Trade Dispute
A stiff Turkey?
Relationship between Turkey and Russia became more strained after Turkey imposed stiff tariffs on imports of Russian grains, which include wheat, corn and maize. Even as Ankara denied reports of a ban, it was claimed that Turkey had removed Russia from the list of countries that enjoy zero customs duties. This means that Russian grains will now face a prohibitive 130% duty while entering Turkey, making its imports unprofitable and unfeasible.
Turkey being the second-largest buyer of Russian wheat, the trade disruption has not only added pressure to Russian grain market but has also upset Turkish millers who are now purchasing grain from EU and Black Sea countries to cover their short-term needs.
Moscow-Ankara ties have been strained since late 2015 when Turkey shot down a Russian airplane in Syria prompting Russia to impose a damaging food import ban on Turkey. The relations started to thaw in August 2016 as Moscow lifted restrictions on import of Turkish onions, cauliflower, broccoli and salt. But the trade sentiment soured again as a Russian ban on several Turkish fruits and vegetables came in force. Meanwhile, accusing Turkey of violating global trade standards, Russia has been saying that it will not lift its current import ban on Turkish poultry, frozen meat as well as tomatoes, cucumbers, grapes, apples and pears. It’s worth mentioning that Turkey is the fifth-largest importer of Russian goods and one of the biggest buyers of Russian grains. The sides have much to lose if relations don’t improve soon.
First freight train
Reviving the Silk Route
Heralding the dawn of a new commercial era between UK and China and reviving the ancient Silk Road route, the first-ever UK to China freight train started its journey in the first week of April. Loaded with British goods including whisky, soft drinks, vitamins and baby products, the 32-container train will take three weeks and cover 7,500 miles, travelling across France, Belgium, Germany, Poland, Russia and Kazakhstan before it reaches China. Cheaper than air freight and faster than sea cargo, the freight service offers an optimum solution to logistics companies and is likely to be a harbinger of new trade opportunities.
Breast Milk exports
No baby’s play
Putting a complete end to a controversial trade, Cambodia banned the export of human breast milk – a move that is welcomed by the UNICEF. The order came after Cambodia temporarily halted exports of breast milk to a US-based company Ambrosia Labs. The company had been buying milk from 90 Cambodian women and selling it to mothers in US. While UNICEF hailed the Cambodian government’s decision saying the practice of selling breast milk was exploitative, the company has defended the practice stating that its business provided income to needy Cambodian women besides helping mothers in US.
Copper concentrate exports
A stitch in time
After prolonged negotiations and open conflict, the long-running dispute between mining giant Freeport McMoRan and Indonesian government appears to have reached an end. At least for now, as Jakarta allows the miner to temporarily resume copper concentrates exports from Grasberg, the world’s richest copper mine. With losses mounting to millions of dollars on both the sides, Freeport and the Energy and Mineral Resources Ministry of Indonesia negotiated a deal and resolve the dispute over the future of this mine. The company has been pe rmitted to ship 1.1 million metric tonnes of copper concentrate till October 2017.
Free Global Trade
A clarion call
Amid growing concern over US President Donald Trump’s protectionist trade stance, a report by World Trade Organisation (WTO), International Monetary Fund (IMF) and World Bank defended free trade against the protectionist agenda, saying an “open trading system based on strong, well-enforced rules” was critical for the world’s prosperity. In a joint report, the trio also asked governments across the globe to address the negative effects of free trade, such as job losses in the importing country. The report pointed out that the impact of open trade across borders has left too many individuals and communities behind. In addition, the report emphasised the role of trade in a global economy saying “it is at a critical juncture”. It must be recalled that WTO had recently forecast the growth of global trade to be at 2.4% in 2017, slightly higher than that in 2016. The report by these three influential global institutions urged policymakers to defend the current rules of global trade.
Gas trade
Aiming for the sea
With an aim to pump natural gas from Eastern Mediterranean to EU markets, Israel and several EU nations have agreed to move ahead with the world’s longest undersea gas pipeline. By signing the preliminary agreement with Cyprus, Italy and Greece, Israel signalled its ambitions to export natural gas to European markets. Stretching more than 2,200 km across the bed of Mediterranean Sea, the $6-7-billion mega pipeline project aims to link offshore gas fields of Israel and Cyprus to Greece and Italy. If reports are to be believed, more than 900 billion cubic meters of gas has been discovered around the Israeli coast. And if carried out as planned, the pipeline project would reduce EU’s dependence on Russian and Turkish energy supplies while changing the energy geopolitics of the region. Eyeing to become a leading gas exporter, Israel is also looking at options to export gas to Jordan, Egypt and Turkey, countries with which Israel has had a strained history.
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