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

EU-China

Market Economy Status

Beware of the dragon’s fire

Pre-empting future barriers for its exports, China has fired warning shots at EU and asked the 28-member union to desist from taking any such step. This, on the back of fears in China that EU might bring in legislation to negate WTO treating the former as a market-based economy from late-2016, which will make differential treatment of Chinese goods in EU more difficult. Making this clear, China’s ambassador to EU, Yang Yani, while addressing the European Parliament’s trade committee, said, “This is not something bilateral (with European Union). According to the WTO, China will obtain this market economy status in 2016. So, we hope all sides abide by WTO rules and don’t resort to protectionism and prudently use trade defence instruments.” It’s worth noting that China’s new status of a ‘market-based economy’ has many up in arms in EU, since they feel it’s nothing but illogical to give that status to a centrally planned, communist economy like China.

EU

Alcoholic Drinks

Tipsy and counting

Here’s something worth a toast. Europeans may now be able to count the calories every time they indulge in that ‘one too many’ or better still ‘one to many’. Responding to consumer advocates calling for nutritional labelling on alcoholic drinks, the European Parliament has asked the European Commission to bring about legislation requiring such labelling by 2016. Adopted by 63 of the 68 members of the Parliament’s health committee, the resolution also calls for labels that highlight the dangers of alcohol for pregnant women and motorists. Speaking about the legislation, Glenis Willmott, a Labour MEP from UK, who steered the proposal through the committee after the first failed attempt in 2011 because of ‘heavy lobbying’ from the drinks industry, said, “Consumers have a right to know that a glass of wine has the same number of calories as a slice of cake and that drinking while pregnant can harm your baby. This isn’t about telling people what to do but giving them the information they need to make judicious choices.” It’s worth noting that EU member countries have some of the highest per capita alcohol consumption and highest alcoholic beverages exports figures in the world and such a legislation has the potential to impact trade volumes in the future.[sociallocker id="9714"]

Australia-China

Media Portal

Enduring and endearing entertainment

Australia is making further forays into China, with the launch of a multi-media portal, AustraliaPlus.cn. Started recently by ABC (Australian Broadcasting Corporation), in collaboration with Shanghai Media Group, the portal will provide Chinese audiences access to Australian content. It will be co-promoted and utilised by prominent Chinese television, radio and online outlets such as CCTV, Beijing TV, China Daily Online, Tencent QQ, Sina Weibo and Youku. ABC is reported to be the first mainstream western media organisation to secure such access. Commenting on this breakthrough, Australian Trade and Investment Minister Andrew Robb said the landmark FTA with China represented a high watermark in the relationship between the two countries and the portal would help promote the country at a time when there is heightened interest within China. “China is our biggest trading partner and our largest source of tourists and international students, as well as a growing two-way investment partner. It is a country with a rising middle class and the more we can do to promote all that Australia has to offer to large numbers of aspiring Chinese the better,” he said.

WTO

Growth Revival

Barely out of the woods

According to WTO, 2015 and 2016 could witness a revival in world merchandise trade from the otherwise moderate growth experienced in the last few years. The global trade regulator believes merchandise trade will expand by 3.3% in 2015 on the back of a pickup in output in the developed, as well as the developing world. The international trade body also expects the expansion to accelerate to 4% in 2016, which, though still below the average of 5.1% since 1990, compares well with the average of 2.4% in the last three years. Commenting on this, WTO Director-General Roberto Azevêdo said, “Trade growth has been disappointing in recent years, due largely to prolonged sluggish growth in GDP following the financial crisis. Looking forward we expect trade to continue its slow recovery but with economic growth still fragile and continued geopolitical tensions, this trend could easily be undermined.”

ASEAN-US

Supply Chain

Finally, some recognition

The contribution of small and medium enterprises (SMEs) to an economy is quite sizeable and significant, but it’s a no-brainer that they are yet to make their presence conspicuous in global supply chains. In an endeavour to facilitate this, US-ASEAN Business Council (US-ABC) and US Agency for International Development (USAID), in collaboration with Vietnam Textile and Apparel Association (VITAS), Leather and Footwear Association of Vietnam (LEFASO), as well as American companies including UPS and Nike, have initiated a business alliance programme for providing information, training and mentoring services on the best supply chain management practices. Through it, ASEAN SMEs will be provided an opportunity to foster and expand capabilities to access external markets and integrate themselves into global supply chains. Commenting on the initiative, Shiumei Lin, Vice President for Public Affairs and Sustainability, UPS Asia Pacific; and Vice-Chair of ASEAN Committee, US-ASEAN Business Council, said, “We are thrilled to support the competitiveness of SMEs in South East Asia to join global supply chains. Through our collaborative efforts, we aim to help SMEs capture growth opportunities under the ASEAN Economic Community, and prepare for participation in the regional and global economy.”

New Zealand

Meat Exports

Kiwi meat for that juicy steak

Beef and lamb meat exports from New Zealand is soaring like never before, with China and US taking a special liking for them. According to Beef and Lamb New Zealand, beef exports from New Zealand are up 40% y-o-y in the first six months of the new season, which started in October, and have already reached $1.6 billion. Similarly, the nation’s lamb exports are also up, despite less number of lambs having been shipped. It’s worth noting that edible meat exports account for close to 12% of New Zealand’s total exports of $41.6 billion (CY2014), with China being the top destination for lamb, sheep and goat, and US being the top destination for frozen bovine meat.

Russia-Greece

Sanctions

To avoid the last straw on the back

Greek Prime Minister Alexis Tsipras’ scathing criticism of the European Union’s sanctions against Russia, for its involvement in the Ukraine strife, is bound to stir a hornet’s nest. Following a meeting with Russian President Vladimir Putin, Tsipras has stated that EU should “leave behind this vicious cycle of sanctions.” The outburst is seen as a reflection of dissidence among some members of EU, particularly the economically weaker ones, against the sanctions that are impacting their own trade prospects. It’s worth noting that last year, Russia issued a blanket ban on importing most agricultural products from EU, in retaliation against sanctions imposed by the bloc against Moscow. Greece, which is already reeling under an economic crisis, was particularly hard-hit as over 40% of its exports to Russia comprise farm products.