but also permanent arrangements for industries like financial services, fishing and electric vehicle parts, cooperation on science and ways to reduce red tape. There are potential gains there and realising them is a matter of political as well as economic strategy.

Calling all UK exporters! If you need an EUR1 certificate we can produce this document for you in house.

What is an EUR1 certificate?

If you’re considering exporting from the UK with a country that has a trade agreement with the EU, you will need an EUR1. The EUR1 is a movement certificate that is needed to claim a preferential rate of duty (usually zero) when moving goods between the EU and the countries on the agreement list.

Why do I need an EUR1 certificate?

The EUR1 is part of the required customs documentation and must be presented to the customs office at the receiving country to benefit from a reduced rate of duty. Failure to produce it will result in a bill for the normal customs tariff.

What sort of goods are covered?

To qualify the goods have to originate in the UK or the EU or have been manufactured in a country with a trade agreement with the EU. You may be required to provide proof of this such as documentation relating to the manufacturing of the goods and the origin of materials.

Which countries have a trade agreement with the EU?

The countries with a current trade agreement with the EU include Albania, Algeria, Bosnia/Herzegovina, Ceuta and Melilla, Chile, Columbia, Egypt, Faroe Islands, Honduras, Iceland, Israel, Jordan, Lebanon, Liechtenstein, Macedonia, Mexico, Montenegro, Morocco, Nicaragua, Norway, Panama, Peru, Serbia, South Africa, Switzerland, Syria, Tunisia, Turkey, Ukraine, West Bank/Gaza Strip.

How do I get an EUR1 certificate?

We can create this for you if you are exporting from the UK. You’ll need to present supporting documents with your EUR1 application. These include a commercial invoice and evidence of the information given on the form – a packing list or shipping document, for example.

Do I need to keep it?

It’s best practice to keep all customs documentation for at least three years.

Where can I find out more?

You can find more information on import and export preferences, including a sample EUR1 form, at gov.uk.

If you haven’t got much importing experience then it can seem like a daunting prospect. There’s a whole lot to learn and understand. The consequences of getting it wrong could be costly.  When importing goods, you’re probably looking for two main things – the lowest costs and the quickest transit time. These both help your business run more smoothly and maximise your profits. However without experience and knowledge you can suffer from additional costs and delays. Since Brexit, rules have changed and keep changing so it’s important to keep up-to-date with the latest requirements. Read on for our top importing tips.

1. Understand shipping terms 

Most steps of the shipping process come with a cost – whether it’s transporting from the supplier to the port of origin or clearing customs at the destination. Someone needs to be responsible for each step and having a good knowledge of the process should mean less unexpected outlays. Make sure you know who is responsible for what every step of the way.  

2. Plan in advance 

Demand for space on cargo vessels varies throughout the year and covid has affected this. Planning is crucial. If you’re making promises to customers or planning certain events around a new shipment coming in, you need to ensure that you have sufficient time.  Shipping lines are dealing with backlogs, complications at every port, and severe equipment shortages. If you need things urgently, you’ll need to plan well in advance. Also, consider the time it can take once your shipment arrives. It can be a number of days before cargo is processed through ports and customs and is ready to collect.  Ultimately importing has a lot of variables attached, such as backlogs at ports, customs issues, or problems with the source supplier. The list of things that could go wrong is pretty extensive and the only way to avoid problems is to plan diligently. Regardless of the promises you receive from suppliers on the other side of the world, it pays to do your own research and work on realistic shipping times.  

3. Organise the right paperwork 

Good paperwork is the key for importing. It pays to understand the requirements in advance. Some examples of paperwork include commercial invoices, packing declarations, Health Certificates and a Certificate of Origin if dealing with a Free Trade Agreement country.  Having the right paperwork will save you money and ensure that your shipment isn’t held up at the destination port or even worse, re-exported. If you don’t have the right certificates, you can be hit with additional expenses. You may be able to claim that money back but this could be frustrating and time-consuming.  

4. Budget for additional customs charges 

Budgeting for all costs along the way is crucial to making a profit from importing. You need to understand the process to clearly plan your involvement and estimate your costs. There are also additional customs charges paid through your forwarder. Be sure to take these into account prior to ordering goods.  

Understanding all of the above will ensure your import process is successful, profitable and relatively stress-free. Good luck! We are here if you need us. 

We all know that UK grocery staples have increased in price recently but do you know why? These are the reasons why pasta, margarine, milk, sausages, coffee, crisps and toilet roll are all more expensive... 

Pasta

The key ingredient in pasta is durum wheat. About two-thirds of the world’s traded durum wheat comes from Canada and the extreme heat and drought that hit the country last year has affected the crops. Other countries have also produced lower harvests than expected. This has meant less supply, causing an increase in price. A 500g bag of supermarket own-brand pasta that cost about 55p in late 2020 is now typically 70p – a rise of more than a quarter. 

Margarine

Margarines contain rapeseed and palm oils. Rapeseed crops in Europe and Canada were hit by drought and high temperatures last year. Malaysia, a big producer of palm oil, imposed restrictions on foreign workers and on the number of people at work in the industry, in an attempt to tackle covid. These factors have reduced the supply and the rise in the price of crude oil has boosted demand for the oil crops for biodiesel.

The latest official inflation figures showed margarine and similar spreads had risen in price by more than 27% in the year to December 2021. On the supermarket shelves, a 1kg tub of margarine has gone from approximately £2.10 to £2.65 since last January. Meanwhile, the official figures showed cooking oils were up by 13%. 

Milk

Milk is costing more to produce. Probably the biggest factor is the cost of feeding cattle,   which has been driven up in part by the cost of fertiliser which, in turn, has been driven up by gas prices. Farmers have also faced rising labour costs and machinery prices. Consumers are typically paying 7p-10p more for a litre of milk.

Sausages 

An increase in the cost of processing meat and transporting it, is leading to higher supermarket shelf costs for sausages. Pork and beef farmers have been struggling due to labour shortages caused by covid and rising fuel costs. Abattoirs have faced problems replacing skilled EU workers who worked as butchers and packers but have left the UK because of Brexit.

Coffee 

Your caffeine hit is costing more as long-term issues around climate change combine with short-term problems caused by the pandemic. The wholesale price of Arabica coffee, used in ground coffees, surged 70% last year while Robusta, more commonly used in instant, jumped 60%. This is after one of the biggest producers, Brazil, suffered from a mix of droughts and the worst frost in over two decades.

The price of coffee has also been forced up by problems in global shipping. The cost of shipping a container soared 240% last year while concerns about securing deliveries prompted some buyers to stockpile. Brands tried to hold back those costs but they are now filtering through to the shelves. Almost 100 different coffee products rose in price in the supermarkets this month. Some packets of instant coffee have risen by as much as a third in price. 

Crisps

The price of some of the UK’s favourite crisp brands has shot up in the past year, varying from an approximate increases of 6-10%. This is due to a host of factors, ranging from increases in oil prices and energy costs, to the HGV driver shortages that have raised the price of distribution. The cost of producing potatoes is also on the rise, with every aspect, from labour, transport and fertiliser costs, up by more than 10%, as well as specific problems linked to Brexit. There still an unresolved issue on the trade in seed potatoes, which affects export to Europe and the import of European seeds.

Toilet roll

The rising costs of paper pulp, transport (due to HGV driver shortages and global sea freight charges) and energy has recently been affecting toilet roll manufacturers who will have to increase their prices for retailers and therefore consumers. Wood pulp prices have been driven up by shipping delays as well as changes in consumer behaviour that have boosted sales of paper products at home and demand for cardboard to pack home deliveries.