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What can Canada and Germany learn from each other about multilateralism and international trade? | UToday

On Dec. 8, 2018, The School of Public Policy travelled to Berlin, Germany, to co-organize a roundtable discussion on multilateralism and implications of international trade. The roundtable was in conjunction with a gala award ceremony at which Chrystia Freeland, minister of foreign affairs, was presented with one of Germany’s highest honours.

The roundtable was organized in partnership with Atlantik-Brücke, a non-profit association founded in Germany to further friendship between Germany, the United States and Canada. The School is the home of Atlantik-Brücke Canada, the Canadian partner organization.

Freeland joined the roundtable to discuss the state of liberal democracies and effective multilateralism, leading a robust conversation about the rules-based international system and how Canada and Germany can work together, learning from one another as we navigate these turbulent times. 

The roundtable also hosted Dr. Ailish Campbell, Canada’s chief trade commissioner and Dr. Ulrich Nussbaum, state secretary for economic affairs and energy in Germany, who discussed the implications of international trade in a changing global order. Issues such as ease of movement of people, digital security and the public perception were top of mind for participants, who talked about what Canada and Germany can learn from one another, as well as how our countries can work more closely together to continue to be leaders in the global trading community.

German participants agreed that in these turbulent times, Canada is an even more important ally than ever. The roundtable provided an opportunity to bring together representatives of the business, academic and political communities on both sides of the Atlantic for insightful conversation and meaningful debate. Hosted at the Canadian Embassy in Germany, the discussion also highlighted remarks from Ambassador Stéphane Dion, Canada’s ambassador to Germany, and HE Sabine Sparwasser, German ambassador in Canada.

Dr. Pierre-Gerlier Forest, PhD, professor and director, James S. and Barbara A. Palmer Chair in Public Policy remarked, “The School’s fundamental mission is to build policy communities in which the best experts are engaged with private and public sector decision-makers. In an era of global problems, it is essential to pursue this goal beyond the borders of a single country and to partner with organizations such as Atlantik-Brücke, which aim at fostering fruitful conversations where various perspectives towards policy and international relationships are explored.”

Following the roundtable, Freeland was presented with the Eric M. Warburg Award by The School’s partners at Atlantik-Brücke. This award is presented for great accomplishments in transatlantic relations, and Freeland was honoured for her commitment to CETA (Comprehensive Economic and Trade Agreement).  She is the first Canadian to receive the award, and as Atlantik-Brücke’s Canadian partner, The School was pleased to be in attendance to celebrate this honour.


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Fuel Spills from Maersk Ship during Bunkering in Hong Kong | Brazil Modal

Illustration. Image Courtesy: Pixabay under CC0 Creative Commons license

“We can confirm that on January 6 our container vessel Maersk Gateshead had oil spilling during bunkering operations while at berth at Modern Terminal Limited in Hong Kong,” the statement read.

The company said that bunkering operations were ceased instantly and the leakage was stopped.

Hong Kong Marine Department and Environmental Protection Administration were informed and clean-up operations carried on throughout the day, on vessel deck, hull and sea surface.

The 4,340 TEU Maersk Gateshead, which arrived at the terminal in the evening hours of January 5, has suspended all cargo operations and is awaiting further instructions.

“Maersk takes this incident very seriously. In coordination with relevant authorities an investigation into the circumstances behind the incident has been launched,” the spokesperson added.


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Directives for processing of application for MEIS claims under Foreign Trade Policy 2015-20

Ministry of Commerce & Industry Department of Commerce Directorate General of Foreign Trade. Public Notice No. 68/2015-2020. New Delhi, Dated …


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Crew Evacuated from Fire-Stricken Yantian Express | Brazil Modal

Illustration. Image Courtesy: Pixabay under CC0 Creative Commons license

Namely, the shipping firm said that the ship’s crew of 8 officers and 15 seafarers “is unharmed and was safely transferred” to the salvage tug Smit Nicobar on January 5 and 6.

“Due to bad weather conditions, the fire has not been successfully contained yet and has significantly increased in intensity at times,” Hapag-Lloyd said, adding that firefighting support at the site is ongoing.

The fire broke out on January 3 in one container on Yantian Express’ deck and spread to additional containers.

“At this time, it is not possible to make a precise estimate of any damage to Yantian Express or its cargo,” the company continued.

The 7,510 TEU Yantian Express was on its way from Colombo to Halifax via the Suez Canal when the fire started. The ship is currently around 800 nautical miles off the coast of Canada, Nova Scotia.


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US-China trade talks, currencies in focus

The mainland Chinese markets, watched in relation to Beijing’s ongoing trade spat with Washington, slipped in early trade.

The Shanghai composite declined by more than 0.3 percent while the Shenzhen composite shed 0.36 percent. The Shenzhen component also fell 0.412 percent.

The U.S. and China are set to kick off their second day of negotiations on trade later today.

China said on Monday that it is willing to resolve its trade disputes with the U.S. on an equal footing, according to Lu Kang, spokesman at the Chinese foreign ministry.

Over in the U.S., Commerce Secretary Wilbur Ross told CNBC’s “Squawk Box” on Monday that U.S. tariffs have placed pressure on China’s economy and ability to create jobs to avert social unrest.

The U.S. and China slapped a series of punitive tariffs on each other’s goods last year, sparking concerns over a global economic slowdown.

In overnight market action on Wall Street, the Dow Jones Industrial Average closed 98.18 points higher at 23,531.35 while the S&P 500 gained 0.7 percent to finish its trading day at 2,549.69. The tech-heavy Nasdaq Composite also saw gains of 1.26 percent to close at 6,823.47.


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UK to remain in Common Transit Convention after Brexit | Brazil Modal

Continued membership of the convention will ensure simplified cross-border trade for UK businesses exporting their goods.

The UK is set to remain in the Common Transit Convention (CTC) after Brexit, simplifying some aspects of cross-border trade for UK businesses exporting their goods to other European countries.

Currently a member of the CTC while it is in the EU, the UK has now successfully negotiated membership in its own right after Brexit, the UK government announced yesterday (18 December). This would apply to any new trading relationship with the EU “or in the unlikely event of a no deal”, the UK government said.

The CTC is used for moving goods between the EU member states, the EFTA countries (Iceland, Norway, Liechtenstein and Switzerland) as well as Turkey, Macedonia and Serbia.

“Membership of the CTC will help ensure that trade moves freely between the UK and CTC members after the UK leaves the EU,” the government added. “It will provide cashflow benefits to traders and aid trade flow at key points of entry into the UK, as traders will only have to make customs declarations and pay import duties when they arrive at their final destination.”

UK Financial Secretary to the Treasury, Mel Stride said: We are a great trading nation and our goods are in demand all over the world. That’s why we are committed to ensuring that trade can continue to flow with as little friction as possible when we leave the EU.

“Membership of the convention will support traders both under a new trade agreement with the EU, or in the unlikely event of no deal. This gives businesses the continuity and certainty they need to plan for the future.”

Stride said membership of the CTC, and its supplementary convention the Convention on the Simplification of Formalities in the Trade of Goods, reduces administrative burdens on traders by removing the need for additional import-export declarations when transiting across multiple customs territories. It also provides cashflow benefits by allowing the movement of goods across a customs territory without the payment of duties until the final destination; countries that are not in the Convention would have to pay each time their goods crossed a border.

Commenting on the development, Pauline Bastidon, head of European policy and Brexit at the Freight Transport Association (FTA) said: “The invitation for the UK to join the Common Transit Convention (CTC) in its own right is great news for the country’s logistics industry, according to FTA, which has been pressing government and the EU to speed up the accession process for some time. In the event of no deal, traders making use of the CTC would be able to temporarily suspend the payment of duties and taxes, and to postpone customs clearance formalities until the goods reach their destination, rather than at the point of entry into the customs territory.

“This will be particularly attractive for UK businesses exporting into the EU. While it would not remove the need for border checks of a regulatory nature such as sanitary and phytosanitary checks on agri-food products, the CTC has the potential to reduce checks of a fiscal nature upon entry into the EU. What is now vital for UK business is to ensure that all necessary arrangements for use of the convention are made so that, from 30 March 2019, traders may fully benefit from the facilities offered by the CTC.”


Source: Lloyd’s


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Iran approves anti-money laundering bill to ease international trade | Business |


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Scrubber retrofits could rein in boxship capacity | Brazil Modal

Scrubber retrofits ahead of the 2020 sulphur cap could give freight rates a temporary boost by restricting capacity next year, according to Drewry.

The London-based analyst firm says that although containerships fitted with exhaust scrubbing technology will be in the minority, numbers are on the rise. This is despite the technology coming under fire, particularly so-called open loop scrubbers, which have been banned in some regions, including in Singapore.

If, however, the rising trend of scrubbers continues there is the potential for some supply-side disruption that could prove beneficial to carriers, Drewry says.

Depending on the size and type of vessel, a scrubber retrofit can take up to six weeks to undertake. Time enough to impact slot availability, according to Drewry.

“New regulation is expected to reignite the demolitions market after a down year in 2018 by weeding out more of the older, more heavily polluting ships that will no longer be economic post-2020, but at a more macro-level a number of trades could see deployment numbers temporarily reduced next year as more ships are taken out of service for retrofitting,” says Drewry.

Following a slow start, scrubber adoption to comply with low-sulphur regulation has picked up gradually.

Mediterranean Shipping Co leads the way in vessel numbers with those earmarked for retrofits representing nearly half of the overall total, but Hyundai Merchant Marine, CMA CGM and Maersk Line too have announced plans to adopt the technology on at least some of its fleet.

The latest count shows 266 retrofitted containerships, representing an aggregate capacity of 2.2m teu, according to Drewry.

“While the scrubber fleet only represents 5% of the fleet in number, it accounts for twice that ratio in teu capacity due to the emphasis towards larger ships being retrofitted,” it says. “Moreover, scrubber penetration is much more significant in the orderbook, which combined with more anticipated retrofits in time will lift the ratio higher still.”

On the major east-west trades, the penetration of scrubber-fitted ships is, as it stands, fairly low.

Drewry noted that on the Asia-Mediterranean trade only 17% of ships ran with scrubbers in November. Meanwhile, on the transpacific this number was around 10% on the Asia-North America east coast trade and 9% on Asia-North America west coast services.

Scrubber-retrofitted vessels on the Asia-northern Europe trade were even lower, representing 5% of the overall fleet.

“This means there is plenty of scope for those ships to be pulled from active duty next year to get retrofitted, which unless replaced will reduce overall utilisation and aid spot market freight rate inflation,” Drewry says.

The impact on the spot market will however depend on the extent of the retrofit wave, and how lines manage the process alongside void sailing programmes or if it will effectively replace it altogether, according to Drew


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Top US trade official voices concern over Peru logging

LIMA, Peru — The top U.S. trade official contends Peru's government is not living up to its commitment to combat illegal logging in a case that could …


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East-West box demand growth to slow next year | Brazil Modal

Weaker ocean freight market set to soften spot rates after February’s Chinese New Year holidays, analysts predict, with US-China frontloading causing many US importers to be overstocked.

Demand growth on Asia-Europe and transpacific headhaul ocean carrier services will slow next year, weakening spot rates in the first quarter of 2019 after February’s Chinese New Year holidays, according to analysts.

Although rates on the Shanghai Containerized Freight Index for Shanghai to Europe (base port) services increased to $832 per teu on 14 December, from $774 per teu a week earlier, according to Maritime Strategies International, headhaul volume growth of around 5% in October on Asia-Europe services will fall to 2-3% growth over the next six months.

The analyst said this would be due to the “sluggish” economic climate in the Eurozone where the most recent Purchasing Managers Index (PMI) data pointed to the weakest pace of expansion in four years.

“The UK, the region’s largest importer, (also) faces further Brexit-related uncertainty and signs of strain in the retail sector − a profit warning from online fashion retailer ASOS has focused minds this week,” said MSI.

“Lower oil prices will offset this to a degree, but while we continue to expect the consumer spending power backdrop to be more favourable next year, the recent run of poor economic data has led us to question our relatively positive demand forecast for 2019.”

As a result, MSI said on the Asia-Europe headhaul trade “we expect spot rates of around $740 per teu in February, and recovery to around $840/TEU by May”.

On the transpacific, pricing usually picks up in mid-December as importers look to replenish post-Christmas. However, most lines have now cancelled planned mid-month General Rate Increases because, due to the US-China tariff war − which has prompted major frontloading in recent months − many importers are reported to be overstocked.

“The US-China trade war, not seasonality, is currently driving Transpacific prices,” said Philip von Mecklenburg-Blumenthal, VP of FBX at Freightos. “I don’t envy procurement managers right now. Should they be using this time to make some hard sourcing decisions? Changing suppliers is always fraught with risk, let alone moving production to another country.”

With some analysts now forecasting a contraction in demand on the transpacific in 2019, MSI said the US-China tariff war and 90-day truce had greatly complicated the outlook and much would depend on whether shippers expected the two sides to reach an agreement before 1 March.

“We are sceptical that the US and China will reach a wider trade deal before March 1st, although there appears to be more goodwill than normal, and it is possible that an extension to the truce could be agreed,” said the analyst.

If a deal seems unlikely, renewed frontloading would bolster volumes on the trade in January, but the volumes already brought forward would limit the extent of this upside, according to MSI.

Mecklenburg-Blumenthal said transpacific rate volatility would likely increase at least until Chinese New Year in February. “With the uncertainty in tariffs, companies with agile supply chains have already prepared to move production to other locations and may now play with the timing,” he said. “Those with less flexibility in sourcing will play with stock levels.

“Carriers, who don’t have the capacity to react to sudden changes in demand, are now worried that if the tariff trade war escalates again, that they will be facing surplus capacity and plunging prices.”

MSI noted that an early Chinese New Year in 2019 would further complicate forecasts through the first quarter, particularly on the transpacific. The holiday will fall on 5 February, 11 days earlier than in 2018. This will bring the pre-holiday rush of orders forward ahead of factory closures, translating into a relatively strong January but weaker February and also narrowing the window in which shipments can reach the US prior to 1 March.

“Given this combination of factors we expect relatively weak markets in February, with further downside in Q2 if tariff rates rise to 25% in March,” said MSI.

On a monthly-average basis November saw improvement in both the Asia-Europe and transpacific freight markets. “Recent weeks have seen continued improvement on the Asia-Europe trade lanes but an expected correction in transpacific spot rates,” added MSI.

“At present Asia-Europe spot rates sit at around $830 per teu. Asia-US West Coast spot rates have fallen beneath $2,000 per feu and Asia-US East Coast beneath $3,000 per feu.

“All three trade lanes are in a stronger position than the equivalent point in 2017 − Asia-Europe spot rates are up around 13% year-on-year with a much stronger performance in the Med than North Europe, while the two transpacific trades are up 50-60% year-on-year.”


Source: lloyd’s


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