Dear International Trade and Investment Committee Members,
Here are the international trade and investment articles and publications of interest for the week of August 18 to 24. Daniel Hohnstein has curated this week’s edition. Dan is an associate at Borden Ladner Gervais LLP in Ottawa, practicing primarily in the International Trade and Commercial Litigation Groups.
Top News
- The European Union lifted its year-long import ban on herring and mackerel from the Faroe Islands on Monday, ending a dispute over alleged over-fishing in the northern Atlantic.
- China said on Monday it regretted World Trade Organisation members had failed to reach an agreement on simplifying global customs rules, a breakdown it said could damage multilateral trade.
- The euro zone's trade surplus grew more than expected in June from June a year ago, data showed on Monday, but the improved surplus does not yet reflect the full effect of sanctions and counter-sanctions imposed by the European Union and Russia over the conflict in Ukraine.
- Russia will allow imports from neighbouring Belarus and Kazakhstan of food processed from Western raw materials as Moscow seeks to damp down domestic food price rises triggered by its ban on food imports from the West.
- Poland has asked the European Commission to lodge a formal complaint to the World Trade Organization (WTO) over a Russian ban on EU food products that has hit Poland particularly hard, the Polish Economy Ministry said on Tuesday.
- The Canadian government, which has been pushing free-trade deals with other countries as a key part of its agenda to bolster economic growth, is turning its attention to internal trade barriers. Industry Minister James Moore on Wednesday unveiled a proposal to modernize the country's 20-year-old internal trade deal which, among other things, prevents consumers from buying products such as wine directly from other provinces.
- Canada has succeeded in striking international trade deals even as it deals with internal trade barriers which cost the domestic economy billions of dollars annually. The Conservative government is moving to address the issue, proposing on Wednesday two options to modernize an existing 20-year-old intergovernmental agreement on internal trade.
- Russia’s ban on imports of western food could cost the European Union an annual 6.7 billion euros ($9 billion) in lost production, according to ING Groep NV (INGA). “The potential effects of the Russian embargo on imports of Western food go far beyond the effects,” of fruit and perishable vegetables, economists including Raoul Leering at Amsterdam-based ING said in a research note. Their calculations, which include the “value added” created by international trade, put the number of jobs at stake at 130,000.
- Belarus, aiming to boost food exports to neighbouring Russia, has cancelled a ban on live cattle from the European Union, Yuri Pivovarchuk, the head of veterinary surveillance at Belarussian agriculture ministry, said.
- The U.S. has lost a key round at the World Trade Organization in a trade dispute with Canada and Mexico over meat labeling, according to people familiar with the WTO's findings.
- A World Trade Organization panel has ruled against the United States in a trade dispute over meat labels with Canada and Mexico, according to a Wall Street Journal report.
- The U.S. International Trade Commission on Friday voted to impose anti-dumping duties against steel pipe imports from six countries, exempting two, handing a victory to domestic producers who had complained that the cheap imports were undercutting their prices.
- The United States has approved anti-dumping duties against South Korea and other producers of steel pipes for the energy sector, a victory for domestic producers hoping to benefit from a boom in the U.S. shale oil and gas industry.
- A World Trade Organization dispute panel ruled against Argentina on Friday in a 2012 case brought by the United States, European Union and Japan against the South American country's licensing rules used to restrict imports.
- China has appealed against a WTO dispute panel report on anti-dumping duties applied on certain Chinese products by the United States, the World Trade Organization (WTO) said on Friday.
Other News of Note
- German luxury carmaker Mercedes-Benz has been found guilty of manipulating prices for after-sales services in China, the official Xinhua news agency reported, citing regulators.
- Government investigators in China have found the Mercedes-Benz unit of Daimler, the German automaker, in violation of antitrust price rules, the Chinese state news media reported on Monday. The announcement was the latest in a spate of inquiries over pricing and sales policies that have raised pressure on foreign corporations across China.
- The world’s largest shipping company says it is sending more containers around world, a sign that global trade – and possibly economic growth – is picking up. On Tuesday, A.P. Moller-Maersk AS, which investors monitor as a bellwether for world trade, increased its earnings outlook on the back of a rise in freight volumes, a promising development at a time when a major economy like China is slowing and much of Europe remains stagnant.
- JX Nippon Oil & Energy Corp is looking at building refineries and petrol stations in Indonesia and Vietnam as fuel consumption slumps at home, in what would be its first major downstream oil investment in Asia outside Japan.
- A. P. Moller-Maersk, the world’s largest shipping company, says it is sending more containers around the world, a sign that global trade and possibly economic growth are picking up. On Tuesday, the company, which investors monitor as a bellwether for world trade, lifted its earnings outlook on the back of an increase in freight volumes. It said shipping volumes rose 6.6 percent in the second quarter, one of several factors that caused its net profit to more than triple, to $2.3 billion.
- The world’s largest shipping company is seeing signs of stronger global container traffic, something already reflected in activity at several Canadian ports where trading volumes have been on the rise.
- Japan’s exports rose in July for the first time in three months, government data showed on Wednesday, in a tentative sign that overseas demand is starting to recover, which could raise hopes that exports could offset a slump in consumer spending.
- Amazon.com will set up shop in China's Shanghai free trade zone, the company said on Wednesday, aiming to take advantage of less stringent trade regulations to sell a wider range of products in the country.
- South Korea’s boom in exports to China appears to be finally fizzling out. In an unusually candid trade report early this month, the trade ministry said it was “concerned” about a sustained fall in exports to China, Seoul’s biggest trade partner. Shipments shrank 7% in July from a year earlier, the third-straight monthly drop that began with a steep 9.4% slide in May.
- With Prime Minister Narendra Modi’s new government promising to ramp up economic growth, an economist based in the United States has emerged as the most likely candidate to serve as its chief economic adviser.
- The 21-member Asia Pacific Economic Cooperation (APEC) forum confirmed that work is moving forward on the implementation of its landmark agreement to boost trade in over 50 environmental goods categories.
Government Announcements/Press Releases
- In the notification, Malaysia indicated as follows: “Any interested party shall identify themselves within 15 days from the date of publication of the notice in the Government Gazette of Malaysia. Any importer requesting for a questionnaire shall do so within 15 days from the date of publication of the notice in the Government Gazette of Malaysia. […]"
- In the context of Russian restrictions on imports of EU agricultural products and following on from last week’s Management Committee meeting discussion of the market situation, the European Commission is moving as from today to introduce support measures for certain perishable fruits & vegetables.
- The Commission has today repealed the measures adopted against the Faroe Islands in August 2013 following their unsustainable fishery on Atlanto-Scandian herring. The measures imposed at the time will now be lifted as of 20th August 2014.
- The first estimate for the euro area (EA18) trade in goods balance with the rest of the world in June 2014 gave a €16.8 billion surplus, compared with +€15.7 bn in June 2013. The May 2014 balance was +€15.4 bn, compared with +€14.6 bn in May 2013. In June 2014 compared with May 2014, seasonally adjusted exports fell by 0.5% while imports rose by 0.5%.
- In June 2014 compared with May 2014, seasonally adjusted production in the construction sector fell by 0.7% in the euro area (EA18) and by 0.3% in the EU28, according to first estimates from Eurostat, the statistical office of the European Union. In May 2014, production in construction fell by 1.4% in both zones.
- The Honourable Christian Paradis, Minister of International Development and La Francophonie, underlined the importance of minority communities in the implementation of the Economic Strategy for La Francophonie. In an address made to the Acadian community and international representatives gathered in Edmundston today, he recognized the constructive role of the Congrès mondial acadien (CMA) as part of the Economic Summit in building a strong economy in La Francophonie.
- A new strategy to improve customs risk management, together with a detailed action plan, was adopted by the Commission today. Robust customs risk management is essential to protect the safety and security of the EU and its citizens, the interests of legitimate traders and EU financial interests, while at the same time enabling the smooth flow of trade. As the volume of trade grows and the international supply chain becomes ever more complex and fast-moving, the framework for customs risk management needs to be adapted and developed accordingly. The new strategy seeks to ensure that customs is more coherent, efficient and cost effective in identifying and supervising supply chain risks, in a way that reflects today's realities. The action plan sets out specific measures to achieve this, together with the actors responsible and clear deadlines for doing so.
- The Honourable Ed Fast, Minister of International Trade, today met with business and municipal leaders to announce federal government support for Prince Edward Island and to highlight the many benefits the Canada-EU Free Trade Agreement and the Canada-Korea Free Trade Agreement will bring to businesses and workers in the province.
- The Honourable Christian Paradis, Minister of International Development and La Francophonie, concluded a productive two-day visit to the 5th Congrès mondial acadien (CMA). The event, held for the first time in two Canadian provinces (New Brunswick and Quebec) and one American state (Maine), brings together Acadians and their friends from around the world to celebrate their culture and heritage as well as strengthen and develop economic ties among various partners.
- Today’s Expert Group meeting provided the Commission and Member State experts with a further chance to discuss elements relating to the impact on EU markets of the Russian import restrictions announced two weeks ago.
- EU Trade Commissioner, Karel De Gucht, today welcomed a ruling by an independent panel at the World Trade Organisation (WTO) that certain conditions which Argentina introduced for firms wishing to import goods into the country break WTO law. Commenting on the ruling, Commissioner De Gucht said: ‘I've made standing up to protectionism one of the hallmarks of my term as EU Trade Commissioner. This case sends an important signal that protectionism is not acceptable. I call on Argentina to move quickly to comply with the ruling of the WTO panel and remove these illegal measures, and open the way for EU goods to compete fairly on the Argentinian market.’
- The European Commission has proposed to provide Belgium with €570,945 from the European Globalisation Adjustment Fund (EGF) to help 479 workers made redundant by Ford in Genk (Belgium) and its suppliers to find new jobs. The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.
- China filed, on 22 August, a notice of appeal on the dispute DS437 on countervailing duty measures on certain products from China.
- Panel reports were issued on 22 August in the dispute involving Argentina, European Union, United States and Japan over Argentina’s import measures (DS438, DS444, DS445).
Commentary
- What will happen to our Gorgonzola cheese? Or is it Gorgonzola “type” cheese? With the leak of the massive Canada EU Comprehensive Economic and Trade Agreement (CETA) text last week, the inevitable questions that are being raised are “what impact will it have on me.” In the case of CETA, it can mean cheese confusion.
- The maritime trade winds that have helped chart Canada’s economic course for decades are shifting dramatically. As Canada’s Port Authorities gather in Belledune, N.B. – one of the National Port System’s key Atlantic gateways – it’s clear that the shipping world is going through a remarkable transformation and that Canada has a unique opportunity to advance its global leadership into the top ten nations when it comes to supply chain efficiency.
- On Canada Day, 2013, Prime Minister Stephen Harper described this country as a “land of hope in a sea of uncertainty.” Indeed, there is much in the world that prompts deep concern: a sluggish jobless recovery following the fiscal crisis that paralyzed many Western economies; the Arab Spring and unpredictable risks posed by Islamic extremists; the spectacular rise of China economically and potentially politically as well; new instabilities on the borders of Europe as Vladimir Putin’s “New Russia” flexes its military muscles and challenges the territorial status quo; the spectre of a nuclear Iran even as arms-control talks continue; the unravelling of Afghanistan and Iraq after huge military engagements in each; and the daunting challenge of attacks on liberty from cyberspace. America’s capacity and inclination for global leadership are waning. Sharp political divides on the home-front undermine consensus on domestic and foreign policy. U.S. military prowess remains in a class of its own, but 21st-century security threats, whether from terrorists on the ground or from cyberspace, cannot be stopped by massive military assaults.
- India versus the World Trade Organization: It ain’t over yet. A senior official at the Indian commerce ministry said this week that the government’s position on a global trade pact hasn’t changed since the country thwarted an attempt to ratify the deal last month. Speaking to reporters at a briefing in New Delhi, the official said India still won’t sign off on the WTO agreement until the country receives “greater certainty” that WTO rules will be changed to give governments like India’s more freedom to stockpile food and subsidize farmers.
- As the premiers prepare for their annual meeting next week, they find themselves in an unusual position. Normally these affairs involve the premiers issuing a long list of demands that Ottawa do this and pay for that, almost always in areas that are properly provincial. (See: cooperative federalism.) This time, the federal industry minister, James Moore, has provided the premiers with a demand of his own — namely, that the provinces get serious, 147 years after Confederation, about removing the barriers to trade between them.
- The last few days have brought a couple of "official corrections", to coin news agency jargon, about the tin market. The first came from the Indonesian trade ministry, which revised down its estimate of tin exports in June to 7,016 tonnes from 12,377 tonnes. A ministry official said there had been a miscalculation.