MinBane

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Archive for the category “Trade”

Bank of Uganda: Measures to mitigate the economic impact of COVID-19 (20.03.2020)

Zimbabwe: ZERA – Public Notice – All Fuel Sector Companies – Selection of Sites for Direct Fuel Imports (DFI) and Trading in Foreign Currency (02.03.2020)

Brexit: EU’s mandate on negotiations shatters some Brexiteers dreams…

Today the European Commission (EC) of the European Union (EU) gave Michael Barnier a mandate to negotiate with the United Kingdom. As they are in the temporary state until the final break with the European Union, the transition period last until 31st December 2020. This means, this will last until 1st January 2021. That is the time table for this and the mandate giving today from the European Commission, which sets the standards for what to come.

The key things for me was these highlights, which really shows that the United Kingdom is really losing. There is nothing in the mandate, which gives the UK any edge. Only shows what the EU is considering important. While the UK will have to negotiate hard to get things better out of this. Especially considering they only have a taskforce within Downing Street Number 10. They don’t even have a unit fixing this anymore.

Just take a look!

ANNEX to COUNCIL DECISION authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for a new partnership agreement” (25.02.2020)

reflect the United Kingdom’s status as a non-Schengen third country, and that a nonmember of the Union, that is not subject to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member” (EU, 25.02.2020).

Free Trade Area:

The envisaged partnership should include appropriate rules of origin based on the standard preferential rules of origin of the Union and taking into account the Union’s interest” (EU, 25.02.2020).

Road transport:

As third country operators, United Kingdom road haulage operators should not be granted the same level of rights and benefits as those enjoyed by Union road haulage operators in respect of road freight transport operations from one Union Member State to another (“grand cabotage”) and road freight transport operations within the territory of one Union Member State (“cabotage”)” (EU, 25.02.2020).

Fisheries:

Besides the cooperation on conservation, management and regulation, the objective of the provisions on fisheries should be to uphold Union fishing activities. In particular, it should aim to avoid economic dislocation for Union fishermen that have been engaged in fishing activities in the United Kingdom waters” (EU, 25.02.2020).

Gibraltar:

Any agreement between the Union and the United Kingdom negotiated on the basis of these negotiating directives will not include Gibraltar” (EU, 25.02.2020).

First things first. The EU shows a sign, which the UK haven’t understood or neglect to understand. It is that it will not have the benefits of the EU nor the previous membership as a nonmember, even if the politicians and Tories have acted like that since day one.

Secondly, the EU will work in its own interest, even with their paradigm Free-Trading Area, also making the cargo trade on the roads harder for British exporters from United Kingdom into the European Union. While also, trying to ensure the EU fishing boats access to UK seas. This is all clearly hitting the demands, but also the promises made from the Tories in the UK. They are not shielding the fisheries, they are making it harder for the exporters. Because, they cannot get the access and the mobility, which it has today.

Third, the EU has no concern about Gibraltar. That is really stuffing the faces of London, as they have promised Gibraltar safety and a secure future. However, this is the EU showing a shift in focus on this and putting a hard stance. As this has to be negotiated separately, by this mandates concern. This is surely done to please the Spanish in the EU.

However, what we are seeing, that the mandate isn’t that friendly, the direct approach sets the stakes and also doesn’t give way. As the EU needs to set the foot down and show there is a difference being on the outside, then being inside. Which is the wish of the UK. That is why it got to cost to become a nonmember. Peace.

Mobile Money Tax shortfall: People change behaviour after levying an unfair tax

Levy on mobile money contributed a deficit of UGX 30.48 billion which can be explained by the fact that high value clients withdraw their funds from agency banking e.g MTN has had a drop of 36 percent in MM transaction values since the introduction of the levy on mobile money” (Uganda Revenue Authority, 06.02.2020).

There is also reported that it has been a 36% drop in Mobile Money Transactions since the enaction of the Exercise Duty in 2018. That means, the added tax on the MM transactions are backfiring. The State isn’t adding revenue, but ensuring that people are finding other ways of moving their money.

This is not shocking, that people change behaviour, when the state makes it more expensive. As the people used these services to send each other money by convenience. Now, one third of the transactions are gone. Meaning, the ones that can change their ways has done that.

The losers are not only the Telecoms, but also the state. As the shortfall of taxes got to be covered elsewhere. As the state had put this into the budgets to cover other state works. This means the targets for domestic revenue wasn’t considering the implications of doing it. As, there wouldn’t be an natural reaction to the consequences to the new taxes.

Instead of increasing the tax base, they are making it smaller and not able to find measures that makes sense. The state has clearly done this without due diligence, neither also configured the stats and the possible behaviour of the public. As their ways gotten more taxed and not considering that they would stop, if they found it to expensive or unreasonable.

The MM tax and the OTT taxes was measures made to tax the digital market-space in the Republic. However, they have both been flawed and also not met their targets, because the public found other ways of doing things.

The ironies about the MM saga is that before the tax, the business of MM was growing. A natural growth and having more transactions every year. Now, that they levied the tax its has a big fall. That is a result of the MM Tax and the public is not having it. Peace.

Brexit: The negotiations that Boris doesn’t seem prepared for…

The Tories think they can easily access the European Common Market without being a member of the European Union. However, today’s revelation in the draft negotiations paper from Michael Barnier proves that hassle the Boris Johnson government have to deal with. The Brexiteers will struggle with it.

Just like one key sentiment, which the UK have to understand:

reflect the United Kingdom’s status as a non-Schengen third country, and that a non-member of the Union, that is not subject to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member” (Barnier, 03.02.2020).

This here is very revealing and sets the tone. This puts the United Kingdom on the outside, as entity on its own, but still will not have the same rights the members of Union. Neither the same obligations and therefore, will be treated differently. That is key aspect, which the UK doesn’t seem to understand.

Boris Johnson statement in return:

The Government wishes to see a future relationship based on friendly cooperation between sovereign equals for the benefit of all our peoples. There is complete certainty that at the end of 2020 the process of transition to that relationship will be complete and that the UK will have recovered in full its economic and political independence. The Government remains committed in all circumstances to securing all those benefits for the whole of the UK and to strengthening our Union” (Boris Johnson, 03.02.2020).

This here negotiations will not be easy. The documents from Barnier in his drafts proves the technicalities, even as the British has appointed a Task Force instead of Department working inside the Office of the Prime Minister. Because, that will run so well. Not like all the Secretaries of the Exiting the EU did a good job, but they would have civil servants dwelling on and configuring the fine details. Which the answer of PM Johnson is a kids story compared to the paperwork of Barnier.

Like Barnier said:

The envisaged partnership should establish open market access for bilateral road freight transport, including unladen journeys, made in conjunction with these operations:

by Union road haulage operators from the territory of the Union to the territory of the United Kingdom, and vice versa;

by United Kingdom road haulage operators to the territory of the Union, and vice versa.

As third country operators, United Kingdom road haulage operators should not be granted the same rights and benefits as those enjoyed by Union road haulage operators in respect of road freight transport operations from one Union Member State to another (“grand cabotage”) and road freight transport operations within the territory of one Union Member State (“cabotage”)” (Barnier, 03.02.2020)

Then Johnson said:

Road Transport

There should be reciprocal commitments to allow EU and UK road transport operators to provide services to, from and through each other’s territories, with associated rights, underpinned by relevant international agreements and commitments, and ensuring the necessary cooperation on monitoring and enforcement” (Boris Johnson, 03.02.2020).

Here is a typical statement towards each other. They have sort of the same pattern, but the leafy British statement, compared to the detailed EU ones. Show the work behind it and the details are expressing the needs of the EU to show difference between members and nots. The UK is a not and therefore, cannot do the same as they have done now. They got to follow more strict rules, even as they are allowed to cross the borders, but more rigorous than in the past.

These negotiations will be interesting to follow, as the UK and EU is in a stalemate, in a limbo, which is supposed to last a year. Before the final ending of the marriage is over. The Bride and Groom leaves each other and become Exes. Who knows how this will go, but the EU seems more prepared, than the UK is at the moment. Because, the statement from Boris wasn’t reassuring. When you looking into the work of EU at the moment. Peace.

Kenya Tuitakayo Movement rejects the Turn Over Tax aka ‘Mama Mboga Tax’ (31.01.2020)

Zimbabwe: Government – Press Statement (06.01.2020)

Brexit: A Shoddy Impact Assessment of the new Withdrawal Agreement Bill…

This was really inspired and not well thought out of, the Department of Exiting the European Union and the rest of the Tories. Really didn’t care much for the estimates of the costs, nor the consequences in concerns of their amended Bill to Parliament. Prime Minister Boris Johnson wants to just pursuit the ending without doing the proper work. This is shoddy, disrespectful work, which he wanted to be over within 3 days or so. Within the parameter of when he wanted to suspend the Parliament.

So, his acts and his vision is blurry, as the whole law and amendments of it. Is substantial and needs time to be addressed properly, that is if, the Brexit process and withdrawal of membership has consequences. Which it does, but apparently it is more important to leave, than to know why your leaving.

I have today looked through the Impact Assessment Report on the bill, which in itself is a sad report. A disgraceful attempt of justification and proving the possible outcomes of the withdrawal. Apparently, that didn’t matter, because my quotes are very striking. Take a look!

There could be costs to business associated with the arrangements in the Northern Ireland/Ireland Protocol. But these are inherently uncertain in their nature and intensity, as such, these costs have not been quantified” (Impact Assessment, 2019).

Customs:

Businesses in Great Britain and Northern Ireland may face familiarisation costs in adapting to the new customs processes, such as the requirements for customs declarations, in particular if they have not undertaken such processes before” (Impact Assessment, 2019).

This isn’t rocket science and will cost both the state and the businesses. It will cost both time and money, to fill forms and secure the movement accordingly to the regulations on both sides of the customs.

VAT:

Northern Ireland will be required to align with certain EU VAT and excise rules. VAT collected in Northern Ireland will be retained by the UK. Specific practical arrangements will be the subject of discussions within the Joint Committee, and it is not therefore possible to assess costs or benefits at this stage” (Impact Assessment, 2019).

The taxation on goods will be an issue and how its issued. This will add prices possibly on the consumer and also on the businesses. But the HM Government don’t know to what extent and how to operate. That is clearly a smooth transition.

Tariffs:

No tariffs will be paid on goods moving from Great Britain to Northern Ireland unless they are deemed to be at risk of entering the EU. The appropriate UK tariff will be paid on goods moving from outside the UK or EU to Northern Ireland unless they are deemed to be at risk of entering the EU. The Joint Committee will agree the criteria to be used in determining whether goods are not considered to be at risk of entering the EU” (Impact Assessment, 2019).

So, there will certain cost of moving goods into the EU as per the tariffs stipulated by the Joint Committee. This means, the UK-EU on accord will find the fitted prices on movement of goods form the UK into EU. That means, the goods moving across the borders will cost more, than today, as there is no-tariff on lots of products crossing the borders at this very moment.

Agri-Foods from GB to NI:

Agri-food goods moving from Great Britain into Northern Ireland would need to be notified to the relevant authorities before entering Northern Ireland and would be subject to checks including identity, documentary and physical checks by UK authorities as required by the relevant EU rules. These processes would introduce additional costs, both from one-offfamiliarisation and ongoing compliance, to businesses compared to current arrangements” (Impact Assessment, 2019).

This will surely cost and make it more time consuming. Not making it easy or smooth either. Surely, all of this is hardening the trade of this to NI.

Manufactured goods from GB to NI:

To ensure regulatory compliance, businesses in Great Britain selling to Northern Ireland may incur additional costs from product testing and corresponding administrative processes. The nature of the costs will depend on the product-specific requirements in EU law and on a business’s current approach to meeting these requirements. These costs may be passed through to businesses in Northern Ireland” (Impact Assessment, 2019).

Here the costs will be put on the consumer in Northern Ireland for the goods coming from Great Britain. The manufactured goods will not be cheaper, but more time consuming to get and has to follow other protocols, than the ones coming from Ireland/EU. This means for the NI it will be more profitable to get EU goods, than GB goods, because of the cost. That is simple calculation.

We can all see, that the Withdrawal Agreement and new legal text makes business, movement of goods and borders to the Northern Ireland more harder. That without swimming into the legal text nor the statutes of the Withdrawal Agreement. Because, this is just the mere chip-shape of the impact assessment of it all.

The whole thing is lazy and that makes me grim. Because, this shows the people releasing it. Didn’t do their job and show the real estimates nor the possible costs of doing business. Only that it might cost more, which it most likely will do, because you have more things to do before doing business. Peace.

Reference:

European Union (Withdrawal Agreement) Bill – Impact Assessment, 21.10.2019

Brexit: Lib-Dems – Government grovelling over food standards to try and secure US trade deal (07.10.2019)

Brexit: Lord Kinnoull letter to James Duddbridge MP Under Secretary of State for Exiting the European Union – “Government response to Hosue of Lords’ report Brexit: the Customs challenge” (03.10.2019)

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