Singapore corroborates participation in RCEP

Singapore corroborates participation in RCEP

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Singapore ratified the Regional Comprehensive Economic Partnership (RCEP) agreement on Friday.

Becoming the first participating country to do so, the Ministry of Trade and Industry said in a press release.

The RCEP is the world’s largest free trade agreement, bringing together the 10 ASEAN economies as well as Australia, China, Japan, New Zealand and South Korea.

“Singapore’s expeditious ratification of the Regional Comprehensive Economic Partnership agreement signals Singapore’s strong commitment to strengthening our trade and economic linkages with our partners, for the benefit of our businesses and people,” said Minister for Trade and Industry Chan Chun Sing.

“We look forward to our fellow RCEP Participating Countries doing likewise, to expedite the entry into force of the agreement.”

Singapore has deposited its instrument of ratification with the Secretary-General of ASEAN, said MTI.

The RCEP was signed by the 15 participating countries in November last year.

Prime Minister Lee Hsien Loong said then: “The RCEP is a major step forward for the world, at a time when multilateralism is losing ground and global growth is slowing.”

The RCEP deal establishes a mutually beneficial economic partnership that builds on existing ASEAN agreements with the bloc’s five FTA partners, said MTI on Friday.

Comprising about 30% of global gross domestic product and close to a third of the world’s population.

The deal will complement Singapore’s existing network of FTAs and boost trade and investment flows, the ministry said.

Businesses can expect to benefit from tariff elimination of about 92% on average

As well as streamlined rules of origin for greater flexibility to tap on preferential market access benefits.

The RCEP agreement will enter into force after six ASEAN member states and three ASEAN FTA partners have ratified it.

The participating countries are targeting entry into force on 2022, said MTI.

Source: Channel News Asia .

Cross-docking what is it, types and advantages

Cross-docking: what is it, types and advantages

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Cross-docking is a logistics technique where storage time is non-existent or very limited.

As we know, cross-docking allows us to reduce time and costs, how is it possible? All you have to do is transfer shipments from the means of transport in which they arrive at the means of transport in which they leave without intermediate storage.

This distribution technique seeks greater efficiency in the entire supply chain, involving customers and suppliers.

For this reason and to carry out cross-docking, it is important to synchronize the storage and distribution of the merchandise through the following activities:

  1. Pre-distribution. Suppliers prepare the goods to be distributed.
  2. Receipt of the merchandise.
  3. Information capture. Necessary for good control over the merchandise.
  4. Re-packing, cargo consolidation, and merchandise delivery.

Types of Cross Docking

Within this process, there are two variants, pre-distributed cross-docking and consolidated.

Predistributed cross-docking

In predistributed cross-docking, the units to be marketed are already organized by the provider according to their delivery points, therefore they are received and moved to the exit points, (the place where they are with units similar to different suppliers) ready to be shipped.

This model is the most basic to apply since the units do not require any additional handling.

Consolidated

In consolidated cross-docking, the logistics units are received and immediately sent to a conditioning area within the CEDI (Distribution Center), in which they will be organized into new logistics marketing units to be sent to their respective points of sale. destination.

This strategy is frequently used to put together offers for products that will be sent to chain stores or department stores.

Finally, it is important to note that both types of cross-docking provide great benefits: increasing the speed of product flow, reducing handling costs, promoting productivity, and reducing space requirements.

Advantages of cross-docking

Cross-docking has many advantages, among which are:

  • It’s one of the strategies that can be framed within the Efficient Consumer Response philosophy.
  • It manages to improve efficiency and productivity within the supply chain.
  • It is an especially fast and profitable distribution model.
  • allows having an interesting cost reduction in storage, distribution, inventory, and personnel.
  • By reducing stocks, facilitates the task of handling and relocating merchandise, achieving fewer errors.
  • Get a greater freshness of the merchandise and increase its availability.
  • Facilitates meeting deadlines, which is a great advantage for the client.
The trade balance what it is and how it is calculated

The trade balance: what it is and how it is calculated

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The trade balance is the record of imports and exports of a country in a given period. It is also called the balance of goods.

Through the trade balance, income from the sale of national goods abroad and expenses from the purchase of foreign goods are recorded and compared. In other words, the trade balance allows recording the value of a country’s exports and imports.

The trade balance serves to understand market supply and demand, as well as to identify possible signs of economic expansion or contraction.

Its importance lies in the fact that it helps to understand the economic potential of a country in relation to others, useful information to determine with which countries to establish trade relations or in which areas to invest.

The balance of the trade balance can be positive or negative, in which case we speak of a trade surplus or a trade deficit respectively. When the balance tends to zero, it is said that there is balanced trade.

How to calculate the balance of the trade balance?

It is calculated with a simple subtraction operation between the total income from exports and expenses from imports.

The formula is as follows:

Exports – Imports = balance of trade balance

For example: in 2019, the country registered revenues of 911,894.2 million dollars from exports. It also recorded expenses for imports of 917,456.1 million dollars. So if we apply the formula we get the following result:

911.894,2 M.$ – 917.456,1 M.$ = -5.561,9 M.$

Therefore, the country’s trade balance in 2019 was -5,561.8 M. €. It is, therefore, a negative balance of the trade balance or deficit.

Variables that affect the balance

Although it allows us to get a fairly approximate idea of the economic direction of a country, by itself it is not a sufficient indicator to interpret the behavior of the general economy.

This is because, on the one hand, it only reflects one aspect of the economy and, on the other hand, this aspect is affected by various variables.

Among some of the variables that affect it we can mention:

  • The consumption preferences of the population with respect to national and foreign products.
  • The sale price to the consumer of imported products.
  • The average income of consumers from imports or exports.
  • Government policies regarding foreign trade.

Balance of payments

The balance of payments consists of the total record of commercial operations, services, and movement of capital between a country and the countries with which it has commercial relations.

The trade balance is one of the components of the balance of payments, and it is the most important since it is an indicator of the country’s commercial functioning.

Other components of the balance of payments are the income balance, the transfer balance, and the services balance.

Automatic permits what are and what is its importance

Automatic permits: what are and what is its importance

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As part of the trade facilitation scheme, automatic permits allow the customs authority to carry out better statistical control of import and export operations.

The nature of this regulation is set out in article 21 of the Regulations of the Foreign Trade Law.

In this article, we tell you what they are and what is the importance of automatic permits for your imports and exports.

What are automatic permits?

Automatic permits for statistical monitoring purposes are a mandatory measure for companies or individuals who request entry to the registry of importers and exporters of specific sectors.

The objective is to use this information as an instrument to prevent and combat recurrent harmful practices such as the incorrect tariff classification of goods, undervaluation, and triangulation of origin, which can affect the operation of strategic industries for national economic activity. , such as the footwear and textile industry and the steel industry.

Although not strictly about non-tariff regulations or restrictions, failure to apply for permits can lead to delays in your shipments through customs.

What are they for?

In essence, automatic permits provide the possibility of having advanced information, at the tariff fraction level, to facilitate the identification of goods.

And they can only be applied when the unit price of the goods is lower than their estimated price; in this way, the payment of contributions on merchandise subject to estimated prices can be guaranteed.

What is its importance?

Knowing how to identify the goods that require this document is very important for any operation since the authority can often maintain that automatic permits are part of the provisions of Articles 16 and 17 of the Customs Law.

Which would be a mistake, since the automatic permits do not fall under any condition of the provisions of article 16 of the Customs Law, and only function as a registry, in accordance with the provisions of article 21 of the regulations of the Customs Law.

Consulting in foreign trade is vital in this process because your customs agent must have the power to prevent this type of situation, since they are the difference between avoiding important penalties, optimizing resources and times, as well as carrying out safer and more efficient operations.

You might be interested in: Everything you need to know about trade in services

Everything you need to know about trade in services

Everything you need to know about trade in services

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Today, as globalization consolidates, it is more and more frequent that more and more companies decide to start with trade in services in order to seek new markets and increase their client portfolio.

However, we usually find ourselves with greater difficulties with regard to the trade of goods, especially in the legal sphere, since it is not possible to export any type of services, as occurs, for example, with health and education, which are services that have a public interest.

In addition, it is necessary to do a suitable investigation of the service market, to better know the target companies and we can offer them better service. Today we will talk about the agreements that govern trade in services.

General Agreement for trade in services

Regarding trade in services, it is necessary to take into account the General Agreement on trade in services (GATS) that regulates it.

Within the services to export, we have several types:

  • Trade-in cross-border services, where the provider and the client operate directly from their countries, without the need for any physical movement.
  • Reverse export, where the customer travels to the supplier’s country and receives the service.
  • Movement of individuals, where the service provider travels to the country of destination, in order to offer the service.
  • Establishment abroad, where the supplier establishes a headquarters in the destination country and from there, offers the service.

Legal aspects for the internationalization of services

Today many companies, both goods, and services, are choosing to internationalize, in order to reach other markets that allow, not only to grow the company but to survive due to issues such as the lack of internal demand, although there is less and less talk of internal and external demand, going on to speak simply of demand. However, this can generate numerous complications on the fly, since the regulations that govern the services offered by the exporting company may differ in some aspects, which should not be overlooked.

These aspects are:

  • The existence of international agreements between trading countries.
  • Whether the service we sell is exportable or not, in accordance with GATS regulations.
  • The political-legal stability of the country, which may hinder or promote the provision of the service in the destination country.
  • The taxation to be applied, since we are talking about operations with a third country, so international double taxation should be avoided. In the case of services to companies, this will imply that, within the legal framework of the EU, the company receiving services will not have to pay VAT, however, they must present an invoice within the period in which the tax prescribes. Likewise, it will also depend on whether or not the service is provided within the fiscal territory. In this case, the VAT levied in the destination territory will be passed on.
  • Administrative aspects. Taking into account that we are going to sell abroad, it is very important to know the administrative regulations of the country of destination, since we may find that some of these services cannot be traded.

You might be interested in: Freight Forwarder: everything you need to know

Singapore’s trade fell by 6.3% in the Q3

Singapore’s trade fell by 6.3% in the Q3

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Total merchandise trade fell by 6.3 percent in the Q3 from the same period last year, following the slightly-revised 15.3 percent decline in the previous quarter, said Enterprise Singapore.

The decline in oil trade outweighed the growth in non-oil trade.

Amid lower oil prices compared to a year ago, oil trade fell 39.5 percent in the quarter ended Sep 30, easing from the 61.9 percent contraction in the previous quarter.

Non-oil trade grew by 0.8 percent in the Q3, after the previous quarter’s 3.5 percent decrease.

On a quarter-on-quarter seasonally adjusted basis, total merchandise trade rose by 7.5 percent in the Q3, after the previous quarter’s 14.4 percent contraction.

The oil and non-oil trade grew by 38.6 percent and 4.5 percent respectively.

Non-oil exports in the Q3

Non-oil exports, which include non-oil domestic exports (NODX) and non-oil re-exports (NORX) rose by 2.8 percent year-on-year in the Q3, after the second quarter’s 1.9 percent decrease.

On a quarter-on-quarter seasonally-adjusted basis, it increased by 5.9 percent in Q3, following the 7.0 percent decline in the previous quarter.

NODX grew by 6.5 percent in the third quarter from the same period last year, higher than the previous quarter’s 5.9 percent raise

The growth was driven by expansion in non-electronic exports, notably non-monetary gold and specialized machinery.

On a quarter-on-quarter seasonally adjusted basis, NODX grew by 1.4 percent in the third quarter, following the 3.0 percent decline in the second quarter.

Growth was achieved as the increase in non-electronic NODX outweighed the decline in electronics.

Exports of non-electronic products, comprising 77 percent of total NODX, grew by 5.7 percent over the year in Q3. This followed a 4.6 percent rise in the second quarter.

Among non-electronic goods, non-monetary gold grew at the highest rate at 87.8 percent, followed by specialized machinery (40.1 percent) and food preparations (14.4 percent).

Electronic exports expanded 9.5 percent in the third quarter, lower than the 10.6 percent growth recorded in the previous quarter.

Incoterms provide security and transparency in international trade

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Carrying out a purchase and sale operation leads to a real need for the parties to establish clear rules for the negotiation, this in order to avoid inconveniences within the process, under this premise Incoterms are born.

Incoterms are nothing more than the most used international legal instrument in the world when performing a purchase or sale negotiation. It’s established by the International Chamber of Commerce and its use is generalized and accepted for sale contracts throughout the world.

It is important to have in mind that, as all legal regulations, their misinterpretation or application have often led to conflicts or litigation between the parties, that is why understanding their rules and adhering to them is essential when performing a contract.

Today rather than learning how to interpret them, we will talk about their importance in international trade and their latest updates.

What are Incoterms?

It’s the acronym for International Commercial Terms, a concept that groups together 11 international rules created, managed and control by the International Chamber of Commerce. The first date from 1936 and have suffered changes and updates.

Its main objective is both to facilitate the operation of international trade transactions and to establish a set of terms and rules that define the rights and obligations of both the seller and buyer.

Some of the Incoterms that are established in a sale contract are the following:

•          Free Alongside Ship

•          Cost and Freight

•          Carriage and Insurance Paid To

•          Delivered Duty Paid

Since January 1 of this year, the new rules of Incoterms 2020 came into effect.

One of the points that were improved in the Incoterms was a market need in relation to the bill of shipment.

The different levels of insurance coverage in Cost, Insurance, Freight or Transportation.

Includes arrangements for transportation with own means, delivered duty paid or delivery at terminal.

Includes the requirements for Cost, Insurance and Freight, among others

With the correct use of Incoterms, companies have confidence in the interpretation of the terms of negotiation between the buyer and the seller, since international rules are applied which help to define in detail the distribution of obligations between the parties, making a direct reference to the transport that is used and to the place where the documentation is delivered, as well as the procedures, expenses and payments that must be sent.

Customs agencies foster a safer global trade

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Due to the continues changes in the global economy, the international trade has become a primary activity to the economical grow and prosperity of any country. The world’s trade systems have changed significantly creating new methods for the purchase and sale of products that often require transportation from one continent to other.

The progressive increase in the international trade shows a prevailing need in the market of agents that provides advise, support and guarantees to those companies that needs to sell or buy a product somewhere else in the world but are unaware of the legal and logistic processes of this activity. Thus, several customs agencies appeared and, to a better understanding we will define it in this article.

Basically, the customs agency is the legal entity authorized to provide counseling services on customs matters focused on ensuring its users’ compliance of the legal regulations pertaining the import, export, customs transit and any operation or customs procedure intrinsic in such activities.

Therefore, a customs agency ensures the safe conditions so an entity may be able to trade a product or goods without further risks considering the legal regulations issued in the directives of the World Customs Organization (WCO).

Advantages of having a customs agency:

  • Endorse in the entire legal process of import and export.
  • Manage and facilitate the requirements needed prior to the dispatch/shipment or delivery of goods.
  • Provide counseling during the process of logistic management.
  • Promptness in the processes of dispatch/shipment and delivery of goods.
  • Decreases the operative costs.
  • Inspection and control of products.
  • Storage and distribution of goods.
  • Oversees the compliance of the international trade regulations.
  • Work with the authorities of each country to reduce tax evasion, smuggling and money laundering.

Obligations of the customs agencies:

All the advantages that the endorsement of a customs agency has to offer to your business or entity are based on the regulations of the WCO; among its responsibilities are:

  • Monitoring the services offered to the public.
  • Availability to provide services twenty four (24) hours.
  •  Integrated management of the logistic chain.
  • Authorization of the cargo inspections.
  • Declaration of goods.
  • System for the risk assessment of goods.
  • Previous electronic information.
  • Ongoing communication.
  • Assessment of the goods’ safety, among others.
  • Manage the transportation of the goods to the customs warehouse
  • Present before the customs authorities the necessary documentation to each process.

Due to the services provided by the customs agencies, the international trade activity currently can be performed safer and reliable; each day new private entities are added to the acquisition of this service securing their investment.

Now, therefore, considering the fundamental roll in the security and assistance of the global trade given by the customs agencies, ¿Have you evaluated the chance of getting this service for your company?