Taxiing on the apron

Chilean president visits region to talk trade

At home in Chile, Michelle Bachelet – that nation’s president, elected to her second term in a landslide vote in 2013 – works a tough balancing act.

Her Pacific nation is home to robust capitalists – mine owners, winemakers, fruit growers whose Southern Hemisphere seasons enable them to supply Americans in winter – and militant communist and anarchist groups, which press hard, and often successfully, for taxing the rich to pay for college tuition, retirement plans, health insurance. A socialist and a single mother, Bachelet governs in coalition with the Christian Democrats. On Monday in New York, she presided over a special meeting of the U.N. Security Council to help prevent wars.

But in Wilmington and Philadelphia this week, Bachelet is all business. At a warehouse at the Delaware port on Tuesday, she drew a crowd of U.S. and Chilean businesspeople and workers, and a collection of pro-free-trade Democrats – led by U.S. Sen. Tom Carper (D., Del.), U.S. Rep. John Carney (D., Del.), and Delaware Gov. Jack Markell, also a Democrat, who worked as a young banker in Chile in the 1980s before becoming a Comcast executive. Read more:

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Canada-South Korea free-trade deal shows small gains for both sides

Canada’s free-trade deal with South Korea will hurt the domestic auto sector, but the pain will be softened by the fact that Canadians will have a bit more money to buy new cars, according to the first detailed analysis of the trade pact.

 The Canada-Korea Free Trade Agreement took effect on Jan. 1, and the C.D. Howe Institute is releasing a report on Thursday that estimates the expected impact of the deal over the next 20 years.

Overall, the research concludes the deal will show small and comparable gains for both sides. Canada will get an additional $3.1-billion in gross domestic product in contrast to $2.3-billion for South Korea. However, South Korea will do slightly better than Canada when the effect is measured as a percentage of GDP, according to the institute.

The report projects production will decline by $114-million for auto makers in Canada because cheaper imports will be available from South Korea, which will increase its exports to this country by $1.2-billion. Read more:

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Chile, Japan to scrap tariffs for expansion of economic partnership

Chile and Japan are looking to expand their economic partnership by eliminating tariffs, Chile’s Ministry of Foreign Affairs said Monday.

A bilateral commission of the Chile-Japan Strategic Economic Partnership Accord met last week to discuss extending import tariff exemptions to more goods, the ministry said in a statement.

Chile and Japan, along with 10 other nations, are also interested parties to the Trans-Pacific Partnership, a wide-ranging regional trade and investment treaty that has been under negotiation since it was initially proposed in 2005.

The bilateral commission concluded two days of negotiations Friday in Chile’s capital, concretizing commitments made in September 2014 to expand tariff exemptions between the two countries. Read more: 

Truck Border Crossing

Non-tariff barriers dog EAC

DAR ES SALAAM, Tanzania – The East African Community (EAC) has been advised to set a target for intra-EAC trade growth for this year of 15% by promptly eliminating Non-Tariff Barriers (NTBs).

Peter Kiguta,  the Director General Customs and Trade at the EAC Secretariat was speaking at the 16th EAC Regional Forum on NTBs held recently.

He suggested the Chairpersons and Co-Chairpersons of National Monitoring Committees (NMCs) to exchange their contacts in order to redress NTBs when reported instead of waiting for the Regional Meetings. Read more: 

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Public Procurement in FTAs: The Challenges for Malaysia

Malaysia’s GDP was ranked by the IMF at 35th globally in 2013. The country has a major commodity sector and wide-ranging export-base manufacturing and service industries. Malaysia has great potential to grow through further trade liberalization. However, many of the goods and services produced now are typically supplied to government agencies under decades-long government procurement contracts. A Recent Study by Malaysia-based Institute for Democracy and Economic Affairs (IDEAS) points out that public spending on procurement currently stands at around 25 percent of the annual GDP in 2014. The study also shows that long-term government procurement policies have limited the competitiveness of domestic businesses, and have prevented the country from enjoying the full benefits of global trade. Read more:

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Nexus Between Trade, Rising Poverty

The relationship between trade and poverty is inverted. Countries with higher proportions of global trade tend to have less of poverty. Conversely, countries, which contribute the least to global trade have higher poverty rates. This shows the importance of good trade policies in reducing poverty rates and increasing prosperity. Also, this shows why there is intense competition for export markets even by countries that already control significant share of global trade. Trade facilitation is becoming critically important to the economy of poverty-stricken areas. Read more: 

Blog Share: Progress on TPP Deal With U.S. But a Gap Remains: Japan Official | By Lucian Cernat

Whether the 12-nation Trans Pacific Deal will conclude in the near future largely depends on the degree to which U.S. and Japan are willing to compromise on agriculture issues. Reuters reported last week that progress in U.S. talks with Japan towards a Trans-Pacific Partnership trade pact is encouraging, but difficult issues remain, the acting deputy U.S. trade representative said on Wednesday. Hopes of sealing the deal this year took a blow last month, when talks between the two nations seen as key to concluding the ambitious 12-nation trade pact hit a snag, with each side blaming the other for a stalemate over farm exports.The United States insists that Japan lower barriers to agricultural imports, but Japan wants to protect sensitive products, including pork, beef, dairy and sugar. “We were encouraged by the progress we made this week during our negotiations, but we need to underscore that the issues before us are tough,” Wendy Cutler told reporters at Japan’s foreign ministry, following four days of talks with Japan’s deputy chief negotiator, Hiroshi Oe. Read more: 

Hong Kong at evening

Protests raise fears for Hong Kong banking sector

PEERING down from their gleaming tower blocks at pro-democracy activists on the streets, Hong Kong’s bankers and traders cannot help but worry that the island’s financial community will pay a heavy price if the city further infuriates Beijing. Hong Kong lives with the threat that its crucial role as China’s biggest yuan hub will become diminished as business flows to the mainland’s growing financial centres, Shanghai and Shenzhen.The past week has seen the strongest protests yet in the former British colony against Beijing’s control. The idea that Hong Kong could become a hotbed of social discontent raises questions for bankers about how long the city can expect to receive the special treatment that has helped it to generate enormous business from China’s strategy of internationalising the yuan. Read more: 

 

Britain’s Free-Trade Case Against Europe

“The elemental case for secession is an economic one: The EU is taxing and regulating itself into irrelevance. When we joined in 1973, Western Europe accounted for 36% of global GDP. Today it’s 23% and in 2020 it will be 15%. ” Daniel Hanna, a member of the European Parliament said in his article Britain’s Free-Trade Case Against Europe published with Wall Street Journal. Political and social resistance to free trade agreement and market liberalization remain a major challenge to European Economy.  The world is recovering while the EU is not.   Read more: