Hong Kong trade opportunities

17/09/2013

By Daniel Hunter

A London design and software firm has joined Hugo Swire, Minister for the Foreign and Commonwealth Office, in encouraging UK firms to take advantage of new trade opportunities in Hong Kong.

Keepthinking, with the help of UK Trade & Investment (UKTI) London, is already benefitting from a three-year contract in May worth almost £400,000 ($4.8m HKD) to design and deliver the website for the new West Kowloon Cultural District in Hong Kong.

After taking part in a UKTI London-led trade mission in May, Founder and Managing Director Cristiano Bianchi recognised the opportunities Hong Kong offers to a firm with Keepthinking’s expertise in digital design and software development for the museum and cultural sectors.

“Hong Kong has a wealthy and dynamic younger generation who is looking for something else that isn’t shopping. Their cultural needs have been somehow neglected and there is a massive heritage that is ready to be exploited," he explained.

"There are amazing collections in the current museums and galleries that aren’t displayed or even managed to their full potential and the differences with western capital cities are striking.

“In London, the number one tourist destination is the British Museum – you would not go to a museum in Hong Kong as you don’t even know they exist. Their museums and arts spaces are not promoted in the same way as the UK, which is partly why this project is in development."

Keen to expand on Keepthinking’s UK and US business, Cristiano attended a UKTI trade mission to the Asian Attractions Show in Hong Kong. As part of the visit, he had access to daily networking receptions, attended market briefings and met high-profile contacts.

“I wanted to find out what opportunities were available to us in Hong Kong. We did some background research and checked out the cultural space before going. UKTI London helped us to prepare for the visit and ensured that we met with senior people in the cultural services in Hong Kong,” said Cristiano.

http://www.internationaltrade.co.uk/news.php?CID=&NID=2474&Title=Hong+Kong+trade+opportunities

New patent law expected to boost export links

By Daniel Hunter

UK small to medium-sized enterprises (SMEs) are expected to grow into Europe with the introduction of a new law which allows businesses to protect intellectual property across the entire EU, according to Andrew Walker, corporate partner at law firm HBJ Gateley.

The new legislation, which will come into force in January 2014, establishes a pan-EU patent law and specialised EU patent court which will help companies and inventors protect their patents across the EU while avoiding multiple litigation cases in differing legal jurisdictions.

It will replace the current system in which innovations have to be patented in each disparate legal jurisdiction, which can be extremely complex and incur significant costs.

Andrew said UK businesses with aspirations to grow across the EU or with technology which is patentable and used across the EU would be attracted by the prospect of quick and cost-effective patent protection throughout the whole EU area. According to HMRC, UK trade with the EU was worth £149.8 billion in 2012, compared with £158.2 billion in 2011.

“There’s never been an EU-wide patent before, so this represents a major change in how companies trading in the EU can protect and defend their IP," Andrew said.

“If you’ve invented a new mobile phone feature, for example, and wanted to launch it across a number of different countries in the EU and have patent protection in those countries, up until now you have had to register patents in every single country. That not only takes a lot of time but it can end up being very expensive, and it can also delay the process of protecting your intellectual property which could allow a competitor to beat you in the ‘race to register’.

“Under the new EU patent, UK SMEs are now in the much more favourable position of being able to protect their inventions across the EU in a single application. This will no doubt provide added reassurance to inventors and businesses in what is becoming an increasingly global market.”

Together with the recently introduced UK Patent Box legislation which, among other things, offers a hugely reduced (10%) corporate tax rate on profits from patents, UK-based companies are now in a much more favourable position when it comes to taking advantage of their in-house patent creations.

The change in legislation will also significantly streamline litigation for those companies which need to defend their patents across the EU, allowing a central court to make decisions applicable across all 25 European Union countries. However, Andrew warned any litigation process, whether centralised or not, is likely to be expensive and might still involve hiring more than one legal representative.

Andrew added: “Litigation is expensive whatever the circumstance. This legislation will make it easier and somewhat cheaper for companies which find themselves in court over EU patent issues and I’d always advise anyone who’s keen to defend their intellectual property to apply for the broadest protection possible.”

Trade protectionism still on rise across the world

Brussels, 09/02/2013
Global efforts to battle trade protectionism need to be reinforced to help shield the fragile economic recovery across the world. In a report released today, the European Commission identified about 150 new trade restrictions introduced over the last year, whereas only 18 existing measures have been dismantled. A total of almost 700 new measures have been identified since October 2008, when the European Commission started monitoring global protectionist trends.
Although the trend is slower than it was in 2011 and 2012 and despite signs of a recovery in the global economy, there has been a worrying increase in the adoption of certain highly trade-disruptive measures.

"All of us need to stick to our pledge to fight back against protectionism. It is worrisome to see so many restrictive measures still being adopted and virtually none abolished," said EU Trade Commissioner Karel De Gucht. “The G20 agreed a long time ago to avoid protectionist tendencies because we all know these only hurt the global recovery in the long run."
Trade protectionism is an important point on the agenda of the G20 Summit taking place in Saint Petersburg on 5 and 6 September 2013.
Main conclusions of the Report

• There has been a sharp increase in the use of measures applied directly at the border, especially in the form of import duty hikes. Brazil, Argentina, Russia and Ukraine stand out for having applied the heaviest tariff increases.
• Measures forcing the use of domestic goods and relocation of businesses have continued to spread, especially in government procurement markets. Brazil accounted for more than one-third of restrictions related to government procurement, followed by Argentina and India.
• The EU's partners have also continued applying stimulus measures, in particular supporting exports. Some of them took form of comprehensive, long-term and highly competition-distorting policy packages.
• Some countries continue to shield some of their domestic industries from foreign competition to the disadvantage of their consumers and other industry sectors. Brazil and Indonesia provide the most striking examples of this approach.

Background

The 10th “EU Report on Potentially Trade-Restrictive Measures" provides the latest state of play regarding potentially trade-disrupting measures implemented by the EU's main trading partners between 1 May 2012 and 31 May 2013. The European Commission's Directorate General for Trade prepared the Report with the support and approval of the EU Member States. Reporting activities started in October 2008 after the outbreak of the economic and financial crisis. Their objective is to take regular stock of the extent to which G20 countries comply with their commitment – made initially at the G20 Summit in November 2008 in Washington DC – not to resort to trade restrictive measures and to remove those in place without delay. The EU is firmly committed to this pledge. Its own current report complements and confirms findings of the monitoring report issued by the WTO in cooperation with UNCTAD and the OECD on 17 June 2013.

The report covers 31 of the EU's main trading partners, including the G20 countries. These are: Algeria, Argentina, Australia, Belarus, Brazil, Canada, China, Ecuador, Egypt, Hong Kong, India, Indonesia, Japan, Kazakhstan, Malaysia, Mexico, Nigeria, Pakistan, Paraguay, Philippines, Russia, Saudi Arabia, South Africa, South Korea, Switzerland, Taiwan, Thailand, Turkey, Ukraine, USA, and Vietnam.

Source: www.internationaltradenews.com

Business Secretary suspends 49 export licences to Egypt

By Daniel Hunter

On 21 August 2013, in response to the increasing levels of violence in Egypt, the member states of the European Union agreed to suspend all export licensing for equipment which might be used for internal repression. Following advice from the Foreign and Commonwealth Office, the Department for Business, Innovation and Skills has suspended 49 extant licences.

This suspension applies to licences for the Egyptian Army, Air Force and internal security forces or Ministry of the Interior. It applies to applications for new licences as well as extant licences and will continue until further notice.

Business Secretary Vince Cable said:

The UK position is clear: we will not grant export licences where there is a clear risk that goods might be used for internal repression. The government takes its export responsibilities very seriously and operates one of the most rigorous arms export control regimes in the world.

We have already taken action to restrict exports to Egypt. As a result of the developing situation in Egypt, we have agreed with EU partners in this instance to go further and suspend all export licences for goods which might be used for internal repression. By acting together, we want to send a clear signal that we condemn all violence in Egypt.

This suspension will be kept under review until such time as conditions in Egypt indicate that it is appropriate to lift these restrictions.

In July 2013, five licences were revoked to Egypt after the government assessed that they were inconsistent with internationally recognised criteria used to assess export licences - specifically concerns about the potential for exports to be used for internal repression. The licences were for small arms/firearms components, armoured vehicle components and communications equipment.

The 49 licences now suspended cover a wide range of equipment, including spares for helicopters and aircraft, specialist software and communications equipment.

Source: www.internationaltrade.co.uk

Uncompetitive imports call for relook at India's China trade policy

KOLKATA: Is India enriching China and allowing it to occupy our land?

A study shows India pays more for goods from China that it could buy from elsewhere at a lower price since the era of cheap Chinese goods appears to be coming to an end. The land of dragons has struggled to keep its cost competitiveness going because of rising wages, land prices and taxes. The ascent of the renminbi or yuan has also made the world's largest manufacturer more expensive. The Sino-Indian bilateral trade took off during the last decade to nearly $70 billion (about 4.2 lakh crore) at the end of 2012 and is expected to touch $100 billion (about 6 lakh crore) in 2015. It certainly looks impressive, but the magnitude of uncompetitive imports calls for a relook at the bilateral trade policy, argues Prof SK Mohanty, who did a study on Sino-India trade relationship on behalf of the Reserve Bank of India

The volume of uncompetitive imports from China rose from $4.49 billion in 2007 to $7.15 billion in 2008, but declined to $6.6 billion in 2009. The relative size of this to total imports was very high, ranging from 18.6% in 2007 to 25.4% in 2008. In fact, nearly one-third of 3,876 items imported by India in 2009 proved costlier.

"It is a matter of concern as the share of uncompetitive products in total is increasing over a period of time. They are both in terms of the number of products imported and also in value terms," says Prof Mohanty of Research and Information System for Developing Countries in the study titled 'India China Bilateral Trade Relationship'.

Uncompetitive imports are concentrated in four sectors -- chemicals, textiles, base metals and machinery with about 75-80% share of total uncompetitive imports during 2007-09. Imports of minerals, plastics, gems & jewelleries, and automobile parts from China have also turned out to be uncompetitive. The combined share of these eight sectors exceeded 93% of total uncompetitive imports during 2007-09.

Many believe the rising labour cost in China is to be blamed primarily. In fact, China is gradually withdrawing from the lower end of the textile sector, and if the trend continues, the production base of textiles and clothing will slowly shift to other countries, as has been the case with the textile industries of a number of East Asian countries in the past.

This could prove a blessing for India which has a large textile sector. Prof Mohanty suggests India should start preparing itself by getting into partnership with foreign firms to establish production centres on its shore for mass production of garments. "The Chinese phase-out from the garment industry may be an opportunity for India to replace it in the global market in a phased manner."

The automobile industry both in India and China has expanded rapidly during the last two decades and India enjoys a competitive edge in auto components, small-cars and two-wheeler segments. However, the study showed that India's imports from China in these product segments are turning out to be uncompetitive, and imports of these products can be managed efficiently from other competitive suppliers. India is also emerging as competitive player in the niche area of auto designing, which is related to the IT sector.

These trends indicate Indian firms can venture into the Chinese market in certain segments though they are likely to face strong competition from various domestic firms and also from other foreign competitors. The distribution of uncompetitive imports was skewed across various technology intensive sectors. While uncompetitive import growth was 43% per annum for medium-tech, similar estimates for the high-tech sector was 102.2% during 2007-09. India's imports in these two sectors are likely to grow in future in view of the current emphasis on industrialisation as discussed in the country's new manufacturing policy.

As an emerging country, India's import of intermediate products has been important for fostering industrialisation, meeting domestic demand and addressing its export needs. India is likely to gain from its engagement with China, but a realignment of the product basket may be needed to preserve India's long-term interests. This requires restructuring of India's domestic and external policies in the first place.

Source: economictimes.indiatimes.com

British companies look to emerging markets for growth

By Daniel Hunter

Asia has over-taken the European Union as the market in which exporters expect to see the most growth over the next five years, new research from the Institute of Directors (IoD) and the All Party Parliamentary Group on Trade and Investment reveals.

The report, launched yesterday (Tuesday) in the Houses of Parliament, also shows that Asia has moved ahead of North America as a destination for UK exports.

The report presents the findings of a Policy Voice poll of 1,162 IoD members which ran from Wednesday 14th November until Friday 23rd November 2012.

Key Findings

EU is still the top destination for exports…

The European Union remains the market in which most IoD members are active. However, the percentage of IoD members trading in the EU is falling (from 84% to 82% between 2010 and 2012), whereas the percentage in Asia is on the rise (from 39% to 47%). The EU was the only market to see a decrease in activity, with strong growth in the Middle East in particular (38% in 2010 to 44% in 2012). For the first time, IoD members are more likely to trade in emerging Asian markets than with the mature markets of North America (47% to 46%).

…but businesses expect faster growth elsewhere

Asked which markets they expected to deliver export growth over the next five years, Asia came out top, with 50% of IoD exporters optimistic about their prospects there. Compared with two years ago, members are far more pessimistic about future trade with Europe. Only 43% anticipate their export activity to grow in the EU over the next five years, a fall from 58% in 2010.

Exporting remains difficult for small businesses

In order to reduce our trade deficit, more businesses must be encouraged to export. The survey reveals that 57% of IoD members export, considerably higher than the national figure of 31%, indicating that there is scope for more UK companies to begin exporting. Half of members gain less than a third of their turnover from exports, showing that there is also significant potential for expansion by existing exporters.

However, the risks associated with exporting still put off small companies. 35% of businesses said their organisation was just too small to export. Worryingly, 72% of companies which had never exported said they had no plans to do so.

Commenting on the research, Alexander Ehmann, Head of Enterprise Policy at the IoD and author of the report, said: “Given the on-going troubles in Europe, it is perhaps not surprising that exporters are looking to emerging markets for growth. Expansion into new markets is critical if the UK is to address its truly alarming trade deficit. Policy-making should focus first on encouraging those firms for which export activity is only a small part of their business to expand to greater levels.”

Margot James MP, Chair of the APPG on Trade and Investment, said: “I’m delighted that the APPG and the IoD are able to contribute to the debate around Britain’s international trade activity and pleased by the positive conclusions in this report. Growing exports is fundamental to the success of the government strategy of re-balancing the economy, and it is our job to help remove the barriers facing exporters whilst also working to encourage more of our world class British businesses to take their products and services abroad.”

|International Trade News|

UK targets Brazilian market for automotive sector growth

By Daniel Hunter

British businesses in the automotive sector were given a boost when the Business Secretary confirmed the opening of a new Vehicle Certification Agency (VCA) office in Sao Paulo. The VCA office will allow manufacturers in the auto sector to export more easily to emerging markets in South America.

Automotive exports from the UK are at an all time high, with five out of every six cars produced in the UK being exported. Brazil has been identified as an important growth market for the sector.

The government is determined to build on the success of the automotive sector and is aiming to publish its automotive strategy in the summer. Ahead of this, the government has taken the decision to open a Vehicle Certification Agency (VCA) office in Sao Paulo, the first to be opened in Latin America.

VCA offices support the automotive industry by verifying that cars and parts imported into local markets from the UK and elsewhere, comply with EU Directives and Regulations, as well as UN environmental and safety standards. The VCA office in Brazil will also allow manufacturers based locally to export from Brazil to the wider region, opening up new markets and further benefiting the UK economy.

"I want to make it as easy as possible for the automotive manufacturers to export to emerging markets," Business Secretary Vince Cable said.

"UK manufacturers are planning to more than double their sales in Brazil in the coming years. By opening a VCA office in Sao Paulo we can make sure exports are not being held up unnecessarily."

Mike Baunton, Interim Chief Executive of the Society of Motor Manufacturers and Traders said: "We are delighted the UK government is taking steps directly to support the export of UK built vehicles, particularly with Brazil being one of the growing global markets. Almost 15% of UK automotive exports go to the Americas but we expect exports to the region to grow as recently launched premium brands and advanced technology vehicles are increasingly sought by Brazilian motorists."

The VCA is already providing safety certification services for automotive components, working with the Brazilian Transport Ministry. It is also in discussions with the Brazilian Environmental Ministry to explore how it can provide additional services, such as providing certification on environmental standards and emissions.

Eleven of the world’s global vehicle manufacturers are based in Britain and 74 per cent of all cars and commercial vehicles manufactured in Britain are exported. Britain is also a world leader for engine production with 2.5 million units produced in 2012 by companies including Ford, Toyota, BMW, Honda, Nissan, Perkins and JCB. 62 per cent of UK engine production was exported in 2012.

The VCA office in Sao Paulo will also open up wider markets for UK manufacturers as countries such as Argentina and Chile base their environmental and safety regulations heavily on the Brazilian legislation.

|International Trade|