Dear International Trade and Investment Committee Members,
Here are the international trade and investment articles and publications of interest for the week of January 20 to January 26. This week’s edition has been curated by Daniel Hohnstein. Daniel is an associate at Borden Ladner Gervais LLP in Ottawa.
Top News
- The world's biggest trading powers pledged on Friday to work toward a global agreement on free trade in environmental goods, but they gave no timeline for talks intended to support the fight against climate change.
- The world's biggest trading powers including Canada committed on Friday to achieving global free trade in environmental goods, everything from solar panels to wind turbines and water recycling technology.
- Trade ministers from many of the world's biggest economies pledged to broaden a deal to boost global trade Saturday, with the U.S. saying nothing is off-limits for discussion.
- The United States has followed through on promised sanctions relief for Iran covering oil exports, trade in precious metals and automotive services as part of a nuclear agreement that began taking effect on Monday, U.S. officials said.
- The Obama administration intensified efforts on Thursday to counter what officials called a misimpression that the six-month nuclear agreement with Iran had opened the door to new economic opportunities with the country, emphasizing that nearly all sanctions remained in force and warning businesses not to engage in any deals still pending after the accord’s July 20 expiration.
- China, the world's top buyer of raw cotton and soy, will this year scrap its controversial scheme to stockpile the commodities and will trial direct subsidies for farmers instead, the government said in a policy document.
- China appears to be moving away from its practice of building cotton stocks, in a move that analysts say marks a dramatic shift in policy. Two other major players in the global cotton market - the US and Brazil - are also engaged in a separate tussle on the subject, as the process to pass a new Farm Bill continues to drag on in Washington.
- Canadian Prime Minister Stephen Harper announced his country will begin talks with Israel to expand the free trade agreement between the two countries.
- Canada and South Korea are having "tremendous discussions" toward a free-trade agreement, said Canadian Agriculture Minister Gerry Ritz, a deal that could increase trade in meat and autos.
- Talks on a 12-nation Pacific trade pact may be hard to finalize this year after a deadline for completion was missed last month, a Malaysian minister said.
- The annual World Economic Forum in the Swiss ski resort of Davos kicked off on Tuesday, bringing together over 2500 business leaders and policymakers amid reports of a tentative global economic recovery. Coming fast on the heels of last month’s WTO ministerial conference in Bali, Indonesia, the meet is also expected to give early signs of what a “post-Bali” agenda might look like, and could include the announcement of a plurilateral initiative to lower barriers to trade in green goods.
- Pepsico, Nestle and Cisco on Friday announced major investments that together totaled more than $7 billion in Mexico, where the government has pushed through a series of economic reforms that aim to boost foreign investment and growth.
- Twenty-six participants from developing and least-developed member and observer governments are attending the two-month Advanced Trade Policy Course from 20 January to 13 March 2014 at the WTO headquarters in Geneva. The course was opened by the patron, US Ambassador Michael Punke, and Bridget Chilala, Director of the Institute for Training and Technical Cooperation.
- U.S. trade officials on Thursday opened investigations into imports of certain solar power products from China and Taiwan, a move that could have a major impact on the nation's fast-growing solar market.
- China's commerce ministry called on the United States on Sunday to stop anti-dumping investigations into imports of solar power products from China, expressing "serious concern" and vowing to defend its producers.
Other News of Note
- Ottawa has filed its appeal of a World Trade Organization ruling that says aspects of Europe's ban on importing seal products undermine fair trade but can be justified on "public moral concerns" for animal welfare.
- The Faroe Islands has moved forward with its first-ever WTO dispute, requesting on Wednesday that a panel be established to hear its complaint against the EU over restrictions imposed on the archipelago’s fishing fleets. While the EU rejected the Faroese request at Wednesday’s meeting of the WTO’s Dispute Settlement Body, Tórshavn has the option of filing it again, which would prompt the automatic establishment of a panel.
- A compliance panel is set to review whether Washington’s efforts to revise its “dolphin-safe” tuna labelling scheme have been enough to bring it in line with WTO rules, following an adverse ruling by the global trade arbiter’s highest court in 2012. The decision marks the latest development in the US’ long-standing row with Mexico over the policy.
- At the request of the parties in the dispute US - COOL (Article 21.5), the Panel has agreed to start its meeting with the parties at 10:00 am on Tuesday, 18 February 2014 with a session open to public viewing at the WTO Headquarters in Geneva. It will continue on Wednesday, 19 February 2014.
- In a surprise announcement on Tuesday, the European Commission confirmed that it has put the investment component of its trade negotiations with the US temporarily on hold. Brussels will use that time to allow the European people to provide their input on the subject, in light of the “unprecedented public interest” in the talks.
- Copper fell to its lowest in a month on Friday and struck its biggest weekly fall since mid-November as slowing growth in China's factories fuelled worries about demand in the world's top metals consumer.
- Chinese wheat importers are seeking cargoes for April shipment, trade sources said, as the world's top consumer aims to take advantage of global prices trading around three-and-half-year lows.
- Singapore's factories may be in for a rougher ride this year if manufacturers ramped up output in anticipation of a pick-up in global demand, and caused stocks to swell.
- India and Japan have signed agreements on cooperation in areas including energy and telecommunications during the visit by Prime Minister Shinzo Abe to New Delhi, the countries said over the weekend.
- Russia plans to support its struggling auto industry with subsidies of up to 271 billion roubles ($8 billion) in the three years to 2016, the government said.
- European banks have a combined capital shortfall of about 84 billion euros ($115 billion), German weekly WirtschaftsWoche reported, citing a new study by the Organisation for Economic Cooperation and Development (OECD).
- A full-scale flight from emerging markets accelerated on Friday, as investors sold shares in major markets and bought safe-haven assets such as U.S. Treasuries, the yen and gold.
- Dalian Wanda, the property developer headed by China's richest man, plans to invest up to 3 billion pounds ($5 billion) in regeneration projects in Britain, Britain's prime minister said on Friday.
- European aerospace group Airbus (AIR.PA), one of Britain's largest employers, has voiced concerns over the possibility of the country leaving the European Union (EU), saying the benefits of an alternative economic model needed to be proven.
- There is as high as a one-in-five chance that prices could start to fall in the euro zone, the International Monetary Fund's chief economist said on Tuesday.
- "Our model gives a 10 to 20 percent probability to inflation turning negative (in the euro zone)," Olivier Blanchard told reporters on a conference call, adding that the IMF still sees positive price growth in its baseline forecasts.
- The European Union's top court has dismissed Britain's challenge to a law on banning the short-selling of shares in market emergencies, dealing a blow to UK attempts to limit the influence of EU rules on the City of London.
Government Announcements/Press Releases
- The Honourable Ed Fast, Minister of International Trade, today highlighted some of the findings from Canada’s State of Trade: Trade and Investment Update 2013 that show how Canada has led the way among G-7 countries despite ongoing challenges within the wider global economy.
- “Trade and investment are the key pillars to opening new markets for our exporters, which in turn offers exciting opportunities for our world-class businesses and their employees,” said Minister Fast. “That’s why our government is focused on an ambitious pro-trade plan that aims to ensure that Canadians and their families continue to prosper from international trade and investment.”
- The Honourable Ed Fast, Minister of International Trade, today highlighted some of the findings from Canada’s State of Trade: Trade and Investment Update 2013, a publication of Foreign Affairs, Trade and Development Canada.
- “Our government’s top priority is the economy and creating jobs and opportunities for hard-working Canadians and their families,” said Minister Fast. “We know that trade and investment are the twin engines of growth for both the Canadian and global economies. Our leadership role on the world stage for free and open trade is backed by an economic and trade performance that shows that Canada truly is a global champion of trade.”
- The Honourable Ed Fast, Minister of International Trade, today announced that Canada will join 13 World Trade Organization members, including China, the European Union, Japan and the United States, in negotiations toward a new WTO plurilateral agreement on environmental goods. Minister Fast is in Davos to lay the groundwork for these negotiations.
- The Honourable Ed Fast, Minister of International Trade, today highlighted some of the findings from Canada’s State of Trade: Trade and Investment Update 2013, a publication of Foreign Affairs, Trade and Development Canada.
- “Increasing our exports and attracting investment grows our economy, creating more jobs and opportunities for hard-working Canadians in every region of our country,” said Minister Fast. “That’s why our government continues to focus on the economy and pursue the most ambitious pro-trade plan to open markets our country has ever seen.”
- The Honourable Ed Fast, Minister of International Trade, today highlighted some of the findings from Canada’s State of Trade: Trade and Investment Update 2013, a publication of Foreign Affairs, Trade and Development Canada.
- “Our government is focused on the real priorities of Canadians: creating new jobs and new opportunities,” said Minister Fast. “We know that free trade is the engine of our economy. That’s why we continue to open new markets for Canadian exporters and strengthen our existing relationships, such as those with our key NAFTA partners.”
- The Honourable Ed Fast, Minister of International Trade, and Foreign Affairs Minister John Baird today wrapped up meetings at the annual World Economic Forum (WEF), held from January 22 to 25 in Davos, Switzerland. Minister Fast also attended the WTO Informal Ministerial Gathering on the margins of the WEF.
- Canada and Norway today launched an appeal against the WTO panel report on the EU’s ban on importation and marketing of seals products. The WTO panel had previously rejected Canada’s and Norway’s claims against the ban.
- In the margins of the World Economic Forum in Davos the EU, together with 13 other WTO members, today pledged to launch negotiations in the WTO on liberalising trade in so-called ’green goods’. The initiative builds on the ground-breaking success of the 9th WTO Ministerial in Bali last month.
- EU Trade Commissioner Karel De Gucht today announced his decision to consult the public on the investment provisions of a future EU-US trade deal, known as the Transatlantic Trade and Investment Partnership (TTIP). The decision follows unprecedented public interest in the talks. It also reflects the Commissioner’s determination to secure the right balance between protecting European investment interests and upholding governments’ right to regulate in the public interest. In early March, he will publish a proposed EU text for the investment part of the talks which will include sections on investment protection and on investor-to-state dispute settlement, or ISDS. This draft text will be accompanied by clear explanations for the non-expert. People across the EU will then have three months to comment.
- The first round of negotiations for an EU-China investment agreement will take place in Beijing on 21-23 January 2014. A comprehensive EU-China investment agreement will benefit both the EU and China by ensuring that markets are open to investment in both directions. It will also provide a simpler, secure and predictable legal framework to investors in the long term. The EU sees an investment agreement with China as an important element in closer trade and investment ties between our economies. One of the EU’s priorities in the negotiations will be to remove barriers to EU investors on the Chinese market.
Commentary
- China's decision to end stockpiling of cotton may not be as bearish for prices of the fibre as the market fears.
- Much will depend on how the Chinese switch from buying cotton from domestic farmers at elevated prices to paying them subsidies related to international prices.
- When President Hassan Rouhani of Iran commandeered the spotlight this week in Davos, Switzerland, with a message of peaceful intentions and a desire for dialogue, it was an eerie echo of 10 years ago, when Iran’s last would-be change agent, Mohammad Khatami, delivered the very same message at the World Economic Forum.
- The ascent of developing countries over the last decade has been fueled by two global trends: the steady rise of China and the willingness of the Federal Reserve to stimulate the economy.
- Now, with both trends starting to retreat, investors have been heading for the exits in markets as far removed as Buenos Aires, Istanbul and Beijing, with effects spilling over into the rest of the world.
- According to the late Roberto Goizueta, a former boss of The Coca-Cola Company, April 15th 1981 was “one of the most important days…in the history of the world.” That date marked the opening of the first Coke bottling plant to be built in China since the Communist revolution.
- A mysterious new technology emerges, seemingly out of nowhere, but actually the result of two decades of intense research and development by nearly anonymous researchers.