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Negative first quarter trade trends

20th June 2014

By: Callie Lombard

  

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On May 27, the Organisation for Economic Co-operation and Development (OECD) released its study of the trends in the first quarter of 2014’s international merchandise trade statistics, which declined across most major economies.

Total merchandise exports for the Group of 7 (G7) countries (Canada, France, Germany, Italy, Japan, the UK and the US) and the Brics bloc (Brazil, Russia, India, China and South Africa) fell 2.7% in the first quarter of 2014, compared with the previous quarter. Imports stagnated with only 0.1% growth over the period, mainly owing to continued imports of crude oil and fuels. But exports fell sharply in China (7.3%), which may partly effect the Chinese New Year, as well as the impact of a government crackdown on over-invoicing. Chinese imports fell more moderately by 0.9%.

In Japan, the recent import boom in the run up to the consumption tax hike in April seems to have dissipated, with imports rising by only 0.9%, while exports slowed sharply (3.5%). Overall, this resulted in a record high trade deficit of $44.8-billion.

In the US, exports fell by 1.3%, while imports increased by 0.8%. Canada witnessed the sharpest quarterly decrease in exports (2.9%) and imports (3.3%) since 2009. Merchandise trade also declined substantially in the UK (3.2% for imports and 4.3% for exports).

Among the G7 and Brics countries, only Germany and Italy registered an increase in merchandise exports of 2.1% and 1.5% respectively. Exports and imports were mainly flat in France.

In other Brics countries, merchandise trade also contracted. In Brazil, exports declined 5.8% and imports increased by 1.9%, while Russian exports and imports declined by 2.9% and 2.8% respectively. India also witnessed a decrease in trade (3.0% for exports and 0.9% for imports), as did South Africa (4.3% for exports and 1.5% for imports).

Customs Valuation and Transfer Pricing
A joint workshop of the World Customs Organisation (WCO) and the OECD on customs valuation and transfer pricing was held on May 27, in Budapest, Hungary.

Participants represented both customs and tax administrations, and facilitators were from the OECD, the World Bank and the WCO secretariat. Sessions were delivered on the fundamental principles of the two regimes and explored their similarities and differences. The group examined and discussed various scenarios where transfer-pricing information may be useful to customs administrations when examining related party transactions and considered the appropriate customs’ treatment of transfer-pricing adjustments.

The workshop follows two similar regional events held in Seoul, Korea, and Pretoria, South Africa, and provided a platform for customs and tax administrations to establish contacts, with a view to closer cooperation on this topic.

ICC Certificate of Origin
On June 6, the International Chamber of Commerce (ICC) announced that the Australian Chamber of Commerce and Industry (ACCI) and its network of state chambers, as well as French local Chamber, the Essonne Chamber of Commerce, had become the latest members of the International Certificate of Origin Accreditation Chain. This increased the number of Certificates of Origins issued with the ICC World Chambers Federation to more than eight-million.

WTO Annual Report
On June 3, the World Trade Organisation (WTO) published its 2014 annual report, which provides a comprehensive overview of the WTO’s activities over the last year. The report opens with a message from WTO director-general Roberto Azevêdo, who reflects on the last year and the challenges facing the WTO in the future. This is followed by a brief summary of the year and an in-depth review. For the first time the report is available as an App for downloading to a tablet, as well as a PDF and in a printed format.

Sodium Dichromate Safeguard
The WTO on May 28 informed that India had notified its Committee on Safeguards that it initiated on May 26 a safeguard investigation on sodium dichromate, classifiable under tariff subheading 2841.30. According to the notice all interested parties may make their views known within a period of 30 days from the date of the notice issued by the director-general (Safeguards) to: The Director-General (Safeguards) Bhai Vir Singh Sahitya Sadan, email dgsafeguards@nic.in. In addition, any other party to the investigation who wishes to be considered as an interested party may submit its request so as to reach the director-general (Safeguards) within 15 days from the date of notice. According to the WTO, a safeguard investigation seeks to determine whether increased imports of a product are causing, or threatening to cause, serious injury to a domestic industry. During a safeguard investigation, importers, exporters and other interested parties may present evidence and views and respond to the presentations of other parties. A WTO member may take a safeguard action (i.e. restrict imports of a product temporarily) only if the increased imports of the product are found to be causing, or threatening to cause, serious injury.

Taxation Papers
The National Treasury on April 29 released the Carbon Offsets Paper and on May 5, the Review of the Taxation of Alcoholic Beverages in South Africa, on which comment is due by June 30.

Vat Vendors Registration
On May 16, the South African Revenue Service (Sars) published draft regulations for the registration as value-added tax (Vat) vendors on which comment is due by June 30.

Foreign Hunters Vat
On May 5, Sars published a Draft Interpretation Note on the supply of goods and services by professional foreign hunters, which explains the Vat treatment of various supplies to foreign hunters, including hunting services, taxidermy services, the supply of a trophy, as well as the subsequent export of the trophy. Comment is due by June 30.

Edited by Creamer Media Reporter

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