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An ABC of the ailing World Trade Organization

 Free trade or the fox in the henhouse

Over nearly 50 years, the GATT organized 8 rounds of negotiations aimed at ever-increasing liberalization of trade. The last one, known as the Uruguay Round (1986-1994), gave rise to the creation of the World Trade Organization in April 1994 at the Marrakech summit. The adoption of the final act [2] of this round was a milestone as it opened up the area of negotiations to sectors not yet covered by the GATT (agriculture, textile, services, etc.) and included for the first time the question of intellectual property rights in the context of international trade. The WTO
WTO
World Trade Organisation

The WTO, founded on 1st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.


was charged with articulating broader negotiations and promoting the liberalization of trade with renewed energy. The WTO now counts 164 member countries and has been presided by the Brazilian Roberto Azevedo since 2013.

Free trade, the WTO’s unrelenting objective, is in fact the strategy adopted by the dominant economies to enable them to remain the powerful economic actors they have become. Once they have the upper hand, it is in their interests to declare “now, let market forces come into play”. For the WTO, liberalization means obliging countries of the South to abandon any form of protection of their economies and open them up to the voracious appetites of transnational corporations.

“Any nation which by means of protective duties and restrictions on navigation has raised her manufacturing power and her navigation to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away these ladders of her greatness, to preach to other nations the benefits of free trade, and to declare in penitent tones that she has hitherto wandered in the paths of error, and has now for the first time succeeded in discovering the truth.”

Friedrich List, The National System of Political Economy [1841], translated by Sampson S. Lloyd, Longmans, Green & C°, 1909, pp. 295-6.

 The IMF-World Bank-WTO trio

Alongside the IMF
IMF
International Monetary Fund

Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
World Bank
World Bank
WB

The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.


couple, the WTO completes the powerful war machine whose aim is to prevent countries of the South from protecting vital sectors of their economies from voracious transnational appetites. To illustrate this, we have Article III, paragraph 5 of the Marrakesh agreement establishing the WTO: “With a view to achieving greater coherence in global economic policy-making, the WTO shall cooperate, as appropriate, with the International Monetary Fund and with the International Bank for Reconstruction and Development and its affiliated agencies.” Moreover, those two institutions enjoy observer status within the WTO. The WTO is equipped with its own settlement tribunal for handling disputes between States, the Dispute Settlement Body, enabling it to impose its own rules in defiance of the sovereignty of peoples.

Thus the World Bank and the IMF impose very strict neoliberal conditionalities which force indebted economies to open themselves up even wider to the global market. That market is dominated by highly industrialized countries and transnational corporations, most of which have their headquarters in those rich countries. The hierarchical way in which the connection of the economies of countries of the South to the global market has been enforced is damaging to their local producers, their domestic markets and to any possibility of strengthening South-South relations.

Contrary to the claims of neoliberal dogma, greater openness and stronger connections to the global market constitute an obstacle to the development for countries of the South. Total integration of a country of the South into the global market generates structural deficit of the trade balance
Trade balance
The trade balance of a country is the difference between merchandize sold (exports) and merchandize bought (imports). The resulting trade balance either shows a deficit or is in credit.
as imports grow faster than exports. That deficit tends to be funded by foreign loans. [3] Most countries in the South have thus come full circle on the vicious roundabout of indebtedness and dependence.

Furthermore, the WTO’s nuisance value stretches far beyond the domain of trade. The WTO is a key element of the mechanism set up by the proponents of neoliberal globalization to make it even stronger. The policies recommended by the World Bank-IMF-WTO trio are perfectly consistent and follow a detailed agenda with many facets (political, economic, financial, geostrategic…), that social movements must fight relentlessly.

 An ailing WTO

The WTO is ailing. Donald Trump’s administration has been applying an aggressive unilateral trade policy towards China and the European Union as well as towards other economic powers. In 2019 Washington prevented judges from being designated to the WTO’s Appeal Court which meant it was unable to function. [4] The Doha Round of negotiations launched in 2001 have been struggling to deliver results for years, undermined, among other things, by disagreements around China, which joined the WTO in 2001. Yet paradoxically, for almost twenty years liberalization has been carrying on despite the absence of any new agreement in the WTO. Bilateral, regional and plurilateral free trade agreements have been replacing multilateral agreements, extending the borders of free trade to places that the WTO has not yet reached. Nevertheless, the policies of the Trump administration have certainly created chaos and it is hard to see where this will lead.

The WTO needs to be abolished and replaced by a new multilateral global organization. The aim of such an organization, in the realm of trade, should be to guarantee the drawing up of a series of fundamental international pacts, beginning with the Universal Declaration of Human Rights and all the fundamental treaties on human rights, individual or collective, and environmental rights. Its function would be to oversee and regulate trade to ensure that it conforms rigorously to environmental and social norms (in particular the conventions of the International Labour Organization – ILO). This definition is in frontal opposition to the present objectives of the WTO. Obviously it implies a strict separation of powers. It is out of the question that a multilateral organization should contain its own internal tribunal, as is the case of the existing WTO. Thus the Dispute Settlement Body must be abolished.



Translated from the French by Vicki Briault Manus and Christine Pagnoulle (CADTM)

Fonte: http://www.cadtm.org/An-ABC-of-the-ailing-World-Trade-Organization

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SCPA announces Presidents’ Day gate operations | Brazil Modal

Reefer gates will be open at the Wando Welch Terminal and will be closed at the North Charleston Terminal.

Breakbulk / Ro-Ro operations (CST, UPT and Georgetown)

Gates at Columbus Street, Union Pier and Veterans Terminals will be closed 17 February 2020.

Breakbulk operations at the Wando Welch Terminal Warehouse and the North Charleston Terminal will also be closed.

Inland Port Greer

Inland Port Greer will be open and operating under normal hours. All inbound and outbound Norfolk Southern trains will be running as usual 17 February 2020.

Inland Port Dillon

Inland Port Dillon will be open and operating under normal hours. All inbound and outbound CSX trains will be running as usual 17 February 2020.

Fonte: http://brazilmodal.com.br/2015/internacional/scpa-announces-presidents-day-gate-operations/

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Algeria’s foreign exchange reserves plunge amid drop in oil revenues

Algeria’s public debt rose to 45% of GDP while its foreign exchange reserves continue to shrink on the back of falling oil prices in international market boding ill for the social peace of a country where dissent is growing.

Newly appointed Prime Minister Abdelaziz Djerad sounded the alarm bell recently while speaking to MPs about the country’s worsening debt saying “the financial situation is still fragile due to oil price volatility.”

The reserves that were amassed by the country during the era of expensive oil were not invested in productive areas that would help ease dependence on hydrocarbons.

The country’s reserves now stand at 62 billion dollars, down from 97 billion in 2017. The stockpile is expected to further drop in view of the expanding trade deficit, which hit 10 billion dollars in 2019.

The government is so far resorting to time buying measures such as spending cuts and import restriction leaving the economy hinging on oil price and sales.

The government would need crude prices nearer $100 a barrel to balance its budget, a target denoting a bygone era according to analysts as US continues to pump and export crude while renewable energy use is on the rise globally.

Meanwhile, Algeria plans other measures including tapping the international bond market, issuing Sukuk, or Islamic bonds, and develop its small stock exchange as the oil-reliant economy seeks to diversify funding sources, according to a government document reviewed by Reuters.

If Algeria managed to eschew the turmoil of 2011 the Arab Spring thanks to handing out oil money through salary hikes and subsidies, today it seems unable to buy off protesters who perceive the current ruling elite as a recycled from a corrupt but also inefficient regime.

The mass protests which are still ongoing since 22 February 2019, though at a lower scale, have exacerbated Algeria’s unfriendliness to investments adding to an underdeveloped banking system, unfriendly laws and an energy sector plagued by ageing fields, misguided economic policies, project delays, and infrastructure gaps.

The political crisis puts the country on the same course as Angola, Iran, Libya, Nigeria and Venezuela, referred to by OPEC as the “shaky six’ that suffer involuntary production cuts.

Algeria’s natural gas pipeline exports to Europe are getting squeezed by cheaper Russian supplies and a global abundance of the liquefied form of the fuel.

Algeria risks becoming a net gas importing country as its domestic production continues to be devoured by a rising consumption that could turn the country into a net gas importer in ten years, head of oil and gas at the ministry of energy Mustapha Hanafi had said.

Fonte: http://northafricapost.com/38091-algerias-foreign-exchange-reserves-plunge-amid-drop-in-oil-revenues.html

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Port of NY & NJ ends 2019 with record numbers | Brazil Modal

Port of New York and New Jersey, following a successful 2018, where it crossed 7 million TEU (20-foot equivalent units) mark for the first time, in 2019 broke that record to end the year with a total of 7,471,131 TEU (4,238,107 lifts), a 4.1 percent increase. This record-breaking number of loaded imports boosted the port’s standing to become the second busiest port in the nation in 2019.

A glance at 2019:

  • Imports at the Port of New York and New Jersey in 2019 reached 3,788,479 TEU (2,150,283 lifts), a 2.6 percent increase over the previous year’s total of 3,692,908 TEU (2,109,966 lifts).
  • Exports rose by 5.6 percent during 2019, reaching 3,682,652 TEU (2,087,824 lifts) compared to 3,486,880 TEU (1,985,488 lifts) in 2018.

December 2019:

  • Total volume was 584,743 TEU (330,856 lifts), a 4.0 percent decrease from the 609,390 TEU (346,926 lifts) posted in December 2018.
  • Imports fell by 8.8 percent, totaling 290,508 TEU (164,335 lifts) compared to the 318,426 TEU (182,403 lifts) posted in December 2018.
  • Exports totaled 294,235 TEU (166,521 lifts) versus 290,964 TEU (164,523 lifts) in December 2018, a 1.1 percent increase in TEU volume.

Rail volume also finished the year on the upswing, posting a 3.0 percent increase when compared to the same period of 2018. In December 2019, rail volume at the Port of New York and New Jersey rose by 4.9 percent over the previous year’s figure, totaling 54,508 containers.

 

Source: Container News

Fonte: http://brazilmodal.com.br/2015/internacional/port-of-ny-nj-ends-2019-with-record-numbers/

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Government – Ministry of Foreign Affairs and Trade

The Hungarian-Kuwaiti Joint Economic Committee held its third session in Budapest on 11 February 2020. The Hungarian delegation was led by the Ministry of Foreign Affairs and Trade’s State Secretary for Civil intelligence Tamás Vargha, while the Kuwaiti Co-Chair of the Committee was State Secretary Saleh Ahmed al-Sawari from Kuwait’s Ministry of Finance.

During his visit to Budapest, Saleh Ahmed al-Sawari held talks with the Ministry of Finance’s State Secretary for Public Finances Péter Benő Banai. During the course of the meeting, the parties emphasised the importance of economic, trade and investment relations between their two countries, and discussed budget-related issues.

At the plenary session of the Joint Economic Committee, the Co-Chairs highlights the fact that the third session of the body could give further impetus to the development of bilateral relations. There are major growth opportunities inherent within Hungarian-Kuwaiti trade flow and economic cooperation. Last year, the trade in goods between the two countries increased to double its previous level and achieved major growth with relation to both exports and imports, and accordingly both parties have an interest in the further expansion of trade relations. At the session, the parties reviewed the most important topics relating to bilateral cooperation, and particularly cooperation between their respective chambers of commerce, and the fields of agriculture and the development of agricultural research cooperation, water management, information and communications technology, higher education and tourism.

The parties agreed on the preparation of several high-level visits to be conducted in the near future and discussed the various agreements that cod soon be concluded, amongst others within the fields of media, culture and water management.

The State of Kuwait was the first in the Persian Gulf region with which Hungary established diplomatic relations, in 1964. In the over half a century since then, diverse contractual, political and economic cooperation has developed between the two countries, in view of which Kuwait occupies a priority place within Hungary’s system of middle Eastern relations. Kuwait is one of the most rapidly developing countries in the Persian Gulf, and thanks to its geographical position may serve as a gateway towards other countries, and accordingly Hungary is showing heightened interests in establishing a market presence in Kuwait. in accordance with the Hungarian Government’s foreign trade goals, it is promoting the appearance of Hungarian enterprises in the region. Thanks to its positive economic indices and favourable position in Central Europe, Hungary is a perfect target for foreign investment on the part of Kuwaiti enterprises.

Following the plenary session, the Co-Chairs signed the minutes of the meeting of the Hungarian-Kuwaiti Joint Economic Committee, and agreed that the following, fourth session of the committee will take place in Kuwait City.

(MTI)

Fonte: http://www.kormany.hu/en/ministry-of-foreign-affairs-and-trade/news/hungarian-kuwaiti-joint-economic-committee-holds-third-session-in-budapest

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Kalmar to support Houston’s RTG operations | Brazil Modal

Kalmar, a part of Cargotec, has been awarded a contract to supply the Port of Houston public container terminals with a suite of automation solutions for its rubber-tyred gantry (RTG) crane fleet, located across two sites.

The order, which comprises hardware installation and commissioning as well as system integration, was booked in Cargotec’s 2019 Q4 order intake, with the work scheduled to be completed by the end of 2020.

The Port of Houston handles about two-thirds of all the containerised cargo in the US Gulf of Mexico. The port is implementing the Kalmar SmartMap and Kalmar SmartStack process automation solutions for its fleet of over 100 Konecranes RTGs. The implementation work involves retrofitting and commissioning hardware on the cranes and performing related system integration work to integrate the solutions with the port’s Navis N4 terminal operating system (TOS).

Kalmar says its SmartMap provides real-time and historical visualisation of equipment location and container routing in the yard, while Kalmar SmartStack enables the creation of an automatically updated real-time stack container inventory in the TOS.

Fonte: http://brazilmodal.com.br/2015/internacional/kalmar-to-support-houstons-rtg-operations/

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US Department of Commerce’s harmful proposal

Last week, the US Department of Commerce finalised its rule on treating currency ‘undervaluation’ as a countervailable subsidy. It is a poorly conceived proposal and harmful to longstanding US international monetary and financial policies. Commerce gave little, hollow consideration to many comments submitted on its draft proposal.

It acknowledges that there is no precise way to measure equilibrium exchange rates and thus under/overvaluation. But it discusses a raft of possible measures and asserts that Commerce is accustomed to making difficult assumptions to undergird its (controversial) countervailing duty determinations. It is thus dismissive of this fundamental issue.

Commerce recognises that it must translate multilateral undervaluation into an estimated bilateral undervaluation. Yet, no explanation is offered on how it will do so. The degree of bilateral undervaluation with China, for example, varies if one believes the equilibrium bilateral balance is $400bn, $200bn, or zero. This critical point was not discussed. Economists dismiss the relevance of bilateral balances, but that is a side point in President Donald Trump’s administration.

Commerce correctly observes currency ‘manipulation’ and ‘undervaluation’ are not the same thing, and thus its exercise differs from Treasury’s foreign exchange reports. But taking China for example, it has a small current account surplus as a share of GDP, hasn’t been intervening for years, and the International Monetary Fund regards the renminbi as fairly valued. There is little indication how Commerce will take such factors into account, if at all, other than its references to defer ‘generally’ to Treasury.

It emphasises it will focus on ‘government action’ contributing to undervaluation. The euro can be seen as undervalued. It is overvalued for some members and heavily undervalued for others, such as Germany with its whopping current account surplus that distorts the global distribution of demand. Germany’s ‘undervaluation’ is partly associated with high national savings, including its continuously restrictive fiscal policies, which Berlin has been unwilling to change despite repeated international criticisms. Does the persisting restraint in German fiscal policy constitute ‘action’ or ‘inaction’?

The proposal comes across as insincere saying it will ‘not normally’ include monetary policy of an independent central bank in assessing ‘government action’. The People’s Bank of China is not independent. But ‘not normally’ goes undefined, suggesting Commerce may indeed take monetary policy into account. Clearly, if one is looking at ‘government action’, monetary policy becomes inseparable from macro policy and foreign exchange intervention can be integral to monetary policy.

The proposal ignores the impact of US policy. Imagine a world consisting of America and Country X. Let’s hypothesise that the US runs an expansionary fiscal policy, pushing up the dollar, which becomes overvalued, and that Country X is running balanced policies. Country X’s currency will nonetheless be undervalued, representing the flip side of the dollar’s policy-induced overvaluation. Presumably under this proposal, industry could file a claim and Commerce may sanction Country X.

The discussion of the Treasury Department’s role is damaging and disingenuous. Commerce observes repeatedly it will ‘generally’ defer to the Treasury, given the latter’s expertise on exchange rate matters. One might suspect that Commerce could drive a truck through such open-ended terms as ‘generally defer’, as well as ‘not normally’.

Commerce argues its proposal meets the World Trade Organisation’s test for a subsidy’s specificity. This is a novel interpretation, disputed by trade lawyers, experts, and the conclusion reached by the Bush and Obama administrations. Indeed, the Bush administration publicly stated so as diplomatically as possible.

Commerce’s draft proposal includes an economic impact assessment. The estimates proffered encompass a huge impact range from $3.9m to $3.14bn. The range is so large as to strain credulity and suggests Commerce sought blanket and unconstrained flexibility for itself. Despite much verbiage, the final proposal remains status quo.

The Treasury has long been the lead agency with responsibility for international monetary and financial policy. Exchange rates are not determined by just trade flows, but by capital flows responding to monetary, fiscal and other policies. Current account positions reflect macro forces, mirrored in saving and investment balances. Capital flows swamp trade flows. Yet, now Commerce – with zero expertise on currency matters – has usurped a huge role for itself on foreign exchange issues, presumably with the White House’s blessing and Treasury’s probable submission. This will hurt Treasury’s international standing and relationship with the IMF. It is a black mark on Treasury’s long distinguished history and traditions, and an ominous sign for foreign financial authorities.

The 1930s was an era of beggar-thy-neighbour currency protectionism and bilateralisation of exchange rate disputes. While our brave soldiers fought valiantly in world war two, our financial diplomats created an international monetary system seeking to avoid the sins of the past. Despite shortcomings, that system helped deliver unprecedented prosperity. To be sure, harmful currency practices exist and should be countered vigorously. But Commerce’s proposal is the wrong way forward. It is more in keeping with the protectionist ‘currency war’ mentality of the 1930s.

Mark Sobel is US Chairman of OMFIF.

Fonte: https://www.omfif.org/2020/02/us-department-of-commerces-harmful-proposal/

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New UK migration proposals will worsen logistics’ recruitment shortfall | Brazil Modal

Proposal to retain the ‘Level 3’ qualification requirement ‘would severely worsen the shortage of labour in the logistics sector if implemented’, says FTA.

New UK migration proposals this week will not solve the recruitment shortfall in the country’s logistics sector, and the proposal to retain the ‘Level 3’ qualification requirement “would severely worsen the shortage of labour in the logistics sector, if implemented” after the UK leaves the EU, according to the Freight Transport Association.

In response to recommendations made by the UK government-appointed Migration Advisory Committee (MAC) to reduce the £30,000 salary threshold for immigration post-Brexit but retain the Level 3 qualification requirement, Sally Gilson, head of skills policy at FTA, commented: “While FTA is pleased to see the £30,000 salary threshold has been reduced, the MAC’s proposal to retain the Level 3 qualification requirement would severely worsen the shortage of labour in the logistics sector if implemented; as such, it should be removed from the post-Brexit immigration policy.

“The UK desperately needs 59,000 HGV drivers just to keep operations afloat, but as this job only requires a Level 2 qualification, businesses would not be able to recruit non-UK drivers under the proposed system. The sector is heavily reliant on EU workers – these individuals comprise 13% of the entire logistics workforce – and with 64% of logistics businesses already struggling to fill vacancies, taking away the pool of non-UK workers would have devastating impacts for ‘UK plc’ and the wider economy.

“These standards would hit hardest the industries that are already suffering from labour shortages; they unfairly discriminate against vocational workers who provide a vital service to the UK economy.”

Gilson continued: “In an ideal scenario, we would be able to recruit UK workers to fill the shortfall, but with the UK experiencing record levels of employment, the sector remains reliant on migrant labour. The logistics sector wants to keep the UK trading – and will do anything possible to see this happen – but we need an immigration policy that provides the right framework; not just for the logistics sector, but for the wider UK economy.”

 

Source: Lloyd’s

Fonte: http://brazilmodal.com.br/2015/internacional/new-uk-migration-proposals-will-worsen-logistics-recruitment-shortfall/

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Us Foreign Trade

Agriculture in 2019 USDA to Expand Agriculture Export Opportunities on Seven Trade Missions in 2020 USDA Trade Mission Shines Light on Prosper …

Fonte: http://fibg.seelbach-imm.de/us-foreign-trade.html

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Gasum to Supply LNG to Equinor’s Shuttle Tanker Newbuilds | Brazil Modal

Image Courtesy: Gasum

As informed, the LNG bunkering deliveries will mainly take place off Skagen, the most northern part of Denmark, and in Mongstad, close to Bergen, Norway.

Gasum will use its 5,800 cbm LNG bunker vessel Coralius to carry out the operations.

“We’re happy to support Equinor in its ambition towards cleaner shipping,” Kimmo Rahkamo, Vice President at Gasum, commented.

“Last week (Jan 24) we celebrated the 200th ship-to-ship LNG bunkering performed by Coralius. That was a major milestone for us, increasing not only the numbers but also expanding the geographical area. We now bunker vessels over an area ranging all the way from Rotterdam to the Gothenburg waters.”

In February 2019, Equinor also signed an LNG bunkering deal with the Gas4Sea partners – Engie, Mitsubishi Corporation and NYK. Under the contract, Gas4Sea will supply LNG to Equinor’s four crude shuttle tankers planned to enter service in Q1 2020.

Fonte: http://brazilmodal.com.br/2015/internacional/gasum-to-supply-lng-to-equinors-shuttle-tanker-newbuilds/

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