Report on Trade Restriction Measures

The European Commission has published a report on potentially trade restrictive measures introduced between October 2008 and October 2009 by the European Union’s (EU) major trade partners. 223 new trade restrictive measures were reported as planned or introduced since October 2008.

The report says that a protectionist worst-case scenario has been avoided as the measures taken so far are rather limited in scope, relative to fears and previous experience with economic downturns.

 

Common EU Rules for Exports

The new Regulation (EC) No 1061/2009 establishing common rules for exports has been published in the Official Journal.

The principle set out in the regulation is that the exportation of all goods from the European Union shall be free, with the exception of the restrictions provided for in that regulation.

 

A Common European Income Tax?

EurActiv reports on some budget drafts for the 2014-2020 financial framework. The really interesting part is the hinted idea of replacing current budget resources (mainly from VAT) with something that might be called European income tax. One of the considerations of the Commission appears to be that the financing of the EU budget from VAT is incomprehensible for the European citizens.

A bold idea indeed.

G-20 – What Economic Decision-Making?

It is said that the Group of 20 (G-20) is set to become the premier coordinating body on global economic issues. But what does it mean?

Indeed, the summit statement says that G-20 is “to be the premier forum for our international economic cooperation”. The statement outlines three areas of cooperation:

• G-20 members will agree on shared policy objectives;
• G-20 members will set out medium-term policy frameworks and will work together to assess the collective implications of national policy frameworks;
• G-20 Leaders will consider, based on the results of the mutual assessment, and agree any actions to meet common objectives.

The G-20 is perceived as an efficient forum that now allows for the inclusion of developing countries in the global economic and financial governance. One of the most important tasks ahead of G-20 appears to be the reform of the International Monetary Fund (IMF) and other global financial institutions.

Other experts, however, claim that the process of reform cannot be restricted to the G-20 or similar associations that exclude so many of the world’s countries. That is why G-20 cannot replace a fully legitimate and universal international organization, such as the IMF.

An additional critique is that large countries like Bangladesh or Nigeria are missing and that Europe is over-represented in the G-20 forum—which cripples democratic representation .

My Blog on Climate Change

I now participate in TH!NK2 Climate Change – a 3 month blogging competition with a focus on UN Climate Change Conference in Copenhagen (COP15) in December 2009.

You can check my posts on this topic here.

Trouble over Raw Materials Supply from China

The association of German industry BDI has warned that:

“Global, European and national restrictions to commodities are threatening the growth of German industry, which is vital to overcoming the current crisis.”

“We are steering towards a raw materials gap,” said Ulrich Grillo, chairman of the BDI commodities group and chief executive of German zinc producer Grillo-Werke.

BDI complains that China alone has restricted trade with raw materials and semi-finished products with some 373 export duties.

This complaint comes when there’s news about a draft report by China’s Ministry of Industry and Information Technology. The report has called for a total ban on foreign shipments of some rare metals, while introducing export quotas for other rare elements far bellow global needs.

Proposal on VAT Tax Coordination

The European Commission adopted a proposal for a recast of the Regulation on administrative cooperation in the field of valued added tax, extending and reinforcing the legal framework for the exchange of information and cooperation between tax authorities.

One of the most novel elements in the proposal is the creation of Eurofisc. It is supposed to allow a very fast exchange of targeted information between all Member States as well as the setting up of common risk and strategic analysis.

The Recast regulation sets out that Member States are jointly responsible for the protection of VAT revenues in all Member States.

EU, US Take China to WTO over Raw Materials

Both the European Union and the US have requested consultations with China in WTO over export restrictions for raw materials.

According to Catherine Ashton, EU Trade Commissioner: “the Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn. I hope that we can find an amicable solution to this issue through the consultation process.”

Raw materials in question include yellow phosphorous, bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide and zinc.

China says that the restrictions are meant to protect the environment and comply with Chinese trade commitments.

To put this in perspective, read the excellent article by Martin Stürmer: “The International Raw Materials Boom. A Challenge for Multilateral Trade Policy”. The author pays specific attention to the implications of raw materials competition, which caused many wars in the last two centuries, and prompted the beginning of the European integration process. Stürmer thinks that the multilateral world trade system is barely adequate to meet the new challenges arising from increasing raw materials consumption. The author advocates for a recognition of the development policy interests of many producer states.

Codified Directive on Tax Exemptions from Introduction of Personal Property

The codified Directive 2009/55/EC on tax exemptions applicable to the permanent introduction from a Member State of the personal property of individuals has been published in the Official Journal.

The main rule is that every Member State must exempt personal property introduced permanently from another Member State by private individuals, from consumption taxes which normally apply to such property.

Good Governance in Tax Matters

There is a new Communication from the European Commission on good governance in tax matters.

It considers:

• how good governance could be improved within the EU,
• the particular tools that the European Community and EU Member States may have at their disposal to promote good governance internationally, and
• the scope for more co-ordinated action by EU Member States, so as to support, streamline and complement international action taken in other fora such as the OECD and the UN.