International Trade News from Across the World

Did protectionism force EADS to scrap a $35 billion bid to supply the American air force?

The Economist

• Comment: "The repercussions of this affair are likely to poison European-American trade relations and expose the administration to accusations of corporate welfare for America’s aerospace national champion. EADS was prepared to invest in an American factory to build the tankers and saw the contract as a foothold in the biggest defence market. The importance of the tanker deal and the A400M was that together they would help make EADS a more balanced aerospace company, less reliant on the performance of its Airbus subsidiary in the very cyclical civil aviation market"

Obama criticized for Mexico, Brazil sanctions

Reuters

• Comment: "For the sake of American workers and farmers, we can't allow a pattern to emerge in which Washington's inaction on trade puts jobs at risk," Murphy said."

Don't have yuan for the road

CHINAdaily

• Comment: "though many Americans believe their economy, particularly US manufacturers, would benefit if the yuan is revaluated against the dollar, the gains from such an adjustment would be enjoyed mainly by non-US economies. This is because China imports very few products that US manufacturers make. A stronger yuan would only force American consumers to pay more for Chinese imports or buy them from China's competitors such as Vietnam."

Lawmakers Look to Trade for Boost to Haiti's Recovery (CQPolitics.com)

Yahoo! News

• Comment: "In testimony to the committee, Edward Gresser, director of the project on trade and global markets at the Democratic Leadership Council, noted that the existing Haiti trade preference program helped boost imports into the United States from Haiti to more than $500 million in 2009 and that tariff benefits and assistance to repair Haiti's badly damaged ports will be key to its recovery. "This industry appears to remain viable, and can be a driver of Haiti's recovery, as the garment factories, most new and often built to international standards, seem to have survived relatively well," Gresser said in his testimony."

China Embraces U.S. Treasuries, Wary About Buying More Gold

Moneynews

• Comment: "The U.S. Treasury market is the world's largest government bond market. Our foreign exchange reserves are huge, so you can imagine that the U.S. Treasury market is an important one to us," Yi Gang, head of the State Administration of Foreign Exchange (SAFE), told a news conference.The exact composition of China's reserves, the world's largest, is a state secret and the subject of intense scrutiny by global investors aware that, with such large sums at stake, even marginal portfolio shifts have the potential to move markets."

Governor Rendell: High-tech Manufacturer Moving to PA, Creating 53 Jobs

Forbes.com

• Comment: "Voltaix LLC is moving its specialty gas and chemical production operations to Upper Mt. Bethel Township, and will construct a production plant, warehouse and an office building at the Portland Industrial Park as part of a $22 million project."

Deal in WTO Doha round doubtful this year: Kirk

Reuters via Yahoo!

• Comment: "Last year leaders of the Group of 20 rich and emerging countries set a goal of finishing the Doha round in 2010.Asked if he thought that target was still achievable, Kirk said: "Well, considering that we have tried and failed three successive years, if past is prologue I don't know if I would put too much stock in it."He added the outlook could change if "advanced developing economies such as Brazil, China, India and South Africa come to the table" with better offers.The Doha round was launched in the capital city of Qatar in late 2001 with the goal of helping countries prosper through trade. However, negotiators have missed every deadline set by themselves or political leaders for finishing the round."

Brazil Threatens Retaliation in Dispute on Cotton Subsidies

New York Times

• Comment: "The Brazilian government published on Monday a list of American goods subject to import tariffs that will go into effect in 30 days, unless the governments can reach an accord by then.The World Trade Organization gave Brazil the go-ahead last year to impose sanctions on American imports after the body ruled that Washington spent too much subsidizing cotton farmers and on an export credit guarantee program."

Rep. Levin known as trade critic, but his record on the issue is more complicated

The Hill

• Comment: "Levin (D-Mich.), who was named interim chairman of the Ways and Means Committee after Rep. Charlie Rangel (D-N.Y.) stepped down under an ethics investigation, has been a leader in the Democratic Caucus on trade for years.He’s expressed skepticism of pending agreements with Colombia, Panama and South Korea that were negotiated by the Bush administration, leading some to think those deals are unlikely to be dislodged. But in 2000, Levin voted for granting China more favorable trade terms, which ushered that country into the global trading system and the World Trade Organization."

China Promises to End Currency Manipulation: Murphy Asks When?

Congressman Tim Murphy

• Comment: “Despite promises to end undervaluing its currency, China has yet to take any action,” said Congressman Tim Murphy. “As China continues its unfair policies, American workers suffer. There are 15 million unemployed Americans, with tens of thousands workers losing their jobs every month. We can no longer hold out for more empty promises from China as its government continues to manipulate the market and creates and unfair trade advantage over American manufacturers."

"Buy American" Proposal Puts a Texas Windfarm in Jeopardy

Reuters

• Comment: "Speculation has been swirling for a few months now that legislation would be passed putting the kibosh on the big 600MW Texas wind farm being developed by Shenyang Group (which A-Power has majority ownership of) and a few US based companies such as US Renewable Energy and Cielo Wind."

When economy turns, some jobs won't return

Charleston Post and Courier

China faces new pressure to let currency rise, gives signs it may allow yuan appreciation

Stockhouse Canada

• Comment: "Even if China starts to appreciate, the possibility is it will be very slow and gradual, without an immediate impact on trade," said Nicholas Consonery, an analyst in Washington for Eurasia Group, a consulting firm.On Friday, Premier Wen Jiabao said in a speech to China's legislature that the yuan will be kept "basically stable" at an "appropriate and balanced" level this year, though he gave no explanation of what that would mean."

Jobs outlook may be too optimistic: SF Fed study

Washington Post

• Comment: "Companies' ability to keep output steady, even as they slashed jobs, meant the unemployment rate rose twice as fast as predicted by the historical relationship between gross domestic product and unemployment, known as Okun's law, the economists found. U.S. joblessness touched a high of 10.1 percent last year."Most forecasters assume that the economy will return to its historical path this year, following Okun's two-to-one ratio of changes in GDP and changes in unemployment," Daly and Hobijn wrote in the San Francisco Fed's latest Economic Letter. "Under this scenario, unemployment would begin to edge down this year as the economy recovers and gains momentum."

For Auto Towns, Emissary Is Ambassador of Hope

New York Times

• Comment: "In the weeks between Barack Obama’s election and his inauguration, General Motors closed the last big factory in Moraine, a four-million-square-foot plant that churned out S.U.V.’s. The 4,200 men and women who had worked there before the recession — representing nearly 2 percent of the work force in Moraine and the surrounding communities — lost their jobs and their wages, which were north of $20 an hour.The president never sought to reopen the factory, even after the federal government became controlling shareholder in G.M. during the auto bailout. What he has done instead is try to ease some of the pain by sending an ambassador as a salve for the community’s wounds."

China’s Bank Chief Says Currency Is Unlikely to Rise

New York Times

• Comment: "He called China’s practice of pegging the renminbi to the dollar a “special foreign exchange mechanism” made to respond to the world financial crisis. Such mechanisms will be abandoned “sooner or later,” he said, but “we must be very cautious and discreet in choosing the timing.”China had allowed its currency to slowly appreciate against the dollar until late 2008, when world economies sagged under the weight of the United States banking and securities collapse. Most economists say the Beijing government acted to maintain the price advantage of Chinese manufactured goods, a linchpin of the Chinese economy, at a time when exports were drying up."

Trading Away Productivity

New York Times

• Comment: "FOR a quarter-century, American economic policy has assumed that the keys to durable national prosperity are deregulation, free trade and a swift transition to a post-industrial, services-dominated future. Such policies, advocates say, drive innovation, which leads to enormous labor productivity and wage gains — more than enough, supposedly, to make up for the labor disruptions that accompany free trade and de-industrialization."

Exports, Not Consumers, Propel U.S. Recovery

BusinessWeek

• Comment: "Caterpillar, the world’s largest maker of bulldozers and excavators, said Feb. 23 that its dealers reported a 1 percent increase in Asia/Pacific machinery sales for the three months through January from the year-earlier period. The increase is the first since November 2008 and compares with a 40 percent drop in North America, according to data from the Peoria, Illinois, company. The strength in manufacturing is leading to some hiring. Factory payrolls increased 1,000 last month after rising 20,000 in January, according to the Labor Department. Employers added workers for a second straight month, the first back-to-back gain since 2006."

China Signals Defiance on U.S. Relations

Wall Street Journal

• Comment: "China gave little hope that it would accommodate Washington on Iran and other thorny foreign-policy issues, despite the first real sign of flexibility in years over its exchange rate, which has been a growing source of friction with the U.S."

FM rejects accusations of China's

People's Daily Online

• Comment: "We hope the world will appreciate China's uniqueness and real national circumstances and abandon their colored spectacles, or stereotyped perceptions about China, particularly the psychological bias against China," Yang said at a press conference on the sidelines of the annual session of the country's top legislature"

China unlikely to let yuan rise soon

Economictimes

• Comment: "At a Saturday news conference, the central bank head, Zhou Xiaochuan, said China should be “very cautious” about revaluing its currency, also known as the yuan, as long as major economies remained mired in slow growth. He called China’s practice of pegging the renminbi to the dollar a “special foreign exchange mechanism” made to respond to the world financial crisis. Such mechanisms will be abandoned “sooner or later,” he said, but “we must be very cautious and discreet in choosing the timing.”

China's influence creeps into Arizona solar

Philadelphia Business Journal

UPDATE 1-Dollar still reigns supreme -China c.bank governor

FinanzNachrichten.de

• Comment: 'The U.S. dollar is still an extremely important currency, playing a key role in international trade, cross-border capital flows, direct investment as well as in determining whether we can smoothly overcome the global financial crisis smoothly,' he said.China, which has about two-thirds of its $2.4 trillion of foreign exchange reserves invested in dollar-denominated assets, has long said that it hopes the U.S. currency remains strong to shore up the value of its holdings.But Zhou said China's concerns were broader.'Asset value is just one perspective for viewing this issue, and of course, we continue to pay attention to this aspect,' he said."

Jobs: Short-term hope, long-term despair

CNN Money

• Comment: "Of the 8.8 million who have been unemployed for more than 3-1/2 months, there are 3.5 million more now than there were at this point last year. And for this group, the job market is looking grimmer by the day. According to the Labor Department, a stunning 58.9% of jobless Americans have now been unemployed for more than 15 weeks -- an all-time high."

China-made toys cause vomiting in school

China Post

• Comment: "Seventeen primary school pupils taken to a hospital in Singapore a month ago for vomiting and diarrhea were not poisoned by food, but a toy they had bought at a school fair. They had played with it shortly before they used their hands to eat snacks at a class party. The culprit was phthalates - substances added to plastics to increase their flexibility. Traces were found on the China-made plastic toy, and had rubbed off on the children's hands."

China calls U.S. duties on paper, salts unfair

Inside Fidelity

• Comment: "The U.S. Commerce Department on Tuesday hit Chinese coated paper companies with countervailing duties ranging from 3.92 to 12.83 percent to offset government subsidies, and in a separate action, levied Chinese companies that produce or export potassium phosphate salts with a preliminary duty of 109.11 percent. "Frequent" countervailing probes by the United States into Chinese products have "unfairly restricted normal exports," Chinese Commerce Ministry spokesman Yao Jian said in a statement seen on the ministry website."

Has your paycheck taken a hit? You're not alone

Chicago Sun-Times

• Comment: "Last year, wages in Cook County shrank 1.2 percent from midyear 2008, according to the latest midyear figures from the U.S. Bureau of Labor Statistics. That's the first decline in pay here since the government began compiling such data in 2002. Only a few types of workers saw pay gains: • State and local government workers. • Educators. • Health care workers. • And lawyers, accountants and others in "professional services."

Where are the jobs?

Erie Times-News

China's Top Import Commodities in December 2009

Hong Kong Trade Development Council

China's Top Export Commodities in December 2009

Hong Kong Trade Development Council

New ghost towns: Industrial communities teeter on the edge

USA Today

• Comment: "Ravenswood, with 4,000 people and one big factory, is like many towns in the USA where things still are made: caught in a winter between recession and recovery, hoping the latter will arrive before the former kills the last decent blue-collar job. If the rest of the aluminum works closed, "would this become a ghost town?" muses Jim Frazier, principal of the Henry J. Kaiser Elementary School.Whether it's textiles in the Carolinas, paper in New England or steel in the Midwest, most industrial cities and mill towns "are on pins and needles," says Donald Schunk, an economist at Coastal Carolina University. "Day to day, week to week, any manufacturing facility seems vulnerable. People don't know if they'll be there."

Market Defies Fear of Real Estate Bubble in China

New York Times

• Comment: "Everyone agrees China is in the middle of a spectacular real estate boom. The question is whether it is in the middle of a rapidly growing real estate bubble.When other recent booms collapsed — in the United States, for instance — they depressed entire economies. In China’s case, a bursting bubble could affect much of the world. China is the fastest-growing large economy and, so far, a main engine pulling the world out of recession."

House passes $15 billion jobs bill

Washington Post

• Comment: "The House voted 217 to 201 to approve a $15 billion measure that would give tax breaks to companies for hiring new employees. Six Republicans joined the vast majority of Democrats in supporting the bill, which also includes a one-year reauthorization of the law governing federal highway funding, as well as an expansion of the Build America Bonds program and a provision allowing companies to write off equipment purchases.More than 30 Democrats voted against the measure. Liberals complained that it is too small and too focused on tax cuts rather than on spending."

Senators seek to block stimulus money for overseas

Associated Press

• Comment: "We can't jump-start our economy and pull ourselves out of this recession if we are putting Chinese workers ahead of American workers," New York Sen. Chuck Schumer said at a news conference Wednesday. On Tuesday, Schumer and three other senators wrote to Treasury Secretary Timothy Geithner to request a moratorium on the Recovery Act program. They asked that the moratorium remain in place until they can pass legislation mandating stimulus aid flow only to projects which preserve and create U.S. jobs."

Yuan Options Most Expensive as China Pledges No Rise (Update1)

BusinessWeek

• Comment: "Premier Wen Jiabao today told lawmakers at an annual meeting the government will promote the yuan’s usage abroad and aims to manage inflation expectations, a goal that may be aided by a stronger currency. While President Barack Obama has urged China to let the yuan climb to aid U.S. manufacturers, Chinese exporters say a gain of more than 2 percent may wipe out profits."

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