QAD Precision News Round-Up for 5 July 2019
In the QAD Precision News Round-Up: 5 July 2019, Walmart’s China logistics plan; EU and Vietnam sign trade deal; US eyes tariffs on $4bn EU goods; China says US tariffs must go; DHL GF expanding services in the US, plus removing the burden of FTA compliance.
THE EU SIGNS AMBITIOUS TRADE DEAL WITH VIETNAM
Last Sunday, the European Union and Vietnam signed a landmark free trade agreement. The deal introduces tariff reductions on 99 percent of goods traded between the EU and Vietnam — although some of these cuts will happen over a 10 year period. The EU called the EU-Vietnam Free Trade Agreement (EVFTA) “the most ambitious free trade deal ever concluded with a developing country.” According to official data, Vietnam exported $42.5 billion worth of goods and services to the EU, while imports amounted to $13.8 billion in 2018. On Sunday, the Vietnamese government stated that EVFTA would increase EU exports to Vietnam by 15.8 percent while exports from Vietnam to the EU are expected to grow by 20 percent by 2020. The agreement is awaiting approval of the European Parliament — which may prove difficult. A number of EU legislators have concerns regarding Vietnam’s human rights record. For more information, please see Reuters.
US TARIFF THREAT ON $4 BILLION WORTH OF EU GOODS
The US has proposed tariffs on an additional $4 billion worth of European Union goods. The tariffs would impact food such as cheese, meat and pasta, as well as other goods, including, whisky, chemicals and metals. This proposal is in response to the ongoing aircraft subsidy dispute. The targeted goods form a supplemental list to tariffs proposed by the United States Trade Representative (USTR) in April, valued at $21 billion. For more details, please see Supply Chain Dive
CHINA — TARIFFS MUST BE GO FOR TRADE DEAL
On Thursday, China’s commerce ministry stated that a trade deal between Beijing and Washington is only possible if existing US tariffs are removed. At the G20 Summit last weekend, US President Donald Trump and Chinese President Xi Jinping agreed to restart trade talks that had ceased in May. To relaunch these talks, President Trump had agreed to not place tariffs on $300 billion of additional goods from China and to ease restrictions on Huawei, the Chinese tech giant. At present, the US has imposed tariffs of 25 percent on $250 billion of Chinese goods which varies from furniture to semiconductors. For more information, please see Reuters.
WALMART ANNOUNCES $1.2BN INVESTMENT PLAN IN CHINA LOGISTICS
On Monday, Walmart. Inc announced plans to invest approximately $1.2 billion in China over the next ten years to upgrade logistics. Walmart plans to set up and restore at least 10 logistics centres in an effort to integrate with the country’s “smart retail” movement. This announcement comes as retailers such as Alibaba Group Holdings Ltd and tech giants such as Tencent Holdings Ltd make deals to integrate online and high-street shopping. At present, Walmart has a number of operations in China including 400 retail units in 180 cities. For more information, please click here.
DHL GLOBAL FORWARDING TO FOCUS ON “WHITE GLOVE SERVICES” FOR US SHIPPERS
DHL Global Forwarding has been adding new services to its US operations, which go beyond traditional linehaul delivery. This includes efforts to speed up customs clearance. DHL station manager for Chicago, Chris Gonsowski stated that, “DHL is the first forwarder in the US to use canines for customs clearance, and Chicago was the first hub to bring them into service.” This change has allowed DHL to “cut clearance times from 90 minutes to 20 minutes” while also improving quality. Chief Executive for the US, David Goldberg stated that operations will focus on “white glove services” for shippers. For more information, please see The Loadstar.
QAD Precision News
REMOVING THE BURDEN OF FTA COMPLIANCE
On Sunday, 1 June 2019, the European Union and Vietnam signed a landmark free trade agreement (FTA) with Vietnam, which will reduce tariffs on 99 percent of the goods traded between the two. This is not the only significant FTA that the EU signed this June. After 20 years of talks, the EU finally reached an agreement with Mercosur, the South American trading bloc comprised of Brazil, Argentina, Paraguay and Uruguay. Negotiating free trade deals can take a significant amount of time. Ratification can add years to the process too. The new Nafta — the United-States-Mexico-Canada Agreement (USMCA) — took 14 months of talks to reach an agreement in September 2018, with Mexico being the only country to ratify the trade deal 9 months later in June 2019.
Although negotiating free trade deals is a long process, governments are prepared to dedicate the time needed. This is because FTAs remove trade barriers, open markets, support innovation, competitiveness and reduce poverty. However, many companies simply do not bother to take advantage of FTAs because of the burden of compliance. In this QAD Precision Report, we look at FTA compliance and how automated solutions can help. To read the full report, please click here.
UNIVERSITY SHIPPING SIMPLIFIED: JOIN OUR WEBINAR
University researchers and administrative staff are not professional shippers. Many ship parcels on an ad hoc basis and each school or unit may use a preferred carrier for all shipments. Consequently, universities often have a poor understanding of their parcel spend.
Join us on July 11, 2019 at 10 a.m. CDT for a 30-minute webinar where QAD Precision’s Trade Compliance & Transportation Management experts will discuss how universities can simplify shipping, control costs, limit compliance exposure and improved research chain visibility. To register for the webinar, please click here.
GLOBAL TRADE MANAGEMENT FOR LIFE SCIENCES: JOIN OUR WEBINAR
Are you ready for the future of life sciences shipping? The increasing importance of emerging markets, new treatments such as biologics, patient-centric approaches and direct-to-patient deliveries as well as changes to the regulatory environment all create shipping challenges for life sciences companies.
Join us on July 18, 2019 at 11 a.m. CDT as we discuss key challenges life sciences companies face such as managing sourcing complexity and addressing global complexities — imports and exports to name a few. To register for the webinar, please click here.
LET’S KEEP IN TOUCH
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