News, events and analyses related to global trade and snippets of changing trade matrix during the month of January 2015  

China

Ban on ‘Bred in USA’ poultry and related products

‘Foul’ fowl suspect: China bans US poultry products

China has put restrictions on import of poultry and poultry products from US starting January 8, 2015. This, after reports of avian influenza came to light in the Pacific Northwest. Notably, poultry and poultry products worth $272 million were exported from US to China between January and November 2014. During just the past year, over $153 billion of this product category exports from US made way into China. USDA officials have said that China’s move has come after Hong Kong put a ban on import of some varieties of poultry and poultry products from US in December 2014, following reports of two separate virus strains, including H5N2 virus in northern pintail ducks, was identified in Whatcom County in Washington.
Recently, some birds at two private farms in Canada in British Columbia died after being affected by H5N2 virus. There have however been no reports of virus stains in commercial poultry in US. Notably, China banned import of poultry products from Virginia in US in June 2007 after a case of low-pathogenic bird flu was reported at a poultry farm. India has also put a ban on import of US poultry on account of bird flu since 2007. However, WTO has stated that India’s ban is unscientific, and is only meant to protect its domestic poultry industry. Apart from India, 20 other countries have also put a ban on poultry imports from US.

Reduction in tariff barriers

Boost to ‘Made in USA’

More US products get duty-free in 2015

More export products from US got duty-free entry as partners of US trade agreements continued to phase out tariffs on eligible US industrial goods exports starting January 1, 2015. Select tariffs were fully eliminated on eligible US industrial goods exports to Australia, Bahrain, CAFTA-DR countries and Morocco. On the other hand, tariff reduction continued in Peru. The new initiative has given US export products an advantage in these markets. Starting the new year, both Australia and US eliminated their remaining tariffs on eligible textile and apparel imports from the partner countries. A statement by the International Trade Administration of the US Department of Commerce states that, “All textile and apparel tariffs under the US–Australia agreement have been fully implemented. all textile and apparel tariffs under the U.S.-Australia agreement have been fully implemented. Eligible industrial and textile and apparel goods traded between the United States and Australia are now completely duty-free.” The elimination of all industrial tariffs on January 1, 2015 allows US companies to export eligible industrial goods duty-free to Bahrain in the following categories: chemicals, metals, paper and consumer goods, to CAFTA-DR markets: chemicals, consumer goods and metals, Morocco: automobile, infrastructure machinery and rubber, and Peru: chemicals, infra machinery and paper. This development is definitely good news for the Obama administration that has forever been reeling under a huge trade deficit.

The start to the new year has been pleasing for Made in USA manufacturer-exporters

EU - Kazakhstan

Trade pact

EU, Kazakhstan agreement

The EU-Kazakhstan Enhanced Partnership and Cooperation Agreement was initialed in Brussels on January 20, 2015. This agreement will facilitate stronger political and economic relations between the bloc and Kazakhstan. It will increase the flow of trade, services and investment between the two and contribute to Kazakhstan’s political and social development. The start of the Agreement is an important step towards its implementation. Kazakhstan is the first Central Asian partner to have concluded an Enhanced Partnership and Cooperation Agreement with the EU. The new Agreement will replace the Partnership and Cooperation Agreement in force since 1999, and will give the EU–Kazakhstan relations a new up-to-date and stronger foundation. Over the past decades, EU has become Kazakhstan’s prime trading partner and first foreign investor, representing over half of total FDI in Kazakhstan. Bilateral trade amounts to above €31 billion, of which €24 billion is Kazakhstan’s exports, notably oil, while about €7.5 billion is EU’s exports to Kazakhstan, mainly manufactured goods, machinery and equipment. The biggest opportunity that his pact creates is for SMEs in both partner zones.

Downtown of Astana city – the capital of Kazakhstan

Taiwan - Netherlands

Collaboration: 3D printing

Hope for the 3D printing industry

The largest research institutes in Taiwan and the Netherlands, i.e. Taiwan’s ITRI (Industrial Technology Research Institute) and Netherland’s TNO (Netherlands Organization for Applied Scientific Research), have announced a partnership to create a strong international research platform for 3D printing technology, one that will be of assistance to those dealing in 3D printing across the two nations. While ITRI will be providing a laser metal 3D printing technology that it has developed, TNO will provide its stereo-lithography apparatus (SLA) technology. Laser metal 3D printing is a modern variation of the so called additive manufacturing (AM) process. AM is essentially the building of 3D objects by adding layers upon layers of materials such as metal, plastic, or concrete. In terms of efficiency when compared to traditional manufacturing methods, the AM process can offer vast cost and time savings, especially for the production of complex, reusable parts. Some hope for 3D technology, finally!

3D printing can be used to create anything from architectural prototypes to spacecrafts

Great Britain

Investment in Egypt

Brit - Egyptian relation: A case of benevolence?

British Minister for the Middle East and North Africa Tobias Ellwood, on January 12, 2014, visited Cairo to boost trade and increase British investment in Egypt. The delegation included over forty British companies from the energy, construction, and retail sectors. Currently, Britain is the number one investor in Egypt. During FY2014, British investment in Egypt totalled over $5 billion, more than the sum of all investments that came in from all other countries. As per British officials, their country stands ready to support Egypt and implement economic reforms to help make it a more attractive environment for business and investment, besides helping its economic and social engines chug forward. We however know that no economic ties were forged on the platform of pure kindness. It’s however a surprise that Egypt accounts for just 0.3% of UK’s total exports – it’s no.42 by value on the list of countries to which Britain exports commodities. Perhaps kindness it is then...on Britain’s part!

Tobias Ellwood, British Minister for Middle East and North Africa

Australia - Japan

JAEPA: A win-win partnership

How Abbott and Abe agreed!

The Japan-Australia Economic Partnership Agreement (JAEPA), came into effect on January, 15, 2015. The pact is the biggest development in terms of economic partnerships between the two regions since the Agreement on Commerce in 1957. The new pact will strengthen the strategic partnership between the two, boost trade of goods and services, and also ease bilateral investment restrictions. The Agreement provides valuable preferential access for Australia’s exports in the recession-struck Japan market. Australia and Japan are natural partners with highly complementary economies. While for Japanese consumers, Australia-manufactured beef, cheese, horticulture products, wine, seafood, wool, cotton, lamb and beer should be pleasing, for the Aussie market, Japan-made automobiles, white goods and electronics should find increased presence. Close to $60 billion of bilateral trade between the two nations means that there is still room for growth in trade.

UK Export Finance (UKEF)

Facilitation of exports to Rwanda

Tempting Britons to the Rwandian market

The UK Export Finance (UKEF), Britain’s export credit agency, has announced that it is making enhanced cover available to UK exporters competing for business in Rwanda. Enhancing the cover available means that, for the first time, UKEF will be able to provide guarantees for repayments to banks financing UK capital goods and services, as well as projects involving UK exporters. UKEF is also able to provide insurance to UK exporters against the risk of non-payment in Rwanda. The total amount of cover available for exporters to Rwanda is $75 million, but UKEF is willing to consider contracts that exceed this amount provided that the project generates foreign currency for Rwanda. Concerning this decision by UKEF, its Chief Executive David Godfrey said, “There are still challenges ahead for Rwanda but the improved cover that UK Export Finance has made available will help British exporters to expand into this country and, in particular, to get comfortable with the perceived payment risks.”  

New Zealand

Education services exports

An island for education?

International education continues to be New Zealand’s export-led growth according to latest data, says, Steven Joyce, New Zealand’s Minister of Tertiary Education, Skills and Employment. The International Education Snapshot report shows that the international education industry grew strongly throughout 2014 and it is now valued at $2.85 billion. The January to August 2014 results show a 12% increase in student numbers (approximately 10,100 students) when compared with the same period in 2013. International education continues to be an important export earner for New Zealand. In 2013, foreign exchange to the tune of $32 billion was earned through the mode of education services exports. Findings of an analysis conducted by The Dollar Intelligence Unit however has an alarm to raise for New Zealand. Since, 2009, exports (by value) through education has been on a downhill ride. It fell from $56.24 billion in 2009 and $69.91 billion in 2010, to the current level. Joyce has to check the fall.

Steven Joyce, Tertiary Education, Skills and Employment Minister, New Zealand

US - Bahrain

FTA extended by seven months

Hope to some, for some months

US and Bahrain have temporarily extended some clauses of their existing FTA that provides for duty-free bilateral trade across all product lines. The 10-year old agreement which originally expired on December 31, 2014, has been extended till July 31, 2015. The announcement has brought cheers to the garment and textile industry in Bahrain, as the country exports $200 million worth of textile products to US. The timeline was extended by US after some Bahraini business representatives brought to the notice of US officials that the agreement got effective only in August 1, 2006, hence the agreement ends on July 31, 2015 instead of December 2014. What’s it in for US? Through duty elimination, the FTA allows provides market access for US’ consumer and industrial products. It allows American companies to be more price-competitive in the Bahraini market when competing with domestic suppliers and with third country suppliers that do not have duty benefits.

The announcement of US-Bahrain FTA extension has brought some peace to Bahrainian garment and textile industry exporters to US