UK, Oman Agree to Strengthen Economic Ties, Boost Investment

Britain and Oman have agreed to work more closely together to strengthen economic ties and increase high-value investment in areas such as clean energy and technology, following a meeting between the leaders of both countries last month.

 

 

UK companies have a long history of investment in Oman and they accounted for nearly 50% of the foreign investment in the country in recent years, Britain said, citing data from the Omani National Centre for Statistic and Information.

 

The two countries said a Sovereign Investment Partnership, signed in London on Tuesday by UK Minister for Investment Gerry Grimstone and President of the Oman Investment Authority Abdulsalam Al Murshidi, would drive strategic joint investment.

 

Britain has close strategic and military ties with countries in the Gulf and it is targeting trade deals in the region following Brexit.

 

It took a first step last year towards trade negotiations with the Gulf Cooperation Council, which comprises Oman, Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Bahrain.

 

 

Source: U.S.News

Mexico asks USMCA dispute resolution panel on auto content

The Mexican government on Thursday requested a dispute resolution panel under the U.S.-Mexico-Canada free trade agreement because it claims the United States is improperly interpreting stricter regional content rules under the pact.

 

The agreement, known as the USMCA, raised required regional content to 75% of a vehicle’s value or components. Under the old NAFTA agreement, that threshold was 62.5%.

 

But Mexico’s Economy Department said Thursday that U.S. officials were taking an unduly strict approach by not allowing “various methodologies” to calculate content, something Mexico claims is contained in the USMCA annex.

 

A number of Asian and European automakers have established plants in Mexico, and sometimes import components from outside North America.

 

In December, Mexico threatened legal action over proposed subsidies of up to $12,500 for purchases of union-made, American-made electric vehicles.

 

Mexico says U.S. President Joe Biden’s Build Back Better Act, currently before the Senate, would discriminate against potential exports of Mexican-built electrical vehicles and favor domestic producers, something it claims is forbidden under the USMCA.

The United States, meanwhile, is concerned Mexico is trying to favor its own state-owned electrical power plants.

 

In November, U.S. ambassador to Mexico Ken Salazar said the United States has “serious concerns” about the Mexican government’s attempts to limit competition in the electrical power sector.

 

Mexican President Andrés Manuel López Obrador proposed constitutional changes earlier this year to restrict the market share of private power generators and favor Mexico’s state-owned utility company.

 

Source; AP News

Canadá y México empatan como socios comerciales de Estados Unidos a noviembre del 2021

Canadá y México empataron como socios comerciales de Estados Unidos de enero a noviembre de 2021, con una participación de 14.5% cada uno de los flujos de comercio de productos (importaciones y exportaciones).

 

Cerca de ellos, en la tercera posición, se ubicó China, con una porción de 14.3% en ese indicador, informó este jueves la Oficina del Censo.

 

Entre los factores que han impactado estos flujos destacan la falta de chips semiconductores que afectaron sobre todo a las exportaciones de México, el alza de los precios de las materias primas (destacadamente en la energía) que beneficiaron más a Canadá, problemas logísticos en puertos de China por la pandemia y la permanencia de la guerra comercial entre China y Estados Unidos.

 

A noviembre de 2021, el comercio de bienes de México y Canadá con su vecino común sumó 604,200 millones de dólares (cada uno), mientras que el de China totalizó 594,500 millones.

 

En particular, las exportaciones canadienses al mercado estadounidense destacaron en noviembre pasado, con un alza de 40.1% interanual, a 33,753 millones de dólares; seguidas por las de México, con un crecimiento de 15.9%, a 34,6222 millones, y las de China con un avance de 7.9%, a 48,385 millones.

 

En tanto que en las exportaciones de Canadá sobresalen petróleo, autos, gas, madera y aluminio, en las de México destacan autos, computadoras, vehículos para el transporte de mercancías, autopartes, monitores y cables, y en las de China resaltan computadoras, teléfonos, prendas de vestir, juguetes, asientos, monitores y manufacturas plásticas.

 

Las importaciones totales de mercancías a Estados Unidos en noviembre fueron por 259,402 millones de dólares, 22% más que un año atrás, y las acumuladas se cifraron en 2 billones 575,024 millones de dólares, con un incremento interanual de 21.4 por ciento.

 

Considerando sólo noviembre de 2021, China se colocó como primer socio comercial de Estados Unidos, con una cuota de mercado de 15.5% (64,500 millones de dólares), superando a Canadá (14.8%) y México (14.1 por ciento).

 

Durante el tercer trimestre de 2021, la economía de Estados Unidos continuó expandiéndose, aunque a un ritmo más lento que durante la primera mitad del año, los mercados laborales continuaron mejorando con fuerza, pero las presiones inflacionarias siguen siendo elevadas.

 

Según la segunda estimación, el PIB real de Estados Unidos creció 2.1% a tasa anual en el tercer trimestre de 2021; la desaceleración se debió en gran parte a las interrupciones del suministro que se han visto exacerbadas por la persistencia de la pandemia.

 

Por otro lado, el aumento a fines del verano en los casos domésticos de la variante Covid-19 de Delta en los Estados Unidos, y la reducción de la ayuda fiscal federal, fueron vientos en contra menos pronunciados para la economía durante el tercer trimestre.

 

En contraste, el cambio en los inventarios privados fue el que más contribuyó al PIB real en el tercer trimestre, agregando 2.1 puntos porcentuales al crecimiento.

 

A noviembre de 2021, las exportaciones de Estados Unidos a Canadá abarcaron 17.6% (280,100 millones de dólares) del total de las ventas externas de mercancías estadounidenses; las correspondientes a México tuvieron una porción de 15.8% (252,700 millones) y las embarcadas a China registraron una cuota de 8.6% (137,700 millones).

Fuente: El Economista

The impact of the Turkish lira crashing and the currency crisis

Turkey’s beleaguered currency has been plunging to all-time lows against the US dollar and the euro in recent months as President Recep Tayyip Erdogan presses ahead with a widely criticised effort to cut interest rates despite surging consumer prices.

 

As a result, families are struggling to buy food and other goods and the Turkish lira has lost around 40 per cent of its value since the start of the year, becoming one of the world’s worst-performing currencies.

 

Here is a closer look at the Turkish currency crisis and its impact on a country with eye-popping inflation.

 

What is going on with the Turkish lira?

 

Turkey’s Central Bank has cut borrowing costs by four percentage points since September, in line with Erdogan’s wishes, even though inflation accelerated to around 20 per cent.

 

Erdogan, who has been in power for some 19 years and has grown increasingly authoritarian, has long argued that high-interest rates cause inflation, contrary to what economists generally say: that increasing rates will drive down prices.

 

The rate cuts have raised concerns over the bank’s independence, while the country’s unconventional monetary policy has spooked foreign investors, who are dumping Turkish assets. And Turkish citizens are rushing to convert their savings to foreign currencies and gold to protect them from soaring inflation.

 

“People bring their savings and always want to buy dollars. When will it end, where will this go? They’re panicking,” said Hulya Orak, a currency exchange office worker. “People are constantly in panic mode and are using money that’s under their mattresses”.

 

As a result, the Turkish lira, which had barely recovered from a currency crisis in 2018, has been weakening to record lows against the dollar and the euro.

 

It crashed to a record low of 13.44 against the American currency on November 23 after Erdogan insisted there would be no turning back from his unconventional policies. On Tuesday, the lira plummeted again to an all-time low of 14 against the dollar after Erdogan reiterated that cuts would continue and amid signs the US Federal Reserve would tighten credit for consumers and businesses as inflation rises.

 

The lira recovered a bit Wednesday after Turkey’s Central Bank announced it was intervening in the foreign exchange market to stem the volatility.

 

How have people been affected?

 

With inflation running at more than 21 per cent, according to government figures released Friday, the prices of basic goods have soared and many people in this country of more than 83 million are struggling to make ends meet. The independent Inflation Research Group, made up of academics and former government officials, puts the inflation rate at a stunning 50 per cent.

 

The devalued lira is driving prices higher, making imports, fuel and everyday goods more expensive in Turkey, which relies on imported raw materials. Meanwhile, rents have skyrocketed and prices for home sales, mostly pegged on the dollar, are increasing.

 

Every morning, long lines form outside kiosks selling bread a lira cheaper than in bakeries and shops.

 

“We are cutting down on everything,” Sinasi Yukselen said as he waited in line. “I used to buy 10 loaves, now I buy five. We’ve given up trying to buy meat”.

 

At a shopping centre selling discounted goods in Ankara, Emine Cengizer said she wanted to buy her teenage daughter a winter coat but left empty-handed.

 

“If I buy the coat, we won’t have anything to eat for the rest of the week,” she said.

 

Selva Demiralp, an economics professor at Istanbul’s Koc University, says she’s concerned about a possible brain drain.

 

“When your salary gap between what you can earn in Turkey versus what you can earn abroad widens so much, it’s just going to be very difficult for us to keep those highly educated white-collar people at home,” she said. “And that’s that’s a major threat for the future of the country”.

 

What is Erdogan’s economic policy?

 

The Turkish president has been pushing for low borrowing costs to stimulate the economy, boost growth and exports, and create jobs. He has vowed to break the cycle of an economy dependent on short-term “hot money” lured by high-interest rates.

 

Economists say raising borrowing costs eases inflation, which has been surging worldwide as the economy recovers from the coronavirus pandemic but is especially acute in Turkey because of the government’s unorthodox policies.

 

A devout Muslim, whose religion regards usury as a sin, Erdogan has described interest rates as “the mother and father of all evil.” He has fired three central bank governors who resisted lowering rates. In a further shake-up, Erdogan on Thursday appointed a new finance minister considered to be supportive of the push for low borrowing rates, leading to a slight decline of the lira.

 

“With the new economic model, we are pushing back the policy of attracting money with high-interest rates. We are supporting production and exports with low interests,” Erdogan said this week.

 

The Turkish leader has blamed the currency crash on foreign forces bent on destroying Turkey’s economy and says his government is waging “an economic war of independence”.

 

Demiralp, the economist, says the government is doing the opposite of what is normally done to tamp down prices.

 

“The central bank claims that by cutting interest rates, they’re going to contain inflationary pressures. The markets are not buying this story,” she said.

 

Turkey is focused on growing the economy rather than controlling inflation, Demiralp said, “but I think even growth is highly questionable at this point because you are going to see more contraction coming as a result of the panic and uncertainty and escalating costs coming from this crisis.”

 

What’s the political impact for Erdogan?

 

His early years in power were marked by a strong economy that helped him win several elections. Recently, soaring consumer prices have hurt his popularity, with opinion polls pointing at unease over his economic policies even among supporters.

 

Last week, police broke up small demonstrations that erupted in Istanbul and several other Turkish cities by groups protesting the high cost of living. Dozens of people were detained.

 

An alliance of opposition parties that have formed a bloc against Erdogan’s ruling party and its allies has been climbing in opinion polls. Members of the opposition coalition are calling for early elections and accusing Erdogan of “treason” for mismanaging the economy.

 

Erdogan has refused to call early elections, insisting voting will take place as scheduled in 2023.

 

He said this week that the government is working on programs that would create 50,000 new jobs and it is expected to raise the minimum wage.

 

“We are preparing to, one by one, take steps to comfort citizens whose purchasing power has fallen,” Erdogan said.

Source: Euronews

Brasil registra superávit comercial récord en 2021

Brasil registró un superávit comercial récord de 61,000 millones de dólares en 2021, mostraron el lunes datos oficiales, y el Ministerio de Economía espera que esa cifra alcance los 79,400 millones de dólares este año debido a una disminución en las importaciones.

 

En el 2021, las exportaciones de una de las economías más grandes de América Latina alcanzaron un récord de 280,400 millones de dólares, principalmente debido a un aumento en los precios en medio de la pandemia de Covid-19, mientras que las importaciones totalizaron 219,400 millones.

 

Hubo un alza de las exportaciones principalmente a Estados Unidos, que crecieron un 44.9 por ciento. Las ventas a China, el mayor socio comercial de Brasil, aumentaron un 28 por ciento.

 

El mayor aumento de las importaciones en 2021 provino de bienes del bloque comercial Mercosur, con un alza del 44.7 por ciento, seguido de Estados Unidos con un 41.3% y China con un 36,7 por ciento.

 

Para 2022, las expectativas del gobierno son un aumento en las exportaciones de 1.4% a 284,300 millones de dólares, mientras que se espera que las importaciones caigan un 6.6% a 204,900 millones, dijo el ministerio. Las previsiones apuntan a un crecimiento más moderado del comercio mundial este año.

 

En diciembre, Brasil tuvo un superávit comercial de 4,000 millones de dólares, con exportaciones por 24,400 millones e importaciones de 20,400 millones de dólares.

 

Fuente: El Econimista

Japan’s Factory Activity Growth Softens in December

Japan’s manufacturing activity grew for an 11th straight month in December, but at a slower pace than in the prior month as output and new order growth softened while cost pressures stayed elevated.

 

Businesses benefited from the weakening impact of the coronavirus pandemic as they shook off some of the drag of the health crisis, though new export sales growth eased amid a rise in COVID-19 cases in South Korea.

 

The final au Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI) in December fell to 54.3 on a seasonally adjusted basis, easing from the previous month’s 54.5.

 

The figure, which compared with a 54.2 flash reading, still pointed to a solid improvement in operating conditions in the manufacturing sector.

 

“Domestic markets were buoyed by a gradual recovery from the COVID-19 pandemic,” said Usamah Bhatti, economist IHS Markit, which compiles the survey.

 

A recovery in parts supplies eased some of the strains in car manufacturing, even as high-tech chips remain in great demand around the world.

 

But foreign orders for Japanese manufactured goods saw their growth rate soften compared to the average for the year as a whole as a sharp rise in coronavirus infections, especially in South Korea, hurt demand, the survey showed.

 

Japan’s economy suffered from the global chip supply shortage in the third quarter of 2021, declining an annualised 3.6% in part due to a blow to output and exports in that quarter from production bottlenecks.

 

 

While output is expected to rebound in the final quarter last year, manufacturers’ average lead times across that period registered their worst quarterly performance since the survey began, Bhatti said.

 

“Though still optimistic, Japanese goods producers were wary of the continued impact of the pandemic and supply chain disruption, which resulted in confidence dipping to the softest since August,” he added.

Source:U.S.News

Las alternativas para el impulso de los socios de menor desarrollo económico en Mercosur

El debate gira en torno a si puede un país miembro del Mercosur firmar si quiere y le conviene, un acuerdo bilateral en el que se comprometa a otorgar preferencias arancelarias a un tercer país que no sea miembro . La respuesta hoy sería no.

 

¿Y lo es sólo como consecuencia de la denominada Decisión 32/00 del Mercosur? La respuesta es también no. ¿Por qué? La simple lectura del texto de la Decisión conduce a tal respuesta. En efecto, su artículo 1° comienza diciendo: “reafirmar el compromiso de los Estados Partes del Mercosur de negociar en forma conjunta acuerdos de naturaleza comercial con terceros países o agrupaciones de países extrazona en los cuales se otorguen preferencias arancelarias”. Se refiere, por ende, a los compromisos asumidos en el pacto fundacional del Mercosur.

 

La explicación de tal respuesta es clara. Surge de lo que establecen los artículos 1° del Tratado de Asunción sobre “el establecimiento de un arancel externo común y la adopción de una política comercial común con relación a terceros Estados o agrupaciones de Estados y la coordinación de posiciones en foros económico-comerciales regionales e internacionales”, y en el artículo 5 c) sobre “un arancel externo común, que incentive la competitividad externa de los Estados Partes”.

 

Las razones

 

Cabe entonces la pregunta sobre porqué se estableció eso en el Tratado de Asunción. ¿Por razones teóricas? Quizás. Pero lo más probable es que fuera porque los países que negociaban el tratado –y en especial los de mayor dimensión económica, Brasil y Argentina- consideraban conveniente asegurarse que ninguno de los futuros socios del Mercosur caería en la tentación de otorgar preferencias arancelarias a “otros países”, o “agrupaciones de países”, que tuvieran por efecto “licuar” las preferencias que eventualmente se otorgaran recíprocamente. De ahí que se reafirmara explícitamente la idea del Mercosur como un espacio arancelario común.

 

Recordemos que al negociarse y firmarse el Tratado de Asunción, se tenían en el horizonte posibles negociaciones comerciales del futuro Mercosur tanto con la Unión Europea como con Estados Unidos.

 

Si eventualmente ello fuera considerado hoy como no conveniente, y si todos los socios compartieran tal visión, la solución podría ser fácil. Esto es: habría que modificar el Tratado de Asunción en las disposiciones antes mencionadas. Pero si se considerara que ello no fuera factible, cabría imaginar alternativas que fueran aceptables para todos los socios.

 

Una alternativa podría ser que el Mercosur negocie acuerdos que contengan preferencias arancelarias con terceros países o grupos de países, pero que incluyan distintos tipos de tratamientos diferenciales para los socios de menor desarrollo económico relativo o los de mercados más pequeños, o basados en otros criterios de diferenciación que pudieran ser aceptables para todos los signatarios.

 

Es obvio que, en tal caso, el tratamiento diferencial no podría ser interpretado como contradictorio con los antes mencionados artículos del Tratado.

 

El actual período de la presidencia del Paraguay puede ser una oportunidad para explorar alternativas como la sugerida, a un acuerdo por ejemplo entre el Mercosur y China. La Secretaría del Mercosur y el Foro Empresarial del Mercosur, podrían cumplir una función útil para imaginar fórmulas que sean viables y aceptables para todos los socios.

 

Fuente: La Nación

China Sees ‘Unprecedented’ Difficulty in Stabilizing 2022 Trade

China faces “unprecedented” difficulty in stabilizing trade next year as favorable conditions that boosted export growth this year won’t be sustainable, according to a commerce ministry official.

 

Export gains may slow as competing countries recover their production capacities and as inflation that pushed up export values gradually eases, Ren Hongbin, vice minister of the commerce ministry, said at a briefing in Beijing on Thursday. This year’s rapid export gains also make the base of comparison higher for 2022, he said.

 

China will enhance trade companies’ awareness and ability to manage foreign-exchange risks, according to Ren. The government will also step up efforts to ease pressures from international logistics and supply chain problems, he said, vowing to actively ensure the supply of commodities.

 

We will “make every effort to keep foreign trade running within a reasonable range,” Ren said. These cross-cyclical measures are meant to help stabilize trade in early 2022, he said. He expected China’s goods imports and exports to grow more than 20% in 2021 to a total of $6 trillion.

 

Ren’s comments echo concerns raised earlier this week by Commerce Minister Wang Wentao, who said it will be hard for China to keep its trade growth stable next year.

 

China’s exports have stayed resilient throughout the year, providing some support for an economy that’s been weighed down by regulatory crackdowns and repeated virus outbreaks. Overseas shipments have posted double-digit gains in every month this year, with an exception in February when shipments jumped 155% from a year-earlier slump.

 

But the outlook for trade is less certain, as overseas appetite for Chinese goods is set to weaken if the global economic recovery loses steam. Chinese exporters are also battling high raw material prices, as well as surging labor and freight costs.

 

 

 

Source: Bloomberg

Erdogan busca aumentar su influencia en África

Turquía estrecha lazos con África. El presidente Recep Tayip Erdogan ha prometido enviar quince millones de vacunas contra la covid al continente negro. El anuncio lo ha hecho en la cumbre de tres días que reúne a decenas de dirigentes, la tercera con los mismos protagonistas.

 

Erdogan ha invertido mucho en África para reforzar las relaciones diplomáticas, comerciales y de defensa. Ahora pide más protagonismo internacional para sus socios. “Los acontecimientos de los últimos años nos muestran a todos que permitir que los 5 países miembros de la ONU designen el destino de todo el mundo fue un error. Es una gran injusticia que el continente africano, con sus 1.300 millones de habitantes, no esté representado en el Consejo de Seguridad de la ONU”

 

Algunos datos reflejan la evolución de las relaciones entre las dos partes. Las embajadas turcas en África han pasado de 12 a principios de este siglo a las 43 actuales. A la inversa, los países del continente han pasado de tener 10 a 37 legaciones en suelo turco en trece años. Y los intercambios comerciales se han multiplicado por casi cinco en dos décadas.

 

La mujer del presidente ha llevado a las primeras damas a una exposición de cultura africana. Erdogan, mientras. ha señalado también la lucha contra el terrorismo como uno de los principales objetivos junto a sus socios.

 

 

 

Fuente: Euronews

UK steel industry braces for slump in trade as US reduces tariffs on EU

The UK steel industry is braced for an immediate slump in trade from New Year’s Day when European Union rivals will gain a 25% price advantage selling to the giant US market.

 

The EU and the US reached a Halloween agreement to remove tariffs on a quota of steel and aluminium imported from the bloc into the US from 1 January, but tariffs will remain on all UK steel and aluminium exports after government talks failed to secure a matching breakthrough.

 

The international trade secretary, Anne-Marie Trevelyan, earlier this month invited the US commerce secretary for further discussions in London, which are understood to be scheduled for January. However, an industry source said they were not optimistic that a deal would be reached quickly.

 

The tariffs were first introduced by former president Donald Trump in 2018 under section 232 of the Trade Expansion Act on national security grounds. Imports supposedly undermined the US’s ability to produce its own steel.

 

British exports to the EU could also be hit because of an unusually strict clause in the EU-US agreement that means steel originating in the UK will still attract the tariffs even if worked on and exported by EU companies.

 

Gareth Stace, the director-general of UK Steel, said: “UK steel exports to the US have halved since President Trump introduced steel tariffs in 2018. There can be no doubt these measures have significantly harmed the UK’s interests in its second biggest steel export market.

 

“Whilst we welcome the move by the US to start easing its tariffs, without a UK deal in very quick succession, our export position will only deteriorate further. It is essential that the government strains every sinew to secure a deal and ensure that UK steelmakers are able to sell their steel into the United States.”

 

Harish Patel, the national officer for steel at Unite, a trade union representing many British steelworkers, said the government needed to explain why the EU had a deal but the UK did not, amid reports that the US was holding back over the UK’s threats to unilaterally change post-Brexit trading rules governing Northern Ireland.

 

The UK negotiated the so-called Northern Ireland protocol barely a year ago as part of the Brexit trade deal with the EU, but it has repeatedly said it may unilaterally break it off. President Joe Biden has warned Boris Johnson against threatening peace on the island of Ireland.

 

Junior international trade minister Penny Mordaunt this month denied that the failure to reach a steel deal was linked to Brexit. She told parliament: “That story might be true in terms of how some people in the United States feel, but it is a false narrative. These are two entirely separate issues.”

 

Patel said: “It is alarming that British-produced steel is being effectively locked out of the critical steel market, as the continuing tariffs make EU steel considerably cheaper.

 

“The government has to sort this matter out quickly. Unless the tariffs are speedily lifted, hundreds of jobs in the steel and associated industries, most of them in so-called red wall seats, are at risk.”

 

A government spokesperson said: “We recognise the vital role the steel sector plays in our economy and our priority is to resolve this dispute to the benefit of workers and businesses on both sides of the Atlantic, removing the need for the UK to levy retaliatory tariffs on US goods.

 

“Until that resolution is agreed, the UK will continue to apply its rebalancing measures to defend our economic interests and the rules-based international trading system.”

 

 

Source: The Guardian