In today’s international trade headlines, the UK and Switzerland are both praising the terms of the latest trade deal between the two countries, heavily focused on their services sectors.
HMRC has also announced its planned approach to low value goods imports, while the US has claimed ‘guardianship’ of the Strait of Hormuz and said it will charge vessels to transit the waterway amid renewed violence between American and Iranian forces.
Switzerland-UK deal
The UK has sealed a deal with Switzerland, which the Department for Business and Trade (DBT) claims will unlock £5.2bn in services trade for the UK’s lawyers, accounts, consultants and other professional service providers.
A separate agreement will also allow British travellers to use Swiss e-gates at the border.
The UK and Switzerland are two of the largest exporters of services in the world. DBT says that Switzerland is the UK’s 6th largest market for services, with a combined value of £30bn in bilateral services trade last year.
Business and trade secretary, Peter Kyle, called the agreement “the most significant services trade deal the UK has ever negotiated.
“It will bring huge benefits to British business and consumers and comes after a slew of deals with the US, Europe, the Gulf, South Korea and India.
The agreement includes visa-free travel for services professionals, easier work permits for professionals to transfer within their company and a reduction in associated paperwork. The government hopes that this will help businesses of all sizes, including SMEs and tech firms, to grow their exports.
Marco Forgione, director general of the Chartered Institute for Export & International Trade, said that the agreement delivered “real momentum for British exporters in finance, professional services, life sciences, creative industries and digital technologies.
“The conclusion of this new UK-Switzerland Free Trade Agreement marks a significant milestone for services-led trade, which constitute 80% of our economy.
“The estimated £5.2bn annual boost to UK services exports underscores its substantial economic value. At the Chartered Institute, we strongly welcome this pragmatic agreement as it reinforces the UK’s global trading credentials and provides UK businesses with expanded opportunities to grow, innovate and compete on the world stage.”
‘De minimis’ phaseout planned
HMRC has also published its plans for a low value imports regime, including draft legislation laying out its approach.
The measure changes the customs treatments of items worth less than £135 into the UK, removing Low-Value Imports (LVI) relief and introducing new arrangements for these packages.
In its policy paper, HMRC said that the “growing popularity of overseas sellers and online marketplaces has driven a significant rise in the volume of low-value goods entering the UK, which in turn has increased the risks associated with the current arrangements".
“The government is removing the customs duty relief for low-value imports and reforming the way these goods are declared into the UK to ensure all goods are appropriately controlled and support improved compliance."
At last year’s budget, the government said that it would remove ‘de minimis’ relief, after a wave of complaints from British retailers claiming that cheaper imports from e-commerce platforms were damaging domestic industry.
The EU and US have already changed their approach to low value imports. The latest date at which the UK’s changes can enter into force is October 2028.
The new measure will also:
- Define LVIs by reference to consignment value for the purpose of the new customs arrangements
- Introduce the concept of a fiscal representative, who is jointly and severally liable for customs debt arising from LVI customs declaration of another person
US-Iran
Strikes between the US and Iran have continued, as the world of international trade awaits the latest move from both sides in the war.
US President Donald Trump claimed that his country’s military was “reinstating” the blockade on Iran.
“The U.S.A. will be, from this point forward, known as ‘THE GUARDIAN OF THE HORMUZ STRAIT,’ but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World.”
ran claimed it hit two UAE tankers in the Strait of Hormuz, with authorities in the UAE saying that at least one sailor had been killed, while US bases in Tehran and Jordan have also been attacked. In response, the US Central Command (Centcom) claims that its own military action has been to “degrade Iran's ability to attack commercial shipping.”
The BBC reported that the crude tanker Mombasa B and liquefied natural gas tanker Al Bahiya were the two vessels that had been hit.
Iranian oil minister Mohsen Paknejad claimed on social media that oil exports were continuing, despite the resumption of violence in the crucial trade waterway.
Forgione will also be speaking on a free Global Trade Live webinar being hosted by the Chartered Institute today (14 July) which will address how businesses can navigate ongoing disruption in the Middle East. That webinar will be available to watch later this week.
Also in the headlines
- UK chancellor Rachel Reeves is set to make her latest Mansion House speech
- The UK and EU jointly hit Russian cyber networks with new sanctions
- Russia’s Afispky refinery has been set on fire during a series of strikes by Ukrainian forces, while Russian attacks hit the Black Sea port of Odesa
Yesterday in Trade
- UK Export Finance and the British Business Bank announced a new scheme to support SMEs to grow via exports
- Incoming PM Andy Burham told a Labour Party hustings that he would bring more government contracts in-house and assemble a “broad church” ministerial team for his new cabinet
- The Islamic Revolutionary Guard Corps issued a statement over the weekend claiming that the Strait of Hormuz closed
