U.S. and China in a snowballing trade fight

BEIJING -- Trade disputes between Beijing and Washington over exports of tires, chickens, steel, nylon, autos, paper and salt are multiplying and further damaging the already tense relationship between the two economic powers.

The Obama administration says it only aims to protect the country's rights, but the Chinese counter that the United States started the whole thing by launching an unprovoked attack.
The current tensions began in September, when the United States imposed a staggering 35 percent import fee on tires from China.

Economically speaking, the tariff was minor; it only applied to a couple of billion dollars in annual imports, less than 1 percent of the total annual trade volume between the two countries. But it infuriated the Chinese, who felt it was a political concession to U.S. labor unions rather than a legitimate punishment for something they did wrong.

The feeling was that "China should not just sit there and do nothing," said Lu Bo, a researcher with the Chinese Academy of International Trade and Economic Cooperation, a think tank under the Chinese Ministry of Commerce.

China fired back at the United States with a full arsenal of its own trade complaints.
As the world begins to emerge from the worst economic crisis since the Great Depression, there is growing concern that a rising tide of tit-for-tat protectionism is slowing the recovery.

Despite world leaders' repeated promises to minimize trade barriers, protectionist measures have spiked, according to a recent study by Global Trade Alert.

At least 130 protectionist measures such as state funds, higher tariffs, immigration restrictions and export subsidies are being planned by governments around the world, the trade analysts found. The World Trade Organization, in a report released in September, noted that many members largely had avoided the protectionist measures that exacerbated previous economic crises, but it still pointed to some "slippage." The WTO estimated that "anti-dumping" disputes (which involve accusations of predatory pricing by selling goods abroad below the price in one's home country or below the cost of production) will reach 437 this year -- more than double from 2008.

The European Union, for instance, may extend duties on leather-capped shoes from Vietnam and China for another 15 months. India banned toy imports from China for six months last year and recently levied duties on Chinese telecom gear. China last month imposed provisional duties on some Russian and U.S. steel products.

Extract from http://articles.washingtonpost.com/2010-01-04/world/36768176_1_protectionist-measures-world-trade-organization-trade-disputes

Entering Trans-Pacific Partnership would boost exports by $15.7B

VANCOUVER—Canadian exports could grow by as much as $15.7-billion if the federal government pulls the trigger on entering into the Trans-Pacific Partnership (TPP), according to the Fraser Institute.

According to a new study from the public policy think-tank, joining the TPP would provide a huge boost to the national economy and help move Canada away from its dependence on the United States as a trading partner.

“With the Conservative government signalling that international trade is a top priority, the TPP offers a chance for Canada to gain a foothold in the prosperous and growing Asian markets and move the country away from trade dependence on the United States,” international trade specialist and study co-author Laura Dawson said in a statement.

“Participating in the TPP is also important to safeguard Canada’s current trade agreements, particularly (the North American Free Trade Agreement) NAFTA.”
While Dawson calculates that the TPP could provide a $9.9-billion increase in Canada’s gross domestic product (GDP), she said the agreement could be equally as important in shaping the rules of future trade agreements and ensuring gains already made, such as NAFTA, are protected so Canada does not have to undertake costly reforms to adapt to a new system.

“The era of easy trade policy gains may be over but the disciplines imposed by the TPP on investment, regulatory alignment, rules of origin and market access will, in the longer term, help increase certainty, reduce risk, and lower costs for Canadian exporters and investors in emerging markets,” Dawson said.

Entering the TPP trade agreement would secure a trade alliance between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore the U.S. and Vietnam, representing a combined economy of more than $27-trillion and about one third of global trade.

Additionally, the TPP has the potential to expand to include all Asia-Pacific Economic Cooperation (APEC) countries, providing for greater market-access gains in the future, the study.
“A significant attraction of the TPP is engaging China,” Dawson continued. “If China were to join, the TPP would become the first regional agreement to include the world’s three largest economies: the United States, China and Japan.”

The study also notes that when Canada negotiated the NAFTA and World Trade Organization (WTO) agreements in the early 1990s, issues such as electronic commerce, digital media and third-party logistics had not yet entered the commercial mainstream.

The TPP agreement provides a platform for discussing and resolving these and other emerging issues.
“If Ottawa is serious about diversifying Canada’s trade relationships, then TPP membership is a golden opportunity to do so,” Dawson said.

Souce: www.canadianmanufacturing.com

Spices exports up 22% in FY'13 to 7 lakh tonnes

The nutrition post

NEW DELHI: Spices exports rose by 22 per cent to 6,99,170 tonnes during 2012-13 on account of sharp jump in garlic shipments.

Total exports stood at 5,75,270 tonnes in the previous fiscal, as per the data of Spice Board of India.

In terms of value, spices exports increased by 14 per cent to Rs 11,171.16 crore during last fiscal from Rs 9,783.42 crore in 2011-12.

The exports, in terms of both quantity and value, were higher than the target. The board had fixed the spices exports target at 5,66,000 tonnes and Rs 8,200 crore for 2012-13.

According to the data, there was almost ten-fold jump in the exports of garlic to 24,000 tonnes in 2012-13 from 2,200 tonnes in 2011-12. In terms of value, garlic exports jumped more than four times to Rs 74.49 crore in the current fiscal from Rs 14.15 crore a year ago.

Exports of chili, which is the biggest contributor to the total exports of spices in terms of quantity, rose by 17 per cent to 2,81,000 tonnes during 2012-13 from 2,40,000 tonnes in the previous fiscal.

Besides garlic, fennel and cumin also recorded increase in the exports during 2012-13.

Shipments of fennel increased by 80 per cent to 14,575 tonnes in 2012-13 from 8,100 tonnes a year ago valued at Rs 114.02 crore.

Cumin exports increased by 76 per cent to 79,900 tonnes in 2012-13 from 45,500 tonnes previous year valued at Rs 1093.17 crore.

However, exports of pepper and cardamom registered a decline of 40 per cent and 52 per cent, respectively, in 2012-13 as compared to the previous fiscal.

India is the world's leading spice producer, exporter and consumer.

Source: economictimes.indiatimes.com

Obama's Ambitious Trade Agenda

By Patrick Christy

At a time when the U.S. economy is struggling to recover, President Obama has thrown his support behind talks for two ambitious trade deals aimed at reducing trade and investment barriers in the Asia-Pacific and Europe. While the two free-trade agreements are far from completion, both would strongly benefit the United States economically and strategically.

Friends with Economic Benefits
First, the United States and the European Union are set to start negotiations for a comprehensive trade and investment pact sometimes known as the Transatlantic Trade and Investment Partnership (TTIP). With the two sides exchanging roughly $2.7 billion in goods and services each day, American and European economies already make up the world's biggest and most prosperous market – roughly 54 percent of global gross domestic product (GDP) in terms of value, or 40 percent of global GDP in terms of purchasing power.

At a time when the 27-nation European Union is still grappling with residually high unemployment and stagnant growth, further reduction of America's and Europe's already low tariff levels and trade barriers could reinvigorate elements of both economies. A study conducted by the U.S. Chamber of Commerce suggest that eliminating transatlantic tariffs alone "would boost U.S.-EU trade by more than $120 billion within five years."


In a Wall Street Journal op-ed, Stormy-Annika Mildner of the German Institute for International and Security Affairs and Claudia Schmucker of the German Council on Foreign Relations add: "Eliminating tariffs could, in the long run, add 1.33 percent annually to U.S. GDP and 0.47 percent to EU GDP, according to the research firm Ecorys. Substantially lowering non-tariff barriers would add 0.28 percent annually to U.S. GDP and 0.72 percent to EU GDP."

Second, the United States is engaged in negotiations for a Trans-Pacific Partnership (TPP) agreement that would promote economic integration and liberalization with 11 other countries – namely, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The proposed pact would level the playing field throughout portions of the Pacific Rim for American goods by reducing tariffs from member states over a ten year period.
A number of Asian economies would also be forced to decrease support for state owned businesses, opening new markets for a number of U.S. companies. The TPP's eventual goal would be to create vast free-trade zone across the entire Pacific that would encompass approximately two-fifths of the world economy.

Friends with Strategic Benefits
In addition, these two agreements would enhance U.S. strategic interests.
The TPP is a key component of the Obama administration's "rebalance" to the Asia-Pacific. Similar to the U.S.-South Korean free-trade agreement (enacted in 2012), the TPP would strengthen long-term strategic ties with key allies and partners, and ensure America's economic presence in the region for years to come. At the same time, new market opportunities would decrease the region's overreliance on trade with China

Equally important, the agreement would encourage further economic and political reforms among TPP nations, notably non-democratic Vietnam. Asia's post-World War II history shows that close economic cooperation with emerging nations can profoundly advance America's pro-democracy agenda – look no further than Japan and South Korea, both of which once had militaristic regimes. As President Obama stated in his November 2011 address to the Australian Parliament, "over the long run, democracy and economic growth go hand in hand. And prosperity without freedom is just another form of poverty."

The U.S.-E.U. agreement would reinvigorate relations between Europe and the United States at a time when many European leaders worry  that the Obama administration's "rebalance" to the Asia-Pacific will come at the expense of transatlantic ties. Despite occasional differences on both sides of the Atlantic, the United States and Europe are bound by history, common interests, and shared values.
In particular, European nations who are aligned with NATO remain America's strategic partners of "first resort" – countries that the United States works with in concert on key international matters. Indeed, NATO's 2011 mission in Libya and ongoing efforts in Afghanistan reflect these common interests and shared values.

Rising Challenges and Opportunities
In order to realize the economic and strategic benefits of these two agreements, there are important steps that policymakers and lawmakers in Washington should take.

First, the Obama administration must genuinely lead on the trade agenda. Trade negotiations can be long, difficult and sometimes frustrating, even more so when they involve multiple countries. TPP negotiations are still behind schedule, despite President Obama's 2009 words of support for the TPP and 16 rounds of multilateral talks.

Without strong and proactive U.S. leadership on trade, talks with the European Union could get bogged down as well. French trade minister Nicole Bricq is already urging negotiators to move at a slower pace. President Obama must make clear that these two pacts are key pillars of his second term agenda. Failure to do so risks endless delays and fewer economic opportunities – and jobs – for Americans.
Second, lawmakers should use congressional oversight hearings, public statements, and even legislation to make clear to the Obama administration that these two trade pacts are top priorities. Despite political gridlock in Washington, trade enjoys broad support on Capitol Hill. For example, when President Obama finally submitted free-trade agreements with Colombia, Panama, and South Korea for congressional approval in 2011, lawmakers moved quickly to ensure their passage with bipartisan support.

Third, lawmakers should renew the White House's trade promotion authority (TPA). House Ways and Means Committee Chairman Dave Camp has argued TPA would give the President "the tools to move more job-creating trade agreements." Previous "fast-track" authority – which expired in 2007 – had authorized the President to enter into trade agreements with foreign nations and required lawmakers vote on those agreements, without amendments, within 90 days of being submitted to Congress. However, Democrats in the House of Representatives changed the rule in April 2008 in order to block consideration of President Bush's free-trade agreement with Colombia, effectively shelving the agreement for the next three years.
President Obama noted in his State of the Union address that free-trade deals with Europe and the Asia-Pacific are in America's economic and strategic interests. With Democrats and Republicans behind him, the White House should work quickly to ensure both agreements become reality.

Source: usnews.com

3 Key Trade Trends the U.S. Can't Ignore

By Edward F. Gerwin Jr

When America debated the North American Free Trade Agreement in 1993, Groundhog Day – a film about doing the same things over and over – was a box office hit. Since then, our trade debates have often been like Groundhog Day, with trade supporters and critics repeatedly recycling well-worn talking points. But before everyone dusts off old scripts for upcoming debates about trade deals with Asia and Europe, it's worthwhile to consider what America might learn from more recent trade developments – especially those currently happening outside the United States.

The Jersey Journal, Reena Rose Sibayan /AP Photo

Three trends in global trade highlight why it's more vital than ever that America continue to play a strong role in writing robust rules for trade.


1. America's Not the Only Game in Town. As America works to conclude a Trans-Pacific Partnership trade deal and to ramp up new trade talks with the European Union, it's important to remember that other major economies are also pursuing a bevy of new trade deals.

There are already hundreds of trade agreements in force among groups of countries that don't include the United States, with many more under negotiation. The EU, for example, is negotiating agreements with Canada, India and Japan. And China, Japan and South Korea have begun talks on a pact that would boost trade among the world's second-, fourth- and twelfth-largest economies. These three countries – together with 13 regional neighbors – are also negotiating a massive Regional Comprehensive Economic Partnership that would tie together 16 countries with a combined GDP of over $26 trillion. For the United States, the implications of growing trend are clear – if we don't continue to engage in developing new norms for global trade, global competitors like China surely will.

2. Not Everyone Shares America's Priorities. In negotiating for the Trans-Pacific Partnership and other trade initiatives, America traditionally seeks comprehensive agreements that cover the full range of trade-related challenges in the global economy: expanding market access for American goods and services, advancing rules to protect U.S. investments and intellectual property, eliminating non-tariff barriers and promoting important ideals like labor rights and environmental protection.

In contrast, other countries often take a much more limited, low-standard approach to the role and content of new trade agreements, frequently excluding a wide range of products and services and ignoring vital issues. Take the new China-Japan-Korea trade negotiations: When they recently outlined the key topics for their trade talks, China, Japan and Korea did not include issues that the United States regards as critical, such as information technology, the environment and labor and employment.
For American businesses, workers and consumers, this means that we can't count on others to forge new trade rules that reflect our priorities and values.

3. Other Countries Lack America's Leverage.  Over the last two decades, America has concluded comprehensive trade deals with 20 countries. We've significantly opened up foreign markets and advanced U.S. commercial interests – and key values – by employing our significant leverage in two ways:

• First, access to our $15+ trillion economy provides a major inducement to other countries to eliminate barriers, adopt fair rules and enforce environmental and social protections.

• Second, because U.S. trade agreements are comprehensive – with few carve-outs or exclusions – our negotiating partners must broadly open their markets if they want to reach a trade deal with the United States.

The many other countries currently negotiating new trade deals often have much less leverage than the United States. Smaller countries that share important values with the United States have often had less success in advancing these principles because they offer only limited market access. And larger economies that take large numbers of products and issues off the negotiating table often lose the leverage they need to get the concessions they want. This is likely one reason, for instance, why Japan was recently unsuccessful in including labor and the environment as priority issues in its trade talks with China and Korea.

The United States brings substantial leverage to trade negotiations. But to maximize this leverage our own trade offers must remain truly comprehensive, and we must resist the urge to keep protected sectors off the negotiating table.

The global economy will continue to see a proliferation of new trade agreements in the years ahead. But who will write them? What will they say? Will countries like China increasingly be able to advance low-standard deals that ignore commercial priorities and values that are critical to America? Or will America stay in the game, work with like-minded nations, and use our considerable leverage to forge deals that reflect our key interests and vital principles?

As America prepares for important trade debates, it's time to revise our scripts to ensure that they answer these critical new questions.

Source: usnews.com

How foreign companies evaluate the Russian market

A clear verdict – falling both positively and negatively – is how member businesses of the Committee on Eastern European Economic Relations and the German-Russian Chamber of Commerce (AHK) evaluate the business climate in Russia in 2013 according to a recent survey. International Trade News lays out the arguments on both sides

ADVANTAGES:

 

Securing growth and profit
The companies surveyed see opportunities for growth and profit as the greatest advantage of the Russian market. They are followed by the market’s great consumer demand, and in third place, its perceived low tax burden.

Where the action is: the energy, automobile and construction industries
The energy market – including electricity, oil and gas – is an unchallenged market primed for the future. Industry leaders also expect strong chances for growth in the coming years in the automobile industry and in construction.

Business situation looking slightly up
Compared with 2011/2012 figures, the business situation is improving for many survey respondents. Roughly 13% describe their situation for 2012 as being ‘very good.’ Just a year before, only 10% evaluated it in such a way. At mere 3% (in 2011, 9%) said their situation was ‘bad.’

Hungry for investment
The survey’s respondents want to invest in new employees and facilities. Almost two thirds (65%) plan new hires. Roughly half (49%) are pursuing con-crete investment plans, which they estimate at about 800 million EUR. Since just a third of businesses provided concrete sums, the total amount being invested is assumed to be in the billions.

Russia’s joning into the World Trade Organization shaking up business
Over three fourth of respondents expect Russia’s joining into the World Trade Organization to invigorate Russia’s business climate in 2013.

Top locations Moscow and St. Petersburg
A ranking of Russian business locations with the best investment climates: Moscow, St. Petersburg, Tatarstan, Krasnodar (in the Olympics region) and Nizhnij Nowgorod.
                                          
DISAVANTAGES:

The industrial ‘Mittelstand’ does not exist in Russia
Russia’s midsize businesses are still not a motor for industrialization, which also has negative consequences for foreign businesses. An estimated three fourths of all medium-sized Russian firms are considered part of the service industry or come from trade.

Supply structures are weak
German investors complain about the lack of supply structures for midsize firms in Russia.

Acute lack of skilled professionals
Russian businesses and foreign investors alike are suffering from an acute lack of highly specialized skilled professionals – especially outside of metropolitan areas.

Exasperating bureaucracy
Bureaucratic structures can create time-wasting barriers to investment projects. One example here is the very long process to obtain permits.

Corruption
Businesses see bureaucratic hurdles as the second greatest hindrance to investment. On the Corruption Perception Index of 2012, put together by Transparency International, Russia is far down the list – at 133rd place.

|International trade news|

Canada - India trade agreement

The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, today announced the conclusion of the seventh round of negotiations toward a Canada-India comprehensive economic partnership agreement. Negotiations took place in New Delhi on February 5 and 6, 2013. “Our government is committed to building on our already-strong ties with India to create a partnership that will lead to jobs, growth and long-term prosperity for workers in both our countries,” said Minister Fast. “More than a million Canadians of Indian origin is clear proof of how both business and people-to-people ties are helping us deepen the Canada-India relationship.”

Negotiations this week were productive and focused mostly on market access and related areas.
A Canada-India joint study concluded that a trade agreement between the two countries could boost Canada’s economy by at least $6 billion. That translates to almost 40,000 new jobs across the country, or a $500 boost to the average Canadian family’s annual income.

Canada has identified core economic opportunities in India in the energy, agriculture, infrastructure and education sectors.

In less than six years, Canada has concluded free trade agreements with nine countries: Colombia, Honduras, Jordan, Panama, Peru and the European Free Trade Association member states of Iceland, Liechtenstein, Norway and Switzerland. In addition to India, Canada is engaged in negotiations with large, dynamic and fast-growing markets, such as the European Union, Japan and the countries that comprise the Trans-Pacific Partnership.

February 6, 2013  |Foreign Affairs and International Trade Canada|

China Rejects Status As World’s Biggest Trader

BEIJING — China has a new status its government doesn’t want — world’s biggest trader. Official Chinese and American trade data indicate China passed the United States last year in total imports and exports by a margin of $3.866 trillion to $3.822 trillion. That is about $44 billion, or just over 1 percent of China’s total.

The Commerce Ministry has taken the unusual step of publicly denying China is the new No. 1. It says China still trailed the U.S. by $15.6 billion last year — or a razor-thin 0.3 percent — under World Trade Organization standards for valuing goods.

Beijing wants to be a global leader but insists it still is a poor country. It is wary of any change that might erode that status and fuel demands for action to stimulate the global economy or concessions on trade and climate change.

“I think there is some concern from the Ministry of Commerce that this might be used as evidence by Western countries that China is not doing its part to rebalance the global economy,” said Xianfang Ren, China analyst for IHS Global Insight.

China’s explosive trade growth has abruptly altered global business. It created new opportunities for some but prompted complaints by the United States and others over its multibillion-dollar trade surpluses, market barriers and currency controls.

In just five years, China has surpassed the United States as a trading partner for much of the world, including American allies such as South Korea and Australia, according to an Associated Press analysis of trade data.

As recently as 2006, the U.S. was the larger trading partner for 127 countries, versus just 70 for China. By 2011 the two had clearly traded places: 124 countries for China, 76 for the U.S.
Trade is especially sensitive amid anxiety over a possible global slowdown. Beijing’s trading partners accused it of hampering a recovery from the 2008 crisis by obstructing access to its market.
For 2012, Beijing reported a $231 billion global trade surplus on exports of $2.049 trillion and imports of $1.818 trillion. The United States reported $1.547 trillion in exports and $2.335 trillion in imports, for a deficit of $788 billion.

Fragment |AmericanEconomicAlert.org|