GHY Tradelines

(EU Observer – Lisbeth Kirk)

Special treatment of culture “makes sense,” European Commission president Jose Manuel Barroso has said in relation to upcoming EU-US trade talks.

Speaking at the European Business Summit in Brussels on Thursday (16 May), he noted that “cultural diversity” has a special mention in the EU treaties, allowing member states to treat related products – such as books, films and music – differently to other items in the internal market. “Having special quotas and cultural subsidies is accepted in Europe and the European Commission wants to keep it,” he said. Read more here.
 

(Deutsche Welle)

China has urged the EU to stop raising new trade barriers or face consequences. This comes in response to EU punitive tariffs on Chinese solar exports and EU efforts to launch a probe into the country’s telecom products.

Attempts by the European Union to raise hurdles for Chinese exports to the EU would meet “assertive” measures to defend China’s lawful interests and rights, Shen Danyang, a spokesman for the Ministry of Commerce, told a regular news conference Thursday.

“Any consequences caused must be borne by the party which provoked the friction,” he added, referring to recently announced plans by the European Executive Commission to shield the 27-nation bloc from Chinese price dumping on certain goods. Read more here.
 

(Ethan Billy – Reuters)

The European Commission said on Wednesday it was ready to launch an investigation into anti-competitive behaviour by Chinese producers of mobile telecommunications equipment, opening a new front in a trade offensive against China. […]

The EU currently has 31 ongoing trade-related investigations, 18 of them involving China. The largest to date is that into 21 billion euros ($27.25 billion) of imports from China of solar panels, cells and wafers, for which it is proposing punitive duties.

The proposed telecoms investigation would mark a new twist in the EU’s trade defence against China because it would be launched by the European Commission itself and not in response to a complaint by industry. Read more here.
 

(Tim Fernholz – Quartz)

UK prime minister David Cameron really thinks a free trade deal between the European Union and the United States is a good idea, judging by his article (paywall) this morning on his agenda for a summit of the world’s eight largest economies next month:

Trade makes the cake bigger so everyone can benefit. Take the free trade area between Europe and the U.S. on which we hope to launch negotiations when President Obama is in Northern Ireland for the G-8 next month. This deal could add as much as £10 billion to the British economy and £63 billion ($97 billion) to U.S. GDP. But the rest of the world would benefit too, with gains that could generate €100 billion ($132 billion) world-wide.

However, Cameron also thinks that UK voters should vote on whether or not to leave the European Union in 2017 (assuming he wins an election in 2015). Cameron’s Conservative party has long been skeptical of the European common market and the rules drafted by the European Parliament in Brussels. The multi-year currency car crash that is the euro crisis has not exactly engendered optimism about the project. Today, a plurality of UK citizens would vote to leave Europe’s common market. Read more here.
 

(Huffington Post)

President Barack Obama and British Prime Minister David Cameron on Monday pledged to pursue a broad trade agreement between the U.S. and European Union, amid growing domestic unrest with the Obama administration’s plans to include new political powers for corporations in the deal.

Negotiations have not formally begun, but a series of meetings between U.S. and EU officials have established some ground rules and the preliminary scope of the talks. Since tariffs are already low or nonexistent, the agreement will focus on regulatory issues. That emphasis has concerned food safety advocates, environmental activists and public health experts, who fear a deal may roll back important standards.

Obama and Cameron were vague on Monday, while celebrating the potential for a trade pact to create jobs. “Our extensive trade with the U.K. is central to our broader transatlantic economic relationship, which supports more than 13 million jobs,” Obama said at a press conference Monday. “I believe we’ve got a real opportunity to cut tariffs, open markets, create jobs, and make all of our economies even more competitive.” Read more here.
 

(AFP)

European culture ministers from Germany, France and 12 other member nations have called for the audiovisual sector to be exempted from negotiations for an EU-U.S. free trade deal. The French initiative emerged on Tuesday, the day after British Prime Minister David Cameron, on a visit to Washington, said that all subjects and products should be up for discussion in the coming negotiations on the proposed free trade area.

Speaking at the White House after talks with U.S. President Barack Obama, Cameron said on Monday there is a “real chance” that the negotiations could be launched in earnest by next month’s Group of Eight summit in Northern Ireland. However, he added that such talks on the ambitious Transatlantic Trade and Investment Partnership have to cover all subjects. “To realize the huge benefits this deal could bring would take ambition and political will. That means everything on the table, even the difficult issues and no exceptions,” he said. Read more here.
 

(Toboc.com)

China, arguably the fastest growing economy in the world, and one of European Union’s biggest trading partners, isn’t looking good to get that elusive Free Trade Deal with the EU anytime soon.

The EU, a global trading behemoth, is open to establishing free trade deals with the United States and Japan but feels that a planned investment accord is the most sensible next step when dealing with China. As quoted by an unnamed EU official, the Free Trade Agreement (FTA) could present itself as the logical next step in this evolving relationship.

EU is China’s largest market in terms of sales volume and revenue generated and a Free Trade Agreement (FTA) would obviously help the Chinese cause. Last month, when EU foreign affairs head Catherine Ashton visited China, the FTA issue was the prominent item on the table next to the spicy Shezwan Rice and Peking duck. EU’s current stand holds on the fact that a FTA with the United States at this point will have a kickback effect that will positively influence EU’s trading relations with China too. Read more here.
 

(Julian Beltrame – CP)

The Canada-European Union free trade talks are nearing an end with agriculture issues the last major stumbling block to an agreement both sides say will boost economic growth, the EU ambassador Matthias Brinkmann said Thursday.

In a free-wheeling discussion with Canadian reporters, Brinkmann suggested that most other issues in the four-year talks have been resolved or are close to being resolved, and that two specific sticking points — how much Canadian beef to Europe and how much European cheese to Canada — is keeping the sides from a deal.

“I think we have the landing zones identified for all sectors … but like in most negotiations it’s agriculture which is the most difficult one,” he said. Read more here.
 

(Steven Chase – Globe & Mail)

Canada’s Natural Resources Minister is raising the prospect of a trade fight with the European Union over its proposal to label oil-sands crude as dirty even as both sides try to seal a major deal to liberalize two-way.

In Brussels on Wednesday, Natural Resources Minister Joe Oliver said Ottawa would consider launching a complaint with the World Trade Organization, the global referee for commercial disputes, if the EU proceeds with a fuel-quality directive that singles out crude from Canada’s oil sands as the most harmful to the planet’s climate. The directive would effectively slap an import tax on oil-sands crude because refiners who use it would face extra costs. EU refiners are required to cut carbon content in fuels by 6 per cent or pay a penalty.

Ottawa fears the directive would hurt Canada’s ability to open new markets for its oil and depress prices for North American crude. “This fuel-quality directive is discriminatory towards Canadian oil and not supported by scientific facts,” Mr. Oliver said. Read more here.
 

(Reuters)

Canada is close to finalizing a long-delayed free-trade deal with the European Union but will not set a timetable for reaching an agreement, even though the EU is set to start talks with the United States, a top official said on Monday. [...]

“Our negotiators … (are) bridging the very small remaining handful of issues. These are difficult discussions but our negotiators are finding creative ways of bridging the outstanding gaps,” said Canadian Trade Minister Ed Fast. Read more here.
 

(The Star)

Canada has lost an appeal at the World Trade Organization in a landmark case over incentives for electricity producers, the European Union said on Monday, ahead of the official publication of the appeal decision.

Japan and the European Union brought the case over a scheme intended to promote green energy in the province of Ontario.

They said the incentives were illegal because they discriminated against foreign firms, a complaint that was upheld by a WTO adjudication panel in December 2012.
 

(Marietje Schaake – EurActiv)

With the eurozone in crisis, a downward spiralling economy, rising unemployment taking centre stage throughout the EU, one word has created a positive buzz in Brussels lately: TTIP (pronounced: Tee-TIP). From Commission officials and trade MEPs to business and consumer rights organisations, the prospect of reaching a broad Transatlantic Trade and Investment Partnership has brought much needed energy and excitement to Washington and Brussels.

It is not the first time the world’s largest trading blocs have tried to break down remaining barriers in the vast amounts of trade and investment crossing the Atlantic. This time the momentum seems right and stakes are high. Political capital has been invested by President Barack Obama and EU leaders alike. Besides the US and EU economies languishing for jobs and growth, the window of opportunity to jointly set standards for future economies is closing rapidly. Emerging trade blocs are evolving into powerhouses wishing to play increasingly active and competitive roles on the world stage. Read more here.
 

(Michael Geist – The Star)

While the need for business insight as part of trade talks is understandable, the two-tier approach raises serious concerns about the lack of transparency.

As the future of the proposed Canada – European Union Trade Agreement becomes increasingly uncertain – the EU has been unwilling to compromise on the remaining contentious issues leaving the Canadian government with a deal that offers limited benefits and significant costs – the Trans-Pacific Partnership Agreement (TPP) is likely to emerge as the government’s new top trade priority.

The TPP has rapidly become of the world’s most significant trade negotiations, with participants that include the United States, Australia, Mexico, Malaysia, New Zealand, Vietnam, Japan, and Canada. There is a veil of secrecy associated with the TPP, however, as participants are required to sign a confidentiality agreement as a condition of entry into the talks. Despite those efforts, there have been occasional leaks of draft text that indicate the deal could require major changes to Canadian rules on investment, intellectual property, cultural protection, procurement, and agriculture. Read more here.
 

(Dean Baker — Aljazeera)

The US-EU free trade pact and TPP are about securing regulatory gains for major corporate interests, writes Baker.

In polite circles in the United States, support for free trade is a bit like proper bathing habits: It is taken for granted. Only the hopelessly crude and unwashed would not support free trade.

There is some ground for this attitude. Certainly, the US has benefited enormously by being able to buy a wide range of items at lower cost from other countries. However, this does not mean that most people in the country have always benefited from every opening to greater trade.

And it certainly does not mean that the country will benefit from everything that those in power label as “free trade”. That is the story we are seeing now as the Obama administration is pursuing two major “free trade” agreements that in fact have very little to do with free trade and are likely to hurt those without the money and power to be part of the game. Read more here.
 

(The Economist)

An historic trade pact between America and Europe needs saving

In an age of small-bore politics, America and the European Union have a chance to achieve something large: a transatlantic pact that would, at a stroke, liberalise a third of global trade. At a time when emerging powers are closing fast on a fretful West, a free-trade area covering America and the EU would offer something more. Done right, it could anchor a transatlantic economic model favouring openness, free markets, free peoples and the rule of law over the closed, managed visions of state capitalism.

Right now, the pact is in trouble, beset by small-mindedness and mutual suspicion. This is madness. A free-trade pact has never had such support in the chancelleries of Europe, as well as in the West Wing of the White House. It is backed by compelling logic. Yet supporters also know that time is desperately short: this political window may close in just 18 months, says a European official at the heart of the process. This must be done swiftly, on “one tank of gas”, says a senior American. Read more here.
 

(STR Trade Report)

Effective May 1, the European Union will significantly increase the additional tariffs it levies on certain imports from the United States in response to the continuing distribution of antidumping and countervailing duty revenues to U.S. producers. Women’s denim trousers, which had been dropped from the EU retaliation list several years ago, will be hit with a 26% additional tariff, bringing the total import duty for the period May 1, 2013, through April 30, 2014, to 38%. Additional tariffs on frozen sweet corn, crane trucks, and metal eyewear frames and mountings, which had been set at 6% for the past year, will also be increased to 26%.

In an effort to further discourage unfair trade practices, the Continued Dumping and Subsidy Offset Act, or Byrd Amendment, allowed the distribution of AD/CV duty revenues to affected domestic producers for qualified expenses. Congress repealed the law in 2006 in response to an adverse World Trade Organization decision but specified that AD/CV duties collected on entries made until Oct. 1, 2007, could still be distributed, a process that remains ongoing due to the retrospective nature of the United States’ AD/CV duty system.

The additional tariffs the EU imposes are revised annually in correlation with the amount of AD/CV duty revenues distributed the previous year. U.S. Customs and Border Protection officials say that while the total amount of money available for distribution will decline over time, the specific amounts available from year to year may rise or fall depending on the total amount of AD/CV duties collected, which itself can be affected by a number of factors. For example, the conclusion of litigation affecting a large volume of entries of goods subject to AD or CV duties could result in the liquidation of those entries and therefore the release of a significant sum of duty revenues for distribution. Or, CBP may have been successful in its efforts to recover AD/CV duties that had previously gone uncollected for some reason, which sometimes total in the millions or even tens of millions of dollars.

Distributions of AD/CV duties collected on imports from the 27 EU member states apparently increased from $4.44 million in FY 2011 to $84.4 million in FY 2012, thus prompting the rise in retaliatory tariffs. It is not clear what accounted for this increase or whether it may be repeated in the future, considering that the retaliation amount had previously declined for several years.

ST&R’s U.S. and EU offices are working to help affected companies formulate both short-term tactical and longer-term strategic options. For more information, contact ST&R managing partner Tom Travis at 305-894-1001 or or via email.
 

(Associated Press)

European Union lawmakers have voted in favour of starting talks on a wide-ranging free trade agreement with the United States.

A parliamentary committee on Thursday voted 23-5 to endorse the negotiation mandate for the European Commission, the executive arm of the 27-country bloc.

Lawmakers also voted an amendment calling for the exclusion of cultural services. The vote is non-binding at this stage but any agreement ultimately needs Parliament’s approval. Read more here.
 

(Carla A. Hills – NYT)

The opening of global markets — starting in 1947 with the first round of trade negotiations among 23 nations and the creation of the General Agreement on Tariffs and Trade (GATT), through the creation of the World Trade Organization in 1995 — caused international trade to explode and standards of living for nations rich and poor to soar.

Economic studies show that the opening of global markets since the end of World War II has added about $9,000 of additional wealth for the average American household. Developing nations have also gained from global trade. On average, poor countries that opened their markets to trade and investment have grown more than three times faster than those that kept their markets closed. No country has prospered by sealing itself off from global economy. Read more here.
 

(Bill Curry – Globe & Mail)

Free trade negations between Canada and the European Union are nearly done and a deal could be announced within a “few weeks,” according to a senior European official who is meeting with top Canadian officials in Ottawa.

Christian Leffler, managing director of the Americas for the European Union’s External Action Service, is the top official responsible for the EU’s relationship with the Americas.

In an interview with The Globe and Mail, Mr. Leffler refuted speculation that momentum is lagging in the talks after both sides failed to reach an agreement by a stated deadline of the end of 2012. Read more here.
 

(Dan Ovsey – Financial Post)

For the longest time, Eric Beauregard saw exporting to Europe as an attractive but not-so-urgent opportunity. The chief executive of Montreal-based AV&R Vision & Robotics — a maker of advanced automated systems for the aerospace industry  and others — was content to limit his export activity to the U.S. where demand for automation was high and buyers were plentiful. All that changed in September 2008.

“It was always a place we were looking to go but we thought you not only have the distance but the time zone and culture differences,” he says. “We thought that until we were really ready to go, we wouldn’t cross the sea and would be satisfied with Canada and the United States.” Read more here.