International Trade News from Across the World

Reuters

• Comment: "The latest rhetorical salvoes underlined how long-running friction caused by the yuan's de facto dollar peg could come to a head next month when President Barack Obama's administration decides whether to brand China as a "currency manipulator."

Sen. Schumer says plans China currency bill

Reuters

• Comment: "Senator Charles Schumer said on Friday he plans to move forward soon on legislation aimed at stopping China from "manipulating" its currency."

Don't politicise yuan, China central bank tells Obama

Reuters India

• Comment: "We always refuse to politicise the yuan exchange rate issue, and we never think that one country should ask another country for help in solving its own problems," he said.Obama's rare comment about the currency comes as his administration mulls whether to use the "currency manipulator" label in a semi-annual Treasury Department report due on April 15, which could set in train punitive actions against China."

Obama presses China on currency in trade speech

Reuters

• Comment: "As I've said before, China moving to a more market-oriented exchange rate would make an essential contribution to that global rebalancing effort," Obama said in the text of a speech."We all need to rebalance. Countries with external deficits need to save and export more. Countries with external surpluses need to boost consumption and domestic demand," he said."

Obama launches export-doubling strategy

Yahoo! Canada

• Comment: "The leader signed an executive order to "marshal the full resources of the United States government behind American businesses that sell their goods and services abroad" under his National Export Initiative.It is the first time the United States is launching a single, comprehensive strategy to promote American exports, Obama said, adding that he would put his credibility on the line for the strategy to succeed."

Obama Outlines Drive To Raise U.S. Exports

New York Times

• Comment: "In his remarks, Mr. Obama singled out those policies, saying “China moving to a more market-oriented exchange rate will make an essential contribution to that global rebalancing effort.” But few expect to see major shifts in Chinese monetary policy anytime soon, making it hard for American companies to tap into the explosive growth of emerging Asian economies.There is also the threat of protectionism. Ralph C. Bryant, senior fellow at the Brookings Institution, said efforts to stimulate exports could prompt other countries to take similarly ambitious actions.“There’s no way that all countries can increase exports at the same time,” Mr. Bryant said. “If we do it and everyone else does it, it will be less successful and raise the possibility of friction.”

China's bubble trouble

Oregonian

• Comment: "China's dependence on export-led growth ... is unsustainable over time," argues Robert Zoellick, president of the World Bank, in a forthcoming article in the journal The International Economy. He cites a recent IMF analysis saying that for China to maintain its trend of 8 percent growth annually with the current pattern of trade, it would have to double its share of world exports by 2020. That isn't going to happen. So the question isn't whether the Chinese economy will change, but how. The optimistic view is that Chinese leaders will slow their investment and credit boom, and at the same time make a transition to a consumer-led economy that doesn't depend so much on exports. "

January US trade deficit shrinks to $37.3B as imports fall more than exports

News 1130

• Comment: "If the trade deficit held at January's level for an entire year, it would give the country an imbalance of $447.5 billion in 2010, up from a 2009 deficit of $378.6 billion, which had been the smallest trade gap in eight years. That improvement reflected a drop in global oil prices and a deep recession, which cut into demand for imported goods. Economists believe the 2010 deficit will rise as a rebounding U.S. economy purchases more imports. However, the hope is that the U.S. recovery will be supported by strength in export sales as American manufacturers benefit from economic rebounds in other nations and a weaker dollar, which makes U.S. goods cheaper in foreign markets."

Currencies: Yen gains vs. euro and dollar after China data

MarketWatch

• Comment: "the Commerce Department said the U.S. trade deficit shrank a seasonally adjusted 6.6% in January, narrowing to $37.29 billion from $39.90 billion in December. Analysts had anticipated a slight increase"

Senate passes $140 billion extension of jobless benefits

The Hill

• Comment: "Most of the cost in the bill approved by the Senate goes toward prolonging increased levels of federal unemployment aid and COBRA healthcare benefits for the jobless through the end of December. The cost of those extensions is about $80 billion.The bill also extends the current rate of Medicare payments to doctors, who are scheduled to see a 21 percent rate cut, and extends several tax breaks, including ones for homeowners who don’t itemize deductions, for states with sales taxes but no income tax and for companies’ research-and-development costs."

U.S. Nears a Crossroads on Trade

New York Times

• Comment: "The nominations of Michael Punke as ambassador to the W.T.O. and Islam A. Siddiqui as chief agricultural negotiator have stalled in the Senate. More significant, lawmakers in both parties say they believe that large emerging economies like Brazil, China and India need to give ground on opening their markets before the United States can agree to more liberalization."

Is there a WTO case against Chinese Internet censorship?

KPNews.com

• Comment: "The First Amendment Coalition, a U.S. group that campaigns against censorship, and the European Centre for International Political Economy (ECIPE) in Brussels have presented arguments that Internet censorship by China could violate WTO commitments. The potential basis for a WTO complaint could be that Chinese Internet censorship discriminates against foreign companies, blocks the legitimate flow of goods and services, lacks transparency and does not offer an acceptable channel to appeal. These policies violate the General Agreement on Tariffs and Trade, rules about trade in services, and specific rules China agreed to when it joined the WTO in late 2001, the critics argue."

WTO chief holds talks with US officials, lawmakers

Breitbart.com

• Comment: "Lamy had said last month that he was against inviting ministers to a planned stock-taking meeting in Geneva in March, saying it was "too early" and would be "best undertaken by senior officials at this stage."Kirk, the US trade representative, said on Tuesday that Washington was working to achieve "a balanced and ambitious conclusion to the Doha Round that promotes meaningful market access for all nations and enhances economic development among the world?s poorest nations."

WTO chief holds talks with US officials, lawmakers (AFP)

Yahoo! News

• Comment: "the long-running talks should continue in a bid to seek a breakthrough, Sander Levin, the Democratic chairman of the powerful House of Representatives Ways and Means Committee, told AFP after talks between lawmakers and Lamy. "I think it's important to get moving, acknowledging that the present framework is not satisfactory, and that's true of the House and the Senate, and the public and private sectors. There is no basic division," Levin said."

Brazil slaps punitive tariff on U.S. goods in subsidies row

UPI

• Comment: "The Obama administration is seeking to defuse a crisis in trade ties with Brazil after the Latin American country unveiled a widely anticipated retaliatory tariff against a wide range of U.S. imports, including intellectual property. The Brazil action was feared for long but didn't get the priority attention it deserved in Washington, analysts said. U.S. officials now must scramble to forestall Brazilian action before April, likely to affect U.S. exports across a wide spectrum."

Dairies Sour on Trade Talks

Wall Street Journal

Dairies Sour on Trade Talks

Wall Street Journal

Brazil urges US to respect WTO cotton ruling

ONE News

• Comment: "US Trade Representative Ron Kirk said on Tuesday that the United States still hoped to strike a deal with Brazil to avoid the sanctions. If it can't, it will have to try to persuade Congress to change the US cotton programme to satisfy Brazil's concerns, he said.Brazil has indicated it could accept a US proposal with a pledge to send a reform bill to Congress if Brazil were compensated for damages until the bill's approval. Some Brazilian business leaders have proposed compensation through U.S. investments into cotton research, as well as more US imports of Brazilian beef, orange juice and ethanol."

Unlocking the Jobs Dilemma

Seeking Alpha

• Comment: "In reality, employment's future is being decided in the credit markets. Here, the Fed's zero interest rate policy is redirecting investment capital towards government. When banks can borrow from the Fed at zero percent and buy long-dated U.S. Treasuries yielding 3 to 4 percent, there is little incentive to take the risks inherent in business lending. Business credit is, therefore, tighter than even a severe recession would ordinarily dictate. This lack of credit is starving the private sectors' ability to create jobs."

Did protectionism force EADS to scrap a $35 billion bid to supply the American air force?

The Economist

• Comment: "The repercussions of this affair are likely to poison European-American trade relations and expose the administration to accusations of corporate welfare for America’s aerospace national champion. EADS was prepared to invest in an American factory to build the tankers and saw the contract as a foothold in the biggest defence market. The importance of the tanker deal and the A400M was that together they would help make EADS a more balanced aerospace company, less reliant on the performance of its Airbus subsidiary in the very cyclical civil aviation market"

Obama criticized for Mexico, Brazil sanctions

Reuters

• Comment: "For the sake of American workers and farmers, we can't allow a pattern to emerge in which Washington's inaction on trade puts jobs at risk," Murphy said."

Don't have yuan for the road

CHINAdaily

• Comment: "though many Americans believe their economy, particularly US manufacturers, would benefit if the yuan is revaluated against the dollar, the gains from such an adjustment would be enjoyed mainly by non-US economies. This is because China imports very few products that US manufacturers make. A stronger yuan would only force American consumers to pay more for Chinese imports or buy them from China's competitors such as Vietnam."

Governor Rendell: High-tech Manufacturer Moving to PA, Creating 53 Jobs

Forbes.com

• Comment: "Voltaix LLC is moving its specialty gas and chemical production operations to Upper Mt. Bethel Township, and will construct a production plant, warehouse and an office building at the Portland Industrial Park as part of a $22 million project."

Deal in WTO Doha round doubtful this year: Kirk

Reuters via Yahoo!

• Comment: "Last year leaders of the Group of 20 rich and emerging countries set a goal of finishing the Doha round in 2010.Asked if he thought that target was still achievable, Kirk said: "Well, considering that we have tried and failed three successive years, if past is prologue I don't know if I would put too much stock in it."He added the outlook could change if "advanced developing economies such as Brazil, China, India and South Africa come to the table" with better offers.The Doha round was launched in the capital city of Qatar in late 2001 with the goal of helping countries prosper through trade. However, negotiators have missed every deadline set by themselves or political leaders for finishing the round."

Lawmakers Look to Trade for Boost to Haiti's Recovery (CQPolitics.com)

Yahoo! News

• Comment: "In testimony to the committee, Edward Gresser, director of the project on trade and global markets at the Democratic Leadership Council, noted that the existing Haiti trade preference program helped boost imports into the United States from Haiti to more than $500 million in 2009 and that tariff benefits and assistance to repair Haiti's badly damaged ports will be key to its recovery. "This industry appears to remain viable, and can be a driver of Haiti's recovery, as the garment factories, most new and often built to international standards, seem to have survived relatively well," Gresser said in his testimony."

China Embraces U.S. Treasuries, Wary About Buying More Gold

Moneynews

• Comment: "The U.S. Treasury market is the world's largest government bond market. Our foreign exchange reserves are huge, so you can imagine that the U.S. Treasury market is an important one to us," Yi Gang, head of the State Administration of Foreign Exchange (SAFE), told a news conference.The exact composition of China's reserves, the world's largest, is a state secret and the subject of intense scrutiny by global investors aware that, with such large sums at stake, even marginal portfolio shifts have the potential to move markets."

Rep. Levin known as trade critic, but his record on the issue is more complicated

The Hill

• Comment: "Levin (D-Mich.), who was named interim chairman of the Ways and Means Committee after Rep. Charlie Rangel (D-N.Y.) stepped down under an ethics investigation, has been a leader in the Democratic Caucus on trade for years.He’s expressed skepticism of pending agreements with Colombia, Panama and South Korea that were negotiated by the Bush administration, leading some to think those deals are unlikely to be dislodged. But in 2000, Levin voted for granting China more favorable trade terms, which ushered that country into the global trading system and the World Trade Organization."

Brazil Threatens Retaliation in Dispute on Cotton Subsidies

New York Times

• Comment: "The Brazilian government published on Monday a list of American goods subject to import tariffs that will go into effect in 30 days, unless the governments can reach an accord by then.The World Trade Organization gave Brazil the go-ahead last year to impose sanctions on American imports after the body ruled that Washington spent too much subsidizing cotton farmers and on an export credit guarantee program."

China Promises to End Currency Manipulation: Murphy Asks When?

Congressman Tim Murphy

• Comment: “Despite promises to end undervaluing its currency, China has yet to take any action,” said Congressman Tim Murphy. “As China continues its unfair policies, American workers suffer. There are 15 million unemployed Americans, with tens of thousands workers losing their jobs every month. We can no longer hold out for more empty promises from China as its government continues to manipulate the market and creates and unfair trade advantage over American manufacturers."

"Buy American" Proposal Puts a Texas Windfarm in Jeopardy

Reuters

• Comment: "Speculation has been swirling for a few months now that legislation would be passed putting the kibosh on the big 600MW Texas wind farm being developed by Shenyang Group (which A-Power has majority ownership of) and a few US based companies such as US Renewable Energy and Cielo Wind."

When economy turns, some jobs won't return

Charleston Post and Courier

China faces new pressure to let currency rise, gives signs it may allow yuan appreciation

Stockhouse Canada

• Comment: "Even if China starts to appreciate, the possibility is it will be very slow and gradual, without an immediate impact on trade," said Nicholas Consonery, an analyst in Washington for Eurasia Group, a consulting firm.On Friday, Premier Wen Jiabao said in a speech to China's legislature that the yuan will be kept "basically stable" at an "appropriate and balanced" level this year, though he gave no explanation of what that would mean."

Jobs outlook may be too optimistic: SF Fed study

Washington Post

• Comment: "Companies' ability to keep output steady, even as they slashed jobs, meant the unemployment rate rose twice as fast as predicted by the historical relationship between gross domestic product and unemployment, known as Okun's law, the economists found. U.S. joblessness touched a high of 10.1 percent last year."Most forecasters assume that the economy will return to its historical path this year, following Okun's two-to-one ratio of changes in GDP and changes in unemployment," Daly and Hobijn wrote in the San Francisco Fed's latest Economic Letter. "Under this scenario, unemployment would begin to edge down this year as the economy recovers and gains momentum."

For Auto Towns, Emissary Is Ambassador of Hope

New York Times

• Comment: "In the weeks between Barack Obama’s election and his inauguration, General Motors closed the last big factory in Moraine, a four-million-square-foot plant that churned out S.U.V.’s. The 4,200 men and women who had worked there before the recession — representing nearly 2 percent of the work force in Moraine and the surrounding communities — lost their jobs and their wages, which were north of $20 an hour.The president never sought to reopen the factory, even after the federal government became controlling shareholder in G.M. during the auto bailout. What he has done instead is try to ease some of the pain by sending an ambassador as a salve for the community’s wounds."

China’s Bank Chief Says Currency Is Unlikely to Rise

New York Times

• Comment: "He called China’s practice of pegging the renminbi to the dollar a “special foreign exchange mechanism” made to respond to the world financial crisis. Such mechanisms will be abandoned “sooner or later,” he said, but “we must be very cautious and discreet in choosing the timing.”China had allowed its currency to slowly appreciate against the dollar until late 2008, when world economies sagged under the weight of the United States banking and securities collapse. Most economists say the Beijing government acted to maintain the price advantage of Chinese manufactured goods, a linchpin of the Chinese economy, at a time when exports were drying up."

Trading Away Productivity

New York Times

• Comment: "FOR a quarter-century, American economic policy has assumed that the keys to durable national prosperity are deregulation, free trade and a swift transition to a post-industrial, services-dominated future. Such policies, advocates say, drive innovation, which leads to enormous labor productivity and wage gains — more than enough, supposedly, to make up for the labor disruptions that accompany free trade and de-industrialization."

Exports, Not Consumers, Propel U.S. Recovery

BusinessWeek

• Comment: "Caterpillar, the world’s largest maker of bulldozers and excavators, said Feb. 23 that its dealers reported a 1 percent increase in Asia/Pacific machinery sales for the three months through January from the year-earlier period. The increase is the first since November 2008 and compares with a 40 percent drop in North America, according to data from the Peoria, Illinois, company. The strength in manufacturing is leading to some hiring. Factory payrolls increased 1,000 last month after rising 20,000 in January, according to the Labor Department. Employers added workers for a second straight month, the first back-to-back gain since 2006."

FM rejects accusations of China's

People's Daily Online

• Comment: "We hope the world will appreciate China's uniqueness and real national circumstances and abandon their colored spectacles, or stereotyped perceptions about China, particularly the psychological bias against China," Yang said at a press conference on the sidelines of the annual session of the country's top legislature"

China unlikely to let yuan rise soon

Economictimes

• Comment: "At a Saturday news conference, the central bank head, Zhou Xiaochuan, said China should be “very cautious” about revaluing its currency, also known as the yuan, as long as major economies remained mired in slow growth. He called China’s practice of pegging the renminbi to the dollar a “special foreign exchange mechanism” made to respond to the world financial crisis. Such mechanisms will be abandoned “sooner or later,” he said, but “we must be very cautious and discreet in choosing the timing.”

China Signals Defiance on U.S. Relations

Wall Street Journal

• Comment: "China gave little hope that it would accommodate Washington on Iran and other thorny foreign-policy issues, despite the first real sign of flexibility in years over its exchange rate, which has been a growing source of friction with the U.S."

China's influence creeps into Arizona solar

Philadelphia Business Journal

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