(Datamonitor)
International freight rates have increased over H1 2010 due to reduced transport capacity and increased freight demand, a trend that has been reflected in upswings in price indices such as the Baltic Dry Index and Danske Bank’s European Freight Forwarding Index. However, forecasted overcapacity and sluggish growth in freight volumes are expected to reduce rates in H2 2010.
Freight volumes rebounded in 2010, with the strongest recoveries being seen in North America and Asia Pacific. Various macroeconomic indicators have registered an upswing, confirming that economic activity has been in traction. According to the World Trade Organization, merchandise exports grew by 7% in Q2 2010 compared to Q1, primarily driven by the resumption of industrial activity and global trade, and the restocking of inventory. JPMorgan Global Manufacturing PMI has also signaled a recovery in global manufacturing by registering consecutive monthly growth since July 2009. However, the rate of expansion is expected to ease slightly due to the slower recovery seen in Europe and Japan. Read more here.
Tuesday, September 7, 2010
WTO Chief Urges G-20 Leaders To Break Doha Impasse
(Associated Press)
The head of the World Trade Organization (WTO) on Monday called for Group of 20 leaders to make a big push to break the impasse in the WTO trade negotiations known as the Doha Round, expecting the long-stalled global trade talks may be concluded next year.
The Doha Round of trade talks started in the Qatari capital in 2001 to free up world trade by opening up markets and cutting tariffs and subsidies in rich countries.
But the 153-nation talks collapsed in 2008 as countries failed to meet on issues such as agricultural subsidies and industrial tariffs.
“We all know that this will not happen before the end of this year,” WTO Director-General Pascal Lamy said in a press conference Lamy said more efforts are needed to conclude the pending talks on the Doha Round, adding that the upcoming G-20 summit in Seoul may push the trade talks forward.
“Maybe next year, depending on the progress made on substance,” he said. Read more here.
China Says Will Increase Imports; Analysts Doubtful
(Rediff.com)
China has promised to “vigorously” expand imports of key products from around the world to balance its export driven trade, but analysts dismissed it as a mere lip service than a firm commitment. China, the worlds largest exporter, will “vigorously” expand its imports of key products to cut its trade surplus to avoid growing protectionism against its products in different countries, China’s deputy international trade representative Chong Quan said.
“We will especially encourage imports of products the nation is short of, especially advanced technology and key equipment,” Quan was quoted in the official media as saying.
Special attention will be paid to expanding imports from countries that China has a trade surplus with, he said at the China Import Forum. Read more here.
Proposed U.S. Cattle Rules More Bull For Canadians?
(Winnipeg Free Press)
Canadian livestock producers are in the unenviable position of being bystanders in yet another policy debate south of the border that could directly affect their futures.
The United States is Canada’s biggest market for exports of live cattle and hogs and when politicians there decided to move forward with country of origin labelling rules, farmers here took a direct hit on their bottom line -- either through reduced marketing opportunities or lower prices.
The latest debate is over new regulations proposed by the U.S. Grain Inspection, Packers and Stockyards Administration (GIPSA). The effects on Canada are less clear.
The new regulations, which are open to public comment, are designed to increase transparency in U.S. cattle markets. They would require a packer, contractor or live-poultry dealer to maintain written records to justify differential pricing offered to producers. Read more here.
Planned Border Closings Rankle Communities
(The Gazette)
Opposition is growing to the Canadian Border Security Agency’s (CBSA’s) recent decision to close two Canadian border stations south of Montreal next spring.
The mayor of Franklin, Suzanne Blair, will be holding a news conference next week to launch a petition drive. And the largest employer in the region, Les Vergers Leahy, has written federal authorities a strong letter of protest.
News of the proposed closings has also been greeted negatively south of the border.
Gary Douglas, president of the Plattsburgh-North Country Chamber of Commerce, told Plattsburgh’s Press-Republican that the unilateral decision by Canada to close the two border stations violates the 2002 U.S.-Canada Smart Border Accord.
“The failure of the Canadian government to co-ordinate with the U.S. government is absolutely mind-boggling,” he said. Read more here.
Friday, September 3, 2010
News from TAHOCO: Weekly Updates
An updated list of recently published
Manufacturing Growth Data From The US And China Helps Boost Markets
(MercoPress)
Manufacturing growth in the US and China improved in August, helping to boost global stock markets. The US sector expanded for its 13th straight month in August, according to the Institute for Supply Management. And China’s purchasing manager’s index, or PMI, has revealed its first gain in four months. China’s growth raised hopes that it will increase consumption of US exports, and help sustain America’s economic recovery.
In the US, the Institute said that its manufacturing index rose to 56.3 in August, up from 55.5 in July. A reading above 50 indicates growth. US factories have seen rising demand for exports and also from businesses that are renewing capital equipment and re-building stocks.
Meanwhile, China’s PMI, which measures manufacturing growth, rose to 51.7 in August from 51.2 in July. A separate HSBC survey also showed a rise, reaching a three-month high of 51.9 in August from 49.4 in July. Anything above 50 shows an expansion.
The data from the US and China helped this week to lift stock markets. However in China market performance was more erratic since there are concerns about slowing Chinese economic growth in the long term. Read more here.
Manufacturing growth in the US and China improved in August, helping to boost global stock markets. The US sector expanded for its 13th straight month in August, according to the Institute for Supply Management. And China’s purchasing manager’s index, or PMI, has revealed its first gain in four months. China’s growth raised hopes that it will increase consumption of US exports, and help sustain America’s economic recovery.
In the US, the Institute said that its manufacturing index rose to 56.3 in August, up from 55.5 in July. A reading above 50 indicates growth. US factories have seen rising demand for exports and also from businesses that are renewing capital equipment and re-building stocks.
Meanwhile, China’s PMI, which measures manufacturing growth, rose to 51.7 in August from 51.2 in July. A separate HSBC survey also showed a rise, reaching a three-month high of 51.9 in August from 49.4 in July. Anything above 50 shows an expansion.
The data from the US and China helped this week to lift stock markets. However in China market performance was more erratic since there are concerns about slowing Chinese economic growth in the long term. Read more here.
China Slams Allegations of Exchange Rate Subsidies
(AFP)
China dismissed allegations by US producers over its exchange rate as “groundless” on Wednesday, as Washington said there was no evidence that the undervalued yuan constituted a state subsidy.
The US Commerce Department said Tuesday it found insufficient evidence to probe allegations that China’s undervalued currency is the equivalent of a state subsidy to its manufacturers. The allegations were made by US producers angry about imports of aluminum products and coated paper from China.
“We noted the ruling made by the US Commerce Department... according to the related agreements of the World Trade Organisation, foreign exchange issues do not constitute subsidies,” China’s Commerce Ministry said. “We hope the US side will continue to follow WTO rules on cases of trade remedy and carry out (trade) probes in a prudent way,” it said in a statement, adding that specific allegations against the Chinese products were “groundless.” Read more here.
Trade Credit Allows Sellers and Buyers to Manage Business Risk
(World Bank)
A new working paper by Leora Klapper, Luc Laeven and Raghuram Rajan shows how suppliers and buyers use trade credit as a competitive gesture and risk-management tool. The authors draw on data from nearly 30,000 supplier contracts for 56 large buyers and more than 24,000 suppliers in Europe and North America, all of varying size, investment grade and sector.
The evidence points to four important — and not mutually exclusive — ways trade credit helps to manage risk: as a method of financing, as a means of price discrimination, as a bond assuring buyers of product quality, and as a screening mechanism to gauge buyer default risk.
In particular, the largest and most creditworthy buyers receive contracts with the longest maturities (as measured by net days) from smaller, investment-grade suppliers. By contrast, early-payment discounts seem to be used as a risk management tool to limit the potential nonpayment risk of trade credit. Early payment discounts are generally offered to smaller, non-investment grade buyers. The results suggest that contract terms are jointly determined by supplier and buyer characteristics.
Download the World Bank Policy Research Working Paper 5328 here.
Thursday, September 2, 2010
U.S. Fruit, Vegetable Exports Will Hit Record, USDA Says
(The Packer)
U.S. growers will export a record $6.2 billion worth of fresh fruits and vegetables next year, up 5.1% from this year, on increasing demand from Canada, Japan and the European Union, according to a government report
Fresh fruit and vegetable exports to Canada and Japan, and to a lesser extent the EU, “should continue to expand” as the world’s economies recover from recession, the U.S. Department of Agriculture reported.
Total U.S. horticultural exports in fiscal 2011, which begins Oct. 1, are also expected to hit an all-time high, climbing 7.5% from 2010 to $24.5 billion, according to the USDA.
Foreign markets for U.S. grain, meat, fruit and vegetable growers will continue to grow next year as Asia leads a global economic recovery, Agriculture Secretary Tom Vilsack said during a conference call after the release of the report.
“You’re seeing greater acceptance of the American brand in agriculture in 2010, and you’ll continue to see that in 2011,” Vilsack said. “We’re going to see more and more opportunities.” Read more here.
Tariff Wars: US Penalises Aluminum Imports From China
((domain-b.com)
Aluminum and glossy paper manufacturers had claimed that an undervalued currency acted as a subsidy for Chinese producers allowing them to undercut American competitors.
The Commerce Department rejected these arguments.
The petition became a cause celebre of sorts with American manufacturers as the Treasury Department refused to escalate matters with the Chinese by dubbing them as currency manipulators.
US Congressional lawmakers have been pressing hard to introduce legislation that would compel the Commerce Department to act in this regard and recognise China’s currency manipulation, if it fails to act on its own.
“The Commerce Department made its finding while still managing to ignore the elephant in the room, which is China’s currency manipulation,” Senator Charles Schumer, a New York Democrat, said yesterday in a statement. “Once again, even when the opportunity is thrust into its hands, the administration has refused to take action.”
Commerce department officials said the complaints were rejected as China’s currency policy wasn’t “specific to the enterprise or industries being investigated.” Read more here.
Aluminum and glossy paper manufacturers had claimed that an undervalued currency acted as a subsidy for Chinese producers allowing them to undercut American competitors.
The Commerce Department rejected these arguments.
The petition became a cause celebre of sorts with American manufacturers as the Treasury Department refused to escalate matters with the Chinese by dubbing them as currency manipulators.
US Congressional lawmakers have been pressing hard to introduce legislation that would compel the Commerce Department to act in this regard and recognise China’s currency manipulation, if it fails to act on its own.
“The Commerce Department made its finding while still managing to ignore the elephant in the room, which is China’s currency manipulation,” Senator Charles Schumer, a New York Democrat, said yesterday in a statement. “Once again, even when the opportunity is thrust into its hands, the administration has refused to take action.”
Commerce department officials said the complaints were rejected as China’s currency policy wasn’t “specific to the enterprise or industries being investigated.” Read more here.
‘Buy American’ Final Rule Issued by DHS
(Specialty Fabrics Review)
The U.S. Department of Homeland Security (DHS) rejected concerns about whether the buy American requirements for textile and apparel products in the American Recovery and Reinvestment Act sufficiently assists textile manufacturing in the U.S. The agency adopted, without change, the interim rule issued in August 2009, ignoring commenters’ call to have the new rules mirror the Berry Amendment that governs textile and apparel purchases by the Department of Defense. Objections to the new rules include concerns about de minimis exceptions to the rule, allowing use of non-domestically made parts, definition of the term ‘national security interests’ and refusing to make exceptions for preferred trading partners, such as Mexico, Canada and Chile.
The U.S. Department of Homeland Security (DHS) rejected concerns about whether the buy American requirements for textile and apparel products in the American Recovery and Reinvestment Act sufficiently assists textile manufacturing in the U.S. The agency adopted, without change, the interim rule issued in August 2009, ignoring commenters’ call to have the new rules mirror the Berry Amendment that governs textile and apparel purchases by the Department of Defense. Objections to the new rules include concerns about de minimis exceptions to the rule, allowing use of non-domestically made parts, definition of the term ‘national security interests’ and refusing to make exceptions for preferred trading partners, such as Mexico, Canada and Chile.
Heavy Border Traffic Expected for Labor Day Weekend
(Debbie Townsend — The Bellingham Herald)
Expect heavy traffic at all border crossings throughout this weekend as both the U.S. and Canada have national holidays Monday, Sept. 6.
Canadians also celebrate Labor Day, called Labour Day there. Like in the U.S., it’s considered the last hoorah of summer, and many services and businesses are closed, though lots of restaurants and retail shopping remain open. Call ahead if you’re unsure about a business’ status.
U.S. Customs and Border Protection has issued a reminder to travelers to have all their documents needed to cross the border and to plan extra time for border backups. Crossings usually are busiest from 7 a.m. to 7 p.m.
For updates on border traffic, go to wsdot.wa.gov/traffic/border/.
Wednesday, September 1, 2010
Monthly Surface Trade with Canada and Mexico Up Again
(World Trade Interactive)
The Department of Transportation reports that U.S. surface transportation trade in goods with NAFTA partners Canada and Mexico rose 4.6% from May to June. The $69.9 billion total for June represented a 37.6% jump from a year earlier. Surface transportation consists largely of freight movements by truck, rail and pipeline and in June accounted for about 87% of U.S. trade by value with Canada and Mexico.
Surface trade between the U.S. and Canada totaled $42.0 billion in June, up $1.8 billion from May and 35.5% higher than a year earlier. Exports by truck increased 34.2% by value from the previous year while imports by truck rose 35.8%. U.S.-Mexico surface transportation trade totaled $27.8 billion, up $1.2 billion from the previous month and 41.0% from June 2009. Exports by truck rose 34.5% by value from a year before while imports by truck increased 37.9%.
According to the DOT, the value of U.S. surface transportation trade with Canada and Mexico in June was up 17.5% compared to June 2005 and 38.0% from June 2000, including a 43.4% jump for exports and a 33.7% gain for imports.
Loosening of Controls on Exports Draws Fire
(Washington Times – Eli Lake)
Trade groups laud new Obama policies
The Obama administration’s overhaul of regulations aimed at loosening controls on the export of some military technology is drawing fire from groups that monitor arms proliferation but praise from trade groups.
President Obama on Tuesday announced the export-control policies in a video during the Commerce Department’s annual conference on updates to export controls. The policy seeks to streamline and standardize the licensing process for defense-related exports and create a new unified enforcement agency to crack down on violators of the export controls. [...]
Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, called the new policy a “defense industry bailout.” “The financial industry and the auto industry had their bailouts, now it is the defense industry’s turn,” he said. Mr. Milhollin also said the United States steadily relaxed arms-export controls since the end of the Cold War. “We have already reduced controls to the bone,” he said.
Mr. Milhollin said most defense technology being deregulated was developed with public money. “The lion’s share of the technology we are decontrolling has been developed with taxpayer dollars,” Mr. Milhollin said. “This is taxpayer-owned technology that the companies now want to sell to the whole world.” Read more here.
USDA Announces $150 Fee for Import Licenses Under 2011 Dairy TRQ
(World Trade Interactive)
The Department of Agriculture’s Foreign Agricultural Service has announced that it will charge a $150 fee for each license it issues to a person or firm authorizing the importation of certain dairy articles subject to tariff-rate quotas in 2011. Such dairy articles may only be entered into the U.S. at the in-quota tariff rates by or for the account of a person or firm to whom such a license has been issued. Licenses are issued on a calendar year basis, and each license authorizes the holder to import a specified quantity and type of dairy article from a specified country of origin.
Backlash Over China Curb on Metal Exports
(The Telegraph – Ambrose Evans-Pritchard)
China’s draconian export curbs on rare earth minerals needed by the rest of the world for frontier technologies is escalating into a serious diplomatic and trade clash with the United States and other leading powers.
Japan’s foreign minister Katsuya Okada issued what amounted to a formal protest at top-level meeting with Chinese officials in Beijing over the weekend, saying the sudden cut-off was “affecting the global production chain”.
It is the latest sign of rising pressure after angry complaints by companies outside China that rely on this family of 17 metals for hybrid cars, mobile phones, superconductors, navigation, and a host of high-tech industries. Read more here.
China’s draconian export curbs on rare earth minerals needed by the rest of the world for frontier technologies is escalating into a serious diplomatic and trade clash with the United States and other leading powers.
Japan’s foreign minister Katsuya Okada issued what amounted to a formal protest at top-level meeting with Chinese officials in Beijing over the weekend, saying the sudden cut-off was “affecting the global production chain”.
It is the latest sign of rising pressure after angry complaints by companies outside China that rely on this family of 17 metals for hybrid cars, mobile phones, superconductors, navigation, and a host of high-tech industries. Read more here.
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