Mexico Invites U.S. Trade Team to Third Round of Energy Consultations

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-Mexico’s Economy Ministry has invited U.S. Trade Representative Katherine Tai’s team to hold third round of energy consultations in the coming days in Mexico City, according to an economy ministry statement published Thursday.

 

Mexico’s Economy Minister Raquel Buenrostro met on Thursday with U.S. Trade Representative Tai to work on solutions for the energy and environmental consultations requested for Mexico, according to the statement.

 

The U.S.-led complaint argued Mexico’s drive to tighten state control of the energy market was unfair to its companies and likely breached its trade pact, the United States-Mexico-Canada Agreement (USMCA).

 

Buenrostro proposed establishing working groups, which would meet during December and early January to discuss the different aspects of the energy consultations.

 

The progress would then be presented at the North American Leaders’ Summit, set to be held in Mexico during January 9-10 next year.

 

Mexican authorities stressed that they were seeking to resolve the dispute in the consultation phase and avoid the need to resort to arbitration panels, the statement said.

 

Tai also stressed the importance of avoiding any disruption in U.S. corn exports to Mexico, her office added in a statement late on Thursday.

 

The United States on Monday threatened legal action against Mexico’s plan to ban imports of genetically modified (GM) corn in 2024, saying it would cause huge economic losses and significantly impact bilateral trade.

 

Supporters of the ban argue GM corn could contaminate Mexico’s native varieties.

 

Mexico’s foreign ministry is also preparing a meeting with other high-level authorities and U.S. Secretary of Agriculture Tom Vilsack, the economy ministry statement added.

 

Source: U.S.News

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Philippines to Cut Tariffs on Electric Vehicles, Parts

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A Philippine inter-agency panel chaired by President Ferdinand Marcos Jr on Thursday approved removing tariffs on electric vehicles (EVs) to spur demand amid high fuel costs.

Marcos will issue an executive order cutting to 0% the most favoured nation tariff on EVs like passengers cars, buses, vans, trucks, motorcycles, and bicycles, and their parts for five years. Current import duties range from 5% to 30%.

“The executive order aims to expand market sources and encourage consumers to consider acquiring EVs, improve energy security by reducing dependence on imported fuel, and promote the growth of the domestic EV industry ecosystem,” Economic Planning Secretary Arsenio Balisacan told a news conference.

Consumers in the Philippines currently need to shell out $21,000 to $49,000 for an EV, versus the $19,000 to $26,000 price for conventional vehicles.

Tariff rates on hybrid vehicles will not change.

Of the country’s more than five million registered automotives, only 9,000 are electric, mostly passenger vehicles, government data show. Personal EVs account for just 1% of the market, and are mostly owned by the extremely wealthy, data from the United States’ International Trade Administration show.

The Southeast Asian nation’s automotive sector relies mostly on imported fuel. It also buys oil and coal abroad for its energy generation needs, making it vulnerable to price volatility.

Source: U.S.News
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Germany Plans to Tighten Rules for Firms Highly Dependent on China

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Germany’s foreign ministry plans to tighten the rules for companies deeply exposed to China, making them disclose more information and possibly conduct stress tests for geopolitical risks, a confidential draft document seen by Reuters said.

 

The proposed measures are part of a new business strategy towards China being drawn up by Chancellor Olaf Scholz’s government as it seeks to reduce its dependency on Asia’s economic superpower.

 

“The aim is to change the incentive structure for German companies with market economy instruments so that reducing export dependency is more attractive,” said the document, singling out the chemicals and car industries.

 

A spokesperson for the foreign ministry declined to comment.

 

The draft, drawn up by the foreign ministry led by the Greens’ Annalena Baerbock, still has to be agreed by other ministries. A final decision on the China strategy is expected early next year.

 

Deep trade ties bind Asia and Europe’s biggest economies, with rapid Chinese expansion and demand for Germany’s cars and machinery fuelling its own growth over the past two decades. China became Germany’s single biggest trade partner in 2016.

 

However, the relationship has come under close scrutiny since Russia’s invasion of Ukraine in February, which led to the end of a decade-long energy relationship with Moscow and caused numerous companies to ditch their local businesses.

 

“We must not make this mistake again. This is the responsibility of politicians and companies,” said the document.

 

Among the steps outlined in the 65-page paper, some of which have already been reported, is a tightening of rules for firms active in China to ensure geopolitical risks are accounted for.

 

“We aim to oblige companies particularly exposed to China to specify and summarize relevant China-related developments and figures, for example in the form of a separate notification obligation, on the basis of existing disclosure requirements,” said the document.

 

“On this basis, we will assess whether affected companies should conduct regular stress tests in order to identify China-specific risks at an early stage and take corrective measures.”

 

Investment guarantees will face greater scrutiny to take account of the environmental impact, work and social standards and to avoid forced labour in the supply chain, said the document. To avoid cluster risks, investment guarantees should be limited to 3 billion euros per company per country, it added.

 

The government also plans to tighten export credit guarantees to avoid unwanted technology transfer, in particular sensitive dual-use technologies and those that can be used for surveillance and repression, said the document. The new strategy, pushed hard by the Greens in the coalition, led by Social Democrat Scholz but also including the pro-business Free Democrats, marks a departure from Berlin’s policies under former conservative Chancellor Angela Merkel.

 

Source: U.S.News
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Germany’s Scholz Visits Vietnam as Manufacturers Eye Shift From China

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German Chancellor Olaf Scholz discussed energy and trade ties with Vietnam’s Prime Minister Pham Minh Chinh during a visit to Hanoi on Sunday, the first for a German leader in more than a decade.

 

Scholz’s stop in Vietnam on his way to the G20 leaders’ summit in Indonesia, highlights Vietnam’s growing role in global supply chains as many German firms consider diversifying their manufacturing operations by expanding their presence beyond China, their main hub in Asia.

 

At a joint news conference with Chinh, Scholz said Berlin wanted deeper trade relations with Vietnam and would support the country’s transition to a greener economy, including through the expansion of the metro system in Hanoi, Vietnam’s capital.

 

The Hanoi visit follows Scholz’s trip to China last week, the first by a Western leader in three years since the start of the COVID-19 pandemic. He will next visit Singapore before heading to the G20 summit on Nov 15-16.

 

Vietnam and Singapore are the only countries in Southeast Asia that have a free trade agreement with the European Union. As a result, they are the EU’s biggest trading partners in the region.

 

Germany is Vietnam’s second-largest trading partner among EU states after the Netherlands, with exchanges worth $7.8 billion last year, according to law firm Dezan Shira – far less however than the United States, China, Japan and South Korea.

 

About 500 German firms operate in Vietnam, of which around 80 have manufacturing plants in the country, according to the German chamber of commerce in Vietnam, AHK.

 

Among them are engineering giant Bosch, energy firm Messer, and several smaller companies involved in the global automotive supply chain.

 

Many more are looking to diversify some of their activities away from China where about 5,000 German companies operate, AHK head in Vietnam, Marko Walde, told Reuters.

 

Over 90% of German firms planning such a move look at Southeast Asia as their preferred choice, Walde said, noting that Vietnam and Thailand were favourites in the region.

 

Source: U.S.News

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EU Industry Chief Issues China Warning Ahead of Scholz’s Beijing Visit

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The European Union’s industry chief said on Monday that European governments and companies must realise China is a rival to the EU and they should not be naive whenever they approve Chinese investment.

 

European Commissioner Thierry Breton’s comments appeared to be aimed in part at Germany, whose Chancellor Olaf Scholz will visit Beijing on Friday.

 

Over the past few years, the EU has passed a series of defensive measures designed to better control investment from state-owned foreign players, including from China, to ensure rival powers do not gain more political leverage over the bloc.

 

But many diplomats have been baffled by Germany’s recent decision to approve the sale of a stake in Hamburg’s port, the country’s largest, to a Chinese company

 

In an interview with Reuters, Breton said he “preferred” the decision to sell only 25% of the terminal to China’s Cosco than the original proposal, which would have sold China more than a third and give it a blocking minority.

 

“We need to be extremely vigilant,” he said.

 

Breton said that since the EU had labelled China a “systemic rival” in 2019, the EU had adopted a series of measures they can use to block investment in critical infrastructure.

 

“It’s up to member states to use them and change their behaviour,” Breton said.

 

Scholz’s visit to Beijing will be the first by an EU leader since the start of the COVID-19 pandemic.

 

He has faced criticism ahead of the trip for allowing Cosco to invest in Hamburg, despite strong pushback from his governing coalition partners amid concerns over Chinese influence over critical infrastructure.

 

French and German government sources told Reuters French President Emmanuel Macron had suggested to Scholz they go together to Beijing to send a signal of EU unity to Beijing and counter what they see as Chinese attempts to play one country over another.

 

But the German chancellor declined Macron’s offer, the sources said.

 

Asked about Scholz’s trip, Breton said EU countries should adopt a more united approach.

 

“It’s very important that the behaviour of member states towards China… change in a way that’s more coordinated than individually-driven, as China obviously wants us to be,” he said.

 

The more defensive EU approach towards China was the result of Beijing’s attitude during the COVID-19 pandemic that saw Chinese autorities exploit countries’ reliance on China for equipments such as face masks to gain diplomatic leverage, he said.

 

“We can’t forget all of that,” Breton said. “The era of naivete is over. The European market is open, with conditions.”

 

He also warned European companies tempted to increase their investment in China that they did so at their own risk in a country that was becoming more “autocratic”.

 

Germany’s BASF said it would cut the size of its European sites “permanently” because of a triple burden of sluggish growth, high energy costs and over-regulation, and planned expansion in China instead.

 

“There are uncertainties for the companies that make this bet,” Breton said. “There’s a very important advantage in being based in Europe, with the rule of law, company protection and visibility,” he said.

 

 

Source: U.S.News
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Cuba Hosts First U.S. Business Conference in Years, Seeks Investment

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A few dozen U.S. entrepreneurs braved tough U.S. sanctions and Cuba’s worst economic crisis in decades to attend a conference in Havana on Wednesday focusing on the new private sector and aimed at boosting flagging engagement between the Cold War-era foes.

 

The Cuban Chamber of Commerce and Washington-based consultancy FocusCuba, which are hosting the gathering, said the three day event was the first such forum since at least 2018 when former U.S. President Donald Trump piled new sanctions on top of the decades-old trade embargo.

 

Both the Cuban and the U.S. delegations criticized the sanctions – most of which are still in place – and called on Democrat U.S. President Joseph Biden to drop his Republican predecessor’s policies.

 

Cuban Chamber of Commerce President Antonio Luis Carricarte called the gathering in the famous Hotel Nacional an “historic day,” praising the persistence of representatives in attendance from both side of the Straits of Florida.

 

During a brief thaw in relations under former President Barack Obama, hundreds of U.S. businesses arrived to explore opportunities on the all but forbidden Communist-run island nation.

 

Some, from cruise ship companies to Western Union Co and Starwood Hotels inked groundbreaking agreements, only to have new U.S. sanctions force them to renege. Others continue to do business.

 

The government has licensed Cubans to operate nearly 5,500 private small and medium sized businesses over the last year, in a first since Fidel Castro’s 1959 Revolution, opening new possibilities for partnerships with foreign investors.

 

“Almost everything we do is with the new booming private sector,” said Cuban-American Hugo , whose Miami-based Fuego Enterprises Inc operates an online food market that processes 4,000 orders in Cuba per day.

 

“It is important American businesses see this for themselves,” said Cancio, who was attending the conference.U.S. entrepreneurs in attendance represent a range of industries from food services to online shopping, digital money transfers, shipping, and finance.

 

“I think participants are seeking clarity in terms of what is possible with investment on the Cuban side in this new private sector, though any agreements must also be approved by U.S. regulators,” said Phil Peters, founder of FocusCuba told Reuters. “We need more clarity there as well.”

 

The White House did not immediately respond to a request for comment.

 

The Biden administration has loosened some restrictions on Cuba around remittances, tourism and migration. It has also expressed interest in supporting Cuba’s private sector.

 

Source:U.S.News
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Ireland to Extend Business Energy Supports to Newly Opened Businesses

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Irish businesses that have opened in the last year will be able to avail of an energy grant scheme that was initially limited to those that had been established for longer, Finance Minister Paschal Donohoe said on Tuesday.

 

The government introduced the 1.25 billion euro scheme in last month’s budget, providing businesses such as hotels, shops and restaurants with up to 40% of the increase in electricity or gas bills if those costs have risen by over 50% year-on-year.

 

Donohoe said a new procedure to facilitate more recently opened businesses will be included in the legislation underpinning the budget to give them access the scheme and not put them at a competitive disadvantage.

 

He said the legislation to be published on Thursday would also extend the scheme, which is capped at 10,000 euros per month and due to last until February, to some professional services.

 

Source: U.S.News
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French Development Minister Backs World Bank Reforms, Calls for U.S. SDR Loans

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France’s development minister is backing U.S. Treasury Secretary Janet Yellen’s call for the World Bank and similar institutions to vastly expand their lending, but said the United States needs to join France and other countries in channeling its IMF monetary reserves to poorer countries.

 

Chrysoula Zacharopoulou, Secretary of State for Development, Francophonie and International Partnerships, told Reuters in an interview late on Thursday that the world needs “to move on” from the old development financing model focused on individual projects to broadly increase support to African countries and other developing nations hit by global challenges.

 

Last week, Yellen called on the World Bank and other multilateral development lenders to revamp their business models, stretch their balance sheets and harness more private capital to dramatically boost lending to address global needs such as climate change.

 

Yellen asked for an “evolution roadmap” from the World Bank by the end of December.

 

Zacharopoulou, who is attending the International Monetary Fund and World Bank annual meetings in Washington this week, said France was ready to help with the reforms.

 

“Between the USA and France, we can work very well and maybe together propose something regarding the reform of the international financing system, so I totally agree in principle with the new ideas proposed by Secretary Yellen,” the French minister said.

 

Despite strong support for increasing resources to war-torn Ukraine at the IMF and World Bank meetings, Zacharopoulou said that countries also needed to keep up a strong focus on supporting other developing countries.

 

“We need to avoid the division between North and South. All of us were impacted by this crisis and poverty is increasing everywhere,” she said. “Populations want us to deliver. If not, there is a real risk of social discontent everywhere.”

 

She said wealthier countries, especially the United States, needed to contribute part of last year’s $650 billion distribution of IMF Special Drawing Rights (SDR) monetary assets to trust funds for poorer countries.

 

France has contributed about 20% of the $37.6 billion worth of SDRs that it received to IMF trust funds including the new Resilience and Sustainability Trust for vulnerable middle-income countries and island states, and it has pledged to increase that to 30%.

 

The United States has not contributed any of its $101.5 billion share of the SDR allocation to the trust funds, a move that would require approval from Congress.

 

“We need the USA” to join in the reallocation of its SDRs to countries that need them, Zacharopoulou said. “We have to deliver.”

 

Yellen told a news conference on Friday that the Biden administration is seeking congressional approval to lend $21 billion worth of SDRs to poorer countries through the IMF trust funds. The request was made as part of a fiscal 2023 appropriations bill.

Source: U.S.News

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China Lashes Out at Latest U.S. Export Controls on Chips

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China on Saturday criticized the latest U.S. decision to tighten export controls that would make it harder for China to obtain and manufacture advanced computing chips, calling it a violation of international economic and trade rules that will “isolate and backfire” on the U.S.

 

“Out of the need to maintain its sci-tech hegemony, the U.S. abuses export control measures to maliciously block and suppress Chinese companies,” said Foreign Ministry spokeswoman Mao Ning.

 

“It will not only damage the legitimate rights and interests of Chinese companies, but also affect American companies’ interests,” she said.

 

Mao also said that the U.S. “weaponization and politicization” of science and technology as well as economic and trade issues will not stop China’s progress.

 

She was speaking after the U.S. on Friday updated export controls that included adding certain advanced, high-performance computing chips and semiconductor manufacturing equipment to its list, as well as new license requirements for items that would be used in a supercomputer or for semiconductor development in China.

 

The U.S. said that the export controls were added as part of ongoing efforts to protect U.S. national security and foreign policy interests.

 

U.S.-China relations have deteriorated in recent years over technology and security issues. The U.S. has implemented a raft of measures and restrictions designed to prevent China from obtaining chip technology, while China has earmarked billions for investment into the production of semiconductors.

 

The tensions have impacted semiconductor companies in the U.S. and globally which either export chips or manufacture chips in China. Semiconductor companies such as Nvidia and AMD has seen a 40% decline in stock price over the past year.

 

“We understand the goal of ensuring national security and urge the U.S. government to implement the rules in a targeted way—and in collaboration with international partners—to help level the playing field and mitigate unintended harm to U.S. innovation,” the Semiconductor Industry Association, which represents U.S. semiconductor industry, said in a statement.

 

 

Source:  U.S.News
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Costa Rica to Suspend Tariff Benefits for Panamanian Products Amid Trade Dispute

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Costa Rica will suspend tariff benefits for Panamanian products, the country’s foreign trade ministry said on Thursday, marking another step in a bilateral trade dispute that started in 2020 and is the subject of a World Trade Organization (WTO) lawsuit.

 

Costa Rica suspended tariff benefits for its southern neighbor after Panamanian authorities failed to comply with a 2021 ruling regulating tomato trade between both parties, according to a statement published by the ministry which did not specify the items affected or when the suspension would be enacted.

 

“I hope they understand … we are ready to go all the way,” Costa Rican Trade Minister Manuel Tovar told lawmakers on Wednesday.”Taxing products that arrive through free trade as a retaliatory measure is an example of what we are willing to do,” he added.Costa Rica and Panama entered a Free Trade Agreement (FTA) in 2008.

 

Authorities from Panama’s Ministry of Commerce and Industries could not be immediately reached for comment.

 

Panamanian authorities have previously stated they are confident both sides will find a solution to solve the dispute.

 

Commerce and Industries Minister Federico Alfaro said in a tweet late on Wednesday that both countries recognize the WTO’s competence to solve the dispute.

 

Panama is the fifth largest market for Costa Rican products by value, according to government statistics.

 

Costa Rica’s imports from Panama totaled $221 million and exports amounted to $603 million in 2021.

 

Source:  U.S.News

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