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#WTO Trade Facilitation Agreement will bring major gains to developing countries

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170223WTOTradeFacilitAgreement2Ambassador François Xavier Ngarambe of Rwanda, Ambassador Malloum Bamanga Abbas of Chad, World Trade Organization Director General Azevêd, Ambassador Saja Majali of Jordan and Abdulla Nasser Musallam Al Rahbi of Oman presenting their countries’ TFA instruments of acceptance

The WTO has obtained the two-thirds acceptance of the agreement from its 164 members needed to bring the Trade Facilitation Agreement (TFA) into force. Rwanda, Oman, Chad and Jordan submitted their instruments of acceptance to WTO Director-General Roberto Azevêdo, bringing the total number of ratifications over the required threshold of 110.

The agreement will expedite the movement, release and clearance of goods across borders, launches a new phase for trade facilitation reforms all over the world and creates a significant boost for commerce and the multilateral trading system as a whole.

Full implementation of the TFA is forecast to slash members' trade costs by an average of 14.3 per cent, with developing countries having the most to gain, according to a 2015 study carried out by WTO economists. The TFA is also likely to reduce the time needed to import goods by over a day and a half and to export goods by almost two days, representing a reduction of 47% and 91% respectively over the current average.

DG Azevêdo welcomed the TFA's entry into force, noting that the Agreement represents a landmark for trade reform. He said: “This would boost global trade by up to $1 trillion each year, with the biggest gains being felt in the poorest countries. The impact will be bigger than the elimination of all existing tariffs around the world. It also means we can kick start technical assistance work to help poorer countries with implementation.”

EU plays leading role

EU customs authorities will play a leading role in the implementation of the agreement, acting both as an example to follow and as an engine for further progress in trade facilitation within the EU and at international level.

The agreement will also help improve transparency, increase possibilities for small and medium-sized companies to participate in global value chains, and reduce the scope for corruption. The deal was agreed during the WTO Ministerial Conference in Bali in 2013.

Trade Commissioner Cecilia Malmström said: "Better border procedures and faster, smoother trade flows will revitalise global trade to the benefit of citizens and businesses in all parts of the world. Small companies, that have a hard time navigating daily bureaucracy and complicated rules, will be major winners."

International Co-operation and Development Commissioner Neven Mimica added: "Trade is a key driver for sustainable development. The new agreement will help tapping the huge potential of trade. I am ready to assist our partner countries to make the most of this agreement."

The biggest scope for improvement - and thus the greatest potential to reap benefits - is in developing countries. The EU wants this agreement to play a significant role in increasing developing countries' involvement in global value chains. For that reason, the EU has committed €400 million to assist them with the reforms needed to comply with the rules set by the agreement.

In addition to its development dimension, the agreement also forms part of the EU's efforts to help small and medium-sized European companies use the untapped potential of global markets.

The EU has been one of the promoters of the deal and led the efforts towards its conclusion. Following the ratification of the deal by the Council and the European Parliament in 2015, the EU actively encouraged other WTO members to approve the deal without delay. While the critical mass has now been reached, allowing the agreement to become effective, the EU hopes the remaining WTO Members will ratify the agreement in the near future.

EU

Deal signed to help protect thousands of indigenuous peoples

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Russia’s metals and mining giant Nornickel has signed a cooperation agreement with the associations representing the indigenous peoples of the Taimyr Peninsula, a remote Arctic land dubbed “the last frontier of Russia” offering a five-year support programme worth 2 billion roubles (over €22 million at the current exchange rate), writes Martin Banks.

This big move shows that the mining company is engaging with the indigenous communities of the areas where it operates. The issue has come under the spotlight recently after another global miner Rio Tinto faced outrage after it had destroyed a 46,000-year-old Indigenous heritage site in Western Australia.

The Nornickel’s support programme, signed on Friday, includes a wide range of initiatives aimed at protecting the natural habitat and supporting indigenous peoples’ traditional activities.

The money will be used to build new homes, hospitals, schools, for infrastructural and cultural projects.

The initiative was drawn up after 100 interviews and various polls of the indigenous communities. Priority areas for support were identified as the creation of seasonal jobs in tourism and other industries, reindeer husbandry, fishing and hunting. The 40 new initiatives also include workshops for reindeer and fish processing, purchase of refrigeration units, construction of an ethnical complex with workshops for fur processing and subsidises of helicopter transportation.

Nornickel Federal and Regional Programmes Vice President Andrey Grachev said the programme is aimed at “stimulating the economic activity of the indigenous peoples and facilitating the use of renewable resources – the basis of their traditional lifestyle”.

He added: “Nornickel has a long history of close cooperation with organizations representing the interests of indigenous communities in the regions of our operations, ensuring transparency in decision-making and that joint projects are implemented in the most efficient manner possible.”

Further comment comes from Grigory Ledkov, President of the Association of Indigenous Minorities of the North in Siberia and the Far East of the Russian Federation, who said the agreement “can serve as an example for other companies, as it emphasizes the importance of preserving the habitat of indigenous people and protecting our values and traditions.”

He said that gathering opinions of indigenous populations was “a huge step in the right direction and will serve as a model for future projects of this kind”.

The results of this exercise, he said: “Will help develop initiatives which will be of paramount importance for indigenous populations.

“This agreement will help us find new joint approaches to sustainable living and working in the North, as well as resolve other pressing issues facing local communities.”

The company already offers a range of support in the region ranging from air transportation, the procurement of building materials and diesel fuel, as well as cultural events and celebrations.

The agreement was signed in Moscow by Grachev and Ledkov along with Artur Gayulsky, President of the Regional Association of Indigenous Peoples of the Krasnoyarsk Territory, and Grigory Dyukarev, Chairman of the Association of Indigenous Minorities of Taimyr, Krasnoyarsk Territory.

Nornickel, the world’s largest producer of palladium and high-grade nickel, has already invested 277m roubles (over €3m) between 2018 and 2020 towards support and development of the regions.

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Will COVID-19 change the UK’s attitudes towards immigration for good?

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During the lead up to the Brexit vote in 2016, political debate in the UK was often focused on immigration, with the migrant crisis reaching its peak just a year prior. And whilst perhaps not the sole reason as to why the UK public voted to leave the EU, it’s evident that concerns surrounding immigration had a significant impact writes Reanna Smith.

But fast forward four years, three prime ministers, an endless slog of negotiations and a global pandemic, and it’s clear that Britain isn’t the same country it was during the 2016 referendum. The UK is just now seeing what leaving the European Union will mean, with the newly proposed immigration rules set to come into place at the start of 2021, but the debate surrounding immigration has changed dramatically in the wake of coronavirus. 

According to IPSOS MORI, immigration has been one of the top issues concerning the UK public for years, but with the outbreak of the coronavirus pandemic, it’s suddenly dropped from the top 10 list altogether. It's no surprise that COVID-19 has taken the top spot, but there’s evidence to suggest that immigration has disappeared because of the way that the pandemic has changed attitudes towards the issue massively. 

COVID-19 has highlighted just how important immigrants are to the country, making up a large number of the “key workers” at the frontline of the response to the pandemic. According to the most recent report from the House of Commons, there’s over 169,000 non-British staff in the NHS making up a large 13.8% of our health service. Not only have immigrants been vital to saving lives during the pandemic in the UK, but they’ve also been affected more than anyone else in the country. Amnesty International recently revealed that throughout the pandemic the UK has had one of the highest death rates amongst healthcare workers, with BAME (black, Asian, and Minority-ethnic) workers being disproportionately affected by this. This was a fact further highlighted when it was revealed in April that the 10 doctors, all of whom were immigrants, had died from coronavirus. So, whilst COVID has devastated many people, there’s no dispute that immigrants working in the NHS and health care system have taken a disproportionate hit. 

It’s also clear that this immense sacrifice has had an effect on public opinion and policy in the UK, in 2016 one in three members of the UK population saw immigration as a top issue. But from April to July immigration had almost dropped off the political agenda. As immigrants became the heroes of the pandemic, tabloid headlines shifted from vilifying migrants to praising them for their contributions. At the same time, MP’s began calling for foreign NHS workers to have their visas extended for free and the public was outraged that those fighting to save lives were having to pay a surcharge to use the very same system they played a key role in. This eventually resulted in Boris Johnson announcing he would scrap the £400-a-year fees.

As well as this, the new immigration rules have come under fire for being hypocritical of the government's “key worker” list. The new points-based system will require immigrants to have a job offer with a salary of at least £25,600 to be granted the title of “skilled worker” and be eligible for a Tier 2 Work Visa. Many occupations considered vital during the last 6 months don’t come with salaries high enough to fit this requirement. A massive 58% of EU born and 49% of non-EU born full-time key workers aged 25 to 64 would not qualify for a Tier 2 Visa under the newly proposed immigration rules. 

Despite changing public attitudes, and shifting immigration policies, August saw a spike in anti-immigrant sentiment as a record number of asylum seekers crossing the English Channel saw the UK media and politicians put immigration on the top of the agenda once again. 

Boris Johnson has hinted at tighter immigration and asylum laws, only four months after his life was saved by two immigrant nurses when he contracted the virus himself. Painting immigration as a big issue now may be down to the impending economic recession that the UK faces, as the government looks to push the blame onto anyone but themselves. Ironically, immigrants could prove very necessary to help the country recover economically, and tighter restrictions would mean too few immigrants in sectors like healthcare, education, and hospitality. 

Despite the move towards more negative perceptions once again by the media and politicians, it’s too early yet to tell whether the public will follow suit. The pandemic has taught the UK many things but perhaps most importantly, it’s taught us that the economic value of human beings it most definitely not a reflection of the value these same people may hold to society. The post-pandemic landscape should reflect the UK's appreciation for immigrants, but the proposed changes fail to do this. 

Reanna Smith writes for the Immigration Advice Service, team of dedicated lawyers that offer advice and assistance with a variety of immigration issues.  

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Corporate tax rules

European Commission will appeal European court judgement in favour of #Apple

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The European Commission will appeal the European Court of Justice judgment which annulled their decision of August 2016 on Apple’s receipt of what they consider to be illegal state aid granted by Ireland in the form of selective tax breaks. 

The case turns on the critical question of the EU’s competency in tax matters that are usually jealously guarded by member states. The European Commission considers that in its judgment the General Court has made a number of errors of law.

The Commission reiterates that this is not a question of determining an EU countries tax policy, it is principally a question of selective advantage: “If member states give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the European Union in breach of state aid rules.”

The Commission says that they have to use all tools at their disposal to ensure companies pay their fair share of tax. In her statement, Commissioner and now Executive Vice President Margrethe Vestager (pictured) makes a clear link between the Apple case and fair taxation in general, stating that the unfair system deprives national treasuries of revenue: “The public purse and citizens are deprived of funds for much-needed investments – the need for which is even more acute now to support Europe's economic recovery.”

Fair taxation

Vestager also says that the EU needs to continue its efforts to put in place the right legislation to address loopholes and ensure transparency, and touches on the wider issue of a level-playing field for businesses: “There's more work ahead – including to make sure that all businesses, including digital ones, pay their fair share of tax where it is rightfully due.”

Ireland contends that no state aid was granted to Apple

Ireland’s Minister for Finance and Chair of the Eurogroup, Paschal Donohoe noted the Commission statement and said: “Ireland has always contended, that no State aid was given and that the Irish branches of the relevant Apple companies paid the full amount of tax due in accordance with the law. An appeal to the CJEU must be on a point, or points, of law.”

“Ireland has always been clear that the correct amount of Irish tax was paid and that Ireland provided no state aid to Apple. Ireland appealed the Commission Decision on that basis and the judgement from the General Court of the European Union vindicates this stance.”

Donohoe estimates that the appeal process could take up to two years to complete. In the meantime funds in Escrow will only be released when there has been a final determination in the European Courts on the validity of the Commission’s Decision.

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