The world merchandise trade volume is projected to pick up gradually and increase by 2.6% in 2024 and 3.3% in 2025 after falling 1.2% in 2023 due to the lingering effects of high energy prices and inflation. World Trade Organisation (WTO) economists said in a new forecast

WTO: Global goods trade to rebound slowly in 2024

Global trade faces turbulent waters as two critical shipping routes grapple with unprecedented challenges. In the red sea, a series of attacks on vessels has disrupted traffic through the suez canal, while on the other side of the world, a severe drought at the panama canal has slowed maritime trade to a crawl.

Global trade plagued by Red Sea attacks & Panama canal drought

The world trade organization has unveiled a $50 million fund aimed at propelling female entrepreneurs in developing countries into the forefront of global trade. Led by director general Ngozi Okonjo-Iweala, this initiative addresses a critical disparity: while women represent half of the world's population, their contribution to global GDP stands at only 37%. Watch to know more!

WTO launches $50 million fund to empower women entrepreneurs

WION's Business Desk brings you this daily round up of global stories from the world of business and economy.&nbsp;

RBI keeps interest rates steady at 6.5pc, revises GDP growth outlook for 2023-24

The Reserve Bank of India (RBI) has opted to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.5 per cent. This decision marks a continuation of the RBI's approach over the past year, where the repo rate has remained at 6.5 per cent since the last increase in February 2023.&nbsp;

<a href="https://www.wionews.com/business-economy/rbi-keeps-interest-rates-steady-at-65pc-revises-gdp-growth-outlook-for-2023-24-688105">Read more&nbsp;</a>

Nvidia's soaring value nears Amazon amid AI frenzy: Report

Nvidia, the AI chipmaker, is on the verge of surpassing Amazon in market value, fuelled by Wall Street's fervour for artificial intelligence.&nbsp;

<a href="https://www.wionews.com/business-economy/nvidias-soaring-value-nears-amazon-in-ai-frenzy-report-688103">Read more&nbsp;</a>

China faces its biggest deflation threat since 2009 as consumer prices plummet

China encountered its deepest deflationary threat since 2009 as consumer prices witnessed a severe decline in January, highlighting the persistent challenges for the world's second-largest economy in its struggle for recovery.

<a href="https://www.wionews.com/business-economy/china-faces-deepest-deflation-risks-since-2009-as-consumer-prices-plummet-688110">Read more&nbsp;</a>

Mexico surpasses China as top source of US imports amid global economic shifts

In a significant economic shift, Mexico has emerged as the leading source of goods imported to the United States, overtaking China for the first time in more than two decades.

<a href="here https://www.wionews.com/business-economy/mexico-surpasses-china-as-top-source-of-us-imports-amid-global-economic-shifts-688161">Read more</a>

Uncertainty looms over US treasury market as Fed signals caution

In a twist for the fixed-income market, uncertainty is making a comeback after the Federal Reserve's recent statements and robust economic data threw a curveball into expectations.

<a href="here https://www.wionews.com/business-economy/uncertainty-looms-over-us-treasury-market-as-fed-signals-caution-688134">Read more</a>

UAE's ADIA unveils ambitious $4-5bn investment plan in India via Gujarat's finance hub

The Abu Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the UAE, is preparing to launch a substantial $4-5 billion fund aimed at investing in India through the tax-neutral finance hub in Gujarat, known as Gujarat International Finance Tec-City (GIFT City).

<a href="here https://www.wionews.com/business-economy/uaes-adia-unveils-ambitious-4-5bn-investment-plan-in-india-via-gujarats-finance-hub-688141">Read more</a>

Snap faces investor backlash as ad revenue stumbles against tech giants Meta, Alphabet

In a staggering downturn, Snap, the parent company of Snapchat, witnessed a sharp decline of over 32 per cent in its shares on Wednesday, following disappointing fourth-quarter revenue results that fell short of Wall Street expectations.

<a href="https://www.wionews.com/business-economy/snap-faces-investor-backlash-as-ad-revenue-stumbles-against-tech-giants-meta-alphabet-688153">Read more</a>

German property market faces bleak outlook as TAG Immobilen warns of 30pc price decline

In a stark warning, TAG Immobilen, one of Germany's largest landlords, has forecasted that home prices in the country could plunge as much as 30 per cent below their 2022 peak, portraying a more pessimistic outlook than its counterparts.

<a href="here https://www.wionews.com/business-economy/german-property-market-faces-bleak-outlook-as-tag-immobilen-warns-of-30pc-price-decline-688156">Read more</a>

WION's Business Desk brings you this daily round up of global stories from the world of business and economy. RBI keeps interest rates steady at 6.5pc, revises GDP growth outlook for 2023-24 The Reserve Bank of India (RBI) has opted to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.

WION's Business Desk brings you this daily round up of global stories from the world of business and economy. RBI keeps interest rates steady at 6.5pc, revises GDP growth outlook for 2023-24 The Reserve Bank of India (RBI) has opted to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.5 per cent. This decision marks a continuation of the RBI's approach over the past year, where the repo rate has remained at 6.5 per cent since the last increase in February 2023. Read more Nvidia's soaring value nears Amazon amid AI frenzy: Report Nvidia, the AI chipmaker, is on the verge of surpassing Amazon in market value, fuelled by Wall Street's fervour for artificial intelligence. Read more China faces its biggest deflation threat since 2009 as consumer prices plummet China encountered its deepest deflationary threat since 2009 as consumer prices witnessed a severe decline in January, highlighting the persistent challenges for the world's second-largest economy in its struggle for recovery. Read more Mexico surpasses China as top source of US imports amid global economic shifts In a significant economic shift, Mexico has emerged as the leading source of goods imported to the United States, overtaking China for the first time in more than two decades. Read more Uncertainty looms over US treasury market as Fed signals caution In a twist for the fixed-income market, uncertainty is making a comeback after the Federal Reserve's recent statements and robust economic data threw a curveball into expectations. Read more UAE's ADIA unveils ambitious $4-5bn investment plan in India via Gujarat's finance hub The Abu Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the UAE, is preparing to launch a substantial $4-5 billion fund aimed at investing in India through the tax-neutral finance hub in Gujarat, known as Gujarat International Finance Tec-City (GIFT City). Read more Snap faces investor backlash as ad revenue stumbles against tech giants Meta, Alphabet In a staggering downturn, Snap, the parent company of Snapchat, witnessed a sharp decline of over 32 per cent in its shares on Wednesday, following disappointing fourth-quarter revenue results that fell short of Wall Street expectations. Read more German property market faces bleak outlook as TAG Immobilen warns of 30pc price decline In a stark warning, TAG Immobilen, one of Germany's largest landlords, has forecasted that home prices in the country could plunge as much as 30 per cent below their 2022 peak, portraying a more pessimistic outlook than its counterparts. Read more

WION Business Wrap | UAE's investment in India, Nvidia's valuation surge and more

Global markets roundup | Asian markets open in Red. Japan leads losses in Asia.

Global markets roundup | Asian markets open in Red | WION World Business Watch

Asia-Pacific markets started Friday lower, breaking ranks with wall street which mostly advanced on Thursday, amid mixed economic data from across the region. South Korea’s Kospi led the declines while Japanese stocks opened slightly lower. Mainland Chinese stocks and Hong Kong's Hang Seng slid at the open as investors assessed China’s caixin manufacturing purchasing managers’ index for november which showed that the sector expanded.

Asian markets open lower

As India assumes the presidency of the G20, it finds itself at the center of global trade discussions, representing 43 member countries that collectively account for 85% of the global GDP, 75% of world trade, and two-thirds of the global population. This position offers both opportunities and challenges, with India aiming to capitalise on the global stage while addressing the pressing issue of rising food prices in the aftermath of the Russia-Ukraine conflict.

Leveraging India's G20 Presidency

Raymond E. Vickery, Former US Assistant Secretary of Commerce for Trade Development and Senior Associate at the Center for Strategic and International Studies, sees India's G20 presidency as a tremendous opportunity. He emphasises that India can become a beacon of hope in a world grappling with protectionism tendencies, with many Western nations increasingly looking inward. India's commitment to multilateralism in trade can help restore faith in institutions like the World Trade Organization (WTO), which are in dire need of strong leadership.

One notable trend Vickery highlights is "Friendshoring," where supply chain networks focus on countries considered political and economic allies. With many countries having strained relations with China, India's diplomacy can play a crucial role in fostering trade partnerships and strengthening its global trade ties.

Addressing rising food prices

The Russia-Ukraine conflict has triggered a global crisis in the aftermath of rising food prices, disrupting food supply chains and raising concerns about food security and inflation. Vickery points out that India can take the lead in addressing this issue during its G20 presidency.

He highlighted the G20 Technical workshop on climate-resilient agriculture conducted in Hyderabad, where the first item on the agenda was to somehow restore the grain agreement deal between the UN, Turkey, and Russia. This deal is a lifeline for many countries, particularly in Africa. However, with Russia's reluctance to revive the agreement, India can step in to show leadership, leveraging its influence as a leader of the global south.

In addition to reviving critical agreements, Vickery suggests that India can play a pivotal role in promoting sustainable production of grains and leveraging its expertise in information technology to ensure fluidity and transparency in grain markets. India's IT capabilities can contribute to solving logistics challenges and promoting efficient global food distribution.

G20's vision for WTO reforms

The G20 has reaffirmed the importance of a rules-based, transparent multilateral trading system, with the WTO at its core. Ten guiding principles, including promoting sustainable development, strengthening the multilateral trading system, and fostering digital trade initiatives, have been outlined.

Vickery acknowledges that the WTO is currently at a standstill, partly due to a lack of conviction in dispute resolution, with some blame placed on the United States. He emphasises the need for quick resolutions and general respect for trade rules. The G20, in his view, is the ideal platform to push for WTO reforms, promote international trade, and bring consensus among its member nations.

As India takes the reins of the G20, it stands at the crossroads of economic opportunity and the challenge of food price volatility. The world watches eagerly for the path forward in global trade as India seeks to leverage its presidency for the benefit of the global economy and food security.

WATCH WION LIVE HERE

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As India assumes the presidency of the G20, it finds itself at the center of global trade discussions, representing 43 member countries that collectively account for 85% of the global GDP, 75% of world trade, and two-thirds of the global population.

As India assumes the presidency of the G20, it finds itself at the center of global trade discussions, representing 43 member countries that collectively account for 85% of the global GDP, 75% of world trade, and two-thirds of the global population. This position offers both opportunities and challenges, with India aiming to capitalise on the global stage while addressing the pressing issue of rising food prices in the aftermath of the Russia-Ukraine conflict. Leveraging India's G20 Presidency Raymond E. Vickery, Former US Assistant Secretary of Commerce for Trade Development and Senior Associate at the Center for Strategic and International Studies, sees India's G20 presidency as a tremendous opportunity. He emphasises that India can become a beacon of hope in a world grappling with protectionism tendencies, with many Western nations increasingly looking inward. India's commitment to multilateralism in trade can help restore faith in institutions like the World Trade Organization (WTO), which are in dire need of strong leadership. One notable trend Vickery highlights is "Friendshoring," where supply chain networks focus on countries considered political and economic allies. With many countries having strained relations with China, India's diplomacy can play a crucial role in fostering trade partnerships and strengthening its global trade ties. Addressing rising food prices The Russia-Ukraine conflict has triggered a global crisis in the aftermath of rising food prices, disrupting food supply chains and raising concerns about food security and inflation. Vickery points out that India can take the lead in addressing this issue during its G20 presidency. He highlighted the G20 Technical workshop on climate-resilient agriculture conducted in Hyderabad, where the first item on the agenda was to somehow restore the grain agreement deal between the UN, Turkey, and Russia. This deal is a lifeline for many countries, particularly in Africa. However, with Russia's reluctance to revive the agreement, India can step in to show leadership, leveraging its influence as a leader of the global south. In addition to reviving critical agreements, Vickery suggests that India can play a pivotal role in promoting sustainable production of grains and leveraging its expertise in information technology to ensure fluidity and transparency in grain markets. India's IT capabilities can contribute to solving logistics challenges and promoting efficient global food distribution. G20's vision for WTO reforms The G20 has reaffirmed the importance of a rules-based, transparent multilateral trading system, with the WTO at its core. Ten guiding principles, including promoting sustainable development, strengthening the multilateral trading system, and fostering digital trade initiatives, have been outlined. Vickery acknowledges that the WTO is currently at a standstill, partly due to a lack of conviction in dispute resolution, with some blame placed on the United States. He emphasises the need for quick resolutions and general respect for trade rules. The G20, in his view, is the ideal platform to push for WTO reforms, promote international trade, and bring consensus among its member nations. As India takes the reins of the G20, it stands at the crossroads of economic opportunity and the challenge of food price volatility. The world watches eagerly for the path forward in global trade as India seeks to leverage its presidency for the benefit of the global economy and food security. WATCH WION LIVE HERE

India's G20 Presidency: Leveraging trade opportunities amid global uncertainty

The covid-19 pandemic disrupted global trade as the world was forced into a lockdown but International Traders continue to be frustrated as recovery looks unlikely in global trades slows down after the pandemic yes in fact U.S credit rating agency Fitch has said that global trade is rapidly slowing after a rapid post-pandemic recovery in 2021 and 2022 global trade is expected to expand 1.9 percent this year down sharply from 2022's growth rate of 5.5 percent that's due to tighter monetary policy less stimulus and stalling globalization in fact trade will grow slower than the global economy.

Covid blues: Global trade recovery slows in 2023

The post-pandemic rebound in global trade, which marked a period of recovery over the past two years, is now facing a significant slowdown, as per&nbsp;the latest report by Fitch Ratings.&nbsp;

The agency forecasts a growth rate of only 1.9 percent for international trade this year, a significant drop from the 5.5 percent growth observed in 2022.

Fitch Ratings suggests that the slowdown in trade growth reflects the stalling of globalization, with several factors contributing to this trend. 
&nbsp; 
Additionally, the world economy&nbsp;is projected to grow by 2 percent in 2023, down from 2.7 percent recorded last year.&nbsp;&nbsp;

Factors Influencing the Trade Slowdown&nbsp;

The report highlights several factors that have contributed to the deceleration of global trade.&nbsp;

Firstly, tighter monetary policies and declining fiscal support have played a role in dampening trade activity. Secondly, the resurgence of the services sector, which contributes less to trade than the goods sector, has also impacted overall trade growth.&nbsp;

Moreover, the volume of trade in goods is declining, with gains in services trade only partially offsetting this dip as the tourism and transportation sectors recover.

Supply-chain bottlenecks, which previously hindered trade, have been mostly resolved. Furthermore, the international specialization of services has decreased, accounting for only 22 percent of total trade.

Effects on Industrial Production and Global Economy&nbsp;

The decline in demand for goods has resulted in a rapid cooling of industrial production.&nbsp;

According to the credit rating agency,&nbsp;their forecast of a flattening trade-to-GDP ratio contrasts with the steady rise from the 1990s to the mid-2000s. However, the report also indicates that while some evidence of trade redirection is emerging, there is currently no indication that globalization is reversing completely.&nbsp;

The forecast comes at a time when global trade has faced significant disruptions due to geopolitical events like Russia's invasion of Ukraine.&nbsp;

Additionally, the trade war between the United States and China has escalated, leading to targeted measures against sectors such as chipmakers and high-tech industries.&nbsp;

The post-pandemic rebound in global trade, which marked a period of recovery over the past two years, is now facing a significant slowdown, as per the latest report by Fitch Ratings.

The post-pandemic rebound in global trade, which marked a period of recovery over the past two years, is now facing a significant slowdown, as per the latest report by Fitch Ratings. The agency forecasts a growth rate of only 1.9 percent for international trade this year, a significant drop from the 5.5 percent growth observed in 2022. Fitch Ratings suggests that the slowdown in trade growth reflects the stalling of globalization, with several factors contributing to this trend. Additionally, the world economy is projected to grow by 2 percent in 2023, down from 2.7 percent recorded last year. Factors Influencing the Trade Slowdown The report highlights several factors that have contributed to the deceleration of global trade. Firstly, tighter monetary policies and declining fiscal support have played a role in dampening trade activity. Secondly, the resurgence of the services sector, which contributes less to trade than the goods sector, has also impacted overall trade growth. Moreover, the volume of trade in goods is declining, with gains in services trade only partially offsetting this dip as the tourism and transportation sectors recover. Supply-chain bottlenecks, which previously hindered trade, have been mostly resolved. Furthermore, the international specialization of services has decreased, accounting for only 22 percent of total trade. Effects on Industrial Production and Global Economy The decline in demand for goods has resulted in a rapid cooling of industrial production. According to the credit rating agency, their forecast of a flattening trade-to-GDP ratio contrasts with the steady rise from the 1990s to the mid-2000s. However, the report also indicates that while some evidence of trade redirection is emerging, there is currently no indication that globalization is reversing completely. The forecast comes at a time when global trade has faced significant disruptions due to geopolitical events like Russia's invasion of Ukraine. Additionally, the trade war between the United States and China has escalated, leading to targeted measures against sectors such as chipmakers and high-tech industries.

Global trade recovery hits roadblock as Fitch Ratings signals slowing growth

The world trade is re-globalising. Companies and government are driving this "re-globalisation", where companies are reducing their reliance on a single country while countries are ensuring that key materials are secured if trade splinters into geopolitical blocs.

World trade is 'reglobalising'

Planes, trains, and automobiles carry us and a lot of other things, but ships carry more than 80 per cent of the goods traded globally. So, stay close to the ports if you want to understand the shifts in global trade patterns.&nbsp;

And by the looks of it maritime trade, which bounced back significantly in the post-Covid months, is&nbsp;growing at a slower pace as the war in Ukraine and economic uncertainty begin to bite the world.&nbsp;

According to UNCTAD, the UN trade body, international maritime trade showed an estimated growth of 3.2 per cent&nbsp;and overall shipments of 11 billion tons in 2021, a rise of 7 percentage points compared to a decline of 3.8 per cent in 2020 when the world shut down due to fears over a global spread of the pandemic. Asia remained the world’s leading maritime cargo handling centre in 2021, accounting for a large chunk of exports and imports.&nbsp;

In a recent report, UNCTAD projected global maritime trade growth to fall to 1.4&nbsp;per cent this year and then grow at an annual average of 2.1&nbsp;per cent between 2023 and 2027 -- a sharply slower rate than the previous three-decade average of 3.3 per cent. According to its latest update, global trade should hit a record $32 trillion for 2022, but a slowdown that began in the second half of the year is only expected to worsen in 2023.&nbsp;

Why is global trade losing the spring in its steps? The World Trade Organization (WTO) blames it on multiple shocks that weigh on the global economy. Fears of Covid continue to linger in China, the Ukraine war is making things difficult for Europe and rising prices is forcing Americans to slow their purchases. So, while WTO economists now predict global merchandise trade volumes to grow by 3.5&nbsp;per cent this year, they are cagey about 2023 predicting a much smaller increase.&nbsp;

To better understand 2023, we would want to return to 2021 when the world started re-opening and demand for consumer goods and e-commerce shot up across countries, much of it pent-up from months of closure. The abrupt rise in demand caused a supply-chain crisis, and that takes us back to the ships.&nbsp;

A surge in demand pushed container freight rates in 2021 five times higher than their pre-Covid levels and a longer turn-around time at congested ports – especially in the United States thanks to a paucity of port workers and truckers -- led to a sharp increase in consumer prices. Though container freight rates have fallen from their peak in early 2022, they remain high for energy cargo, according to UNCTAD.&nbsp;

And then came another economic disrupter. The Russian attack on Ukraine shook both the energy and the commodities markets hard. Mid-year, energy prices were up 78&nbsp;per cent year-on-year with natural gas up 250 per cent, according to WTO data. Crude oil prices were up by 36 per cent. Food prices galloped higher as wheat supplies from war-hit Ukraine stopped due to the closure of Black Sea ports. Dry bulk freight rates rose sharply even as the world was beginning to slowly recover from the pandemic’s earlier economic onslaught, as the war also affected the rail route between China and Europe.&nbsp;

In 2021, the railway was a saviour for shippers who had to look for alternatives to move cargo as ports became congested and airlines still weren’t flying at their pre-Covid capacity. According to UNCTAD data, the demand on the China-Europe railway rose 30 per cent to nearly 1.5 million twenty-foot containers. The war also impeded the use of the trans-Siberian route, which was used by China, South Korea and Japan to move goods into Europe.&nbsp;

It was a double whammy of the sorts never experienced before. The world was as unprepared for the trade stoppage as it was for its recovery. And if current underlying assumptions – a global economic slowdown, continuing higher inflation rates, currency shocks, and higher food, and energy prices among others – hold then 2023 could possibly turn out to be worse than anticipated.&nbsp;

For example, import demand is likely to be subdued in Europe as high energy prices due to the war in Ukraine and Russia’s decision to shut down gas supplies will impact household spend even as manufacturing costs rise. High inflation is eating into the American dream of buying homes and cars.&nbsp;

China, still very much the world’s factory, is struggling due to the earlier difficult Covid closures and now sudden uncertain re-opening, as production gets hit at a time when exports are slowing. Exports from China were lower in October 2022, the first decline in shipments since May 2020, thanks to poor overseas demand. The situation might not change very much very fast.&nbsp;

The IMF expects one-third of the global gross domestic product (GDP) to enter contraction. When the global economy slows, trade slows too. The US – the world’s biggest economy -- which expanded by 5.6 per cent in 2021, is expected to grow by less than 1 per cent next year. High inflation and rising interest rates are choking demand and growth.&nbsp;

China, the other big elephant in the room, is expected to grow a tad stronger next year, but these are still early days of post-Covid reopening and a lot will depend on whether China returns to lockdowns if things go out of hand. India – a bright spot in an otherwise gloomy world -- is also expected to slow, as are Gulf economies, which benefited from high oil and gas prices following the pandemic.&nbsp;

With so much happening, the big question on everybody’s mind is whether trade will only slow or end up shrinking if current underlying assumptions give way to surprises, even shocks. All that is bad news for trade and the ships that sail the oceans. So, watch those ships closely!&nbsp;

(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)&nbsp;

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Planes, trains, and automobiles carry us and a lot of other things, but ships carry more than 80 per cent of the goods traded globally. So, stay close to the ports if you want to understand the shifts in global trade patterns.

Planes, trains, and automobiles carry us and a lot of other things, but ships carry more than 80 per cent of the goods traded globally. So, stay close to the ports if you want to understand the shifts in global trade patterns. And by the looks of it maritime trade, which bounced back significantly in the post-Covid months, is growing at a slower pace as the war in Ukraine and economic uncertainty begin to bite the world. According to UNCTAD, the UN trade body, international maritime trade showed an estimated growth of 3.2 per cent and overall shipments of 11 billion tons in 2021, a rise of 7 percentage points compared to a decline of 3.8 per cent in 2020 when the world shut down due to fears over a global spread of the pandemic. Asia remained the world’s leading maritime cargo handling centre in 2021, accounting for a large chunk of exports and imports. In a recent report, UNCTAD projected global maritime trade growth to fall to 1.4 per cent this year and then grow at an annual average of 2.1 per cent between 2023 and 2027 -- a sharply slower rate than the previous three-decade average of 3.3 per cent. According to its latest update, global trade should hit a record $32 trillion for 2022, but a slowdown that began in the second half of the year is only expected to worsen in 2023. Why is global trade losing the spring in its steps? The World Trade Organization (WTO) blames it on multiple shocks that weigh on the global economy. Fears of Covid continue to linger in China, the Ukraine war is making things difficult for Europe and rising prices is forcing Americans to slow their purchases. So, while WTO economists now predict global merchandise trade volumes to grow by 3.5 per cent this year, they are cagey about 2023 predicting a much smaller increase. To better understand 2023, we would want to return to 2021 when the world started re-opening and demand for consumer goods and e-commerce shot up across countries, much of it pent-up from months of closure. The abrupt rise in demand caused a supply-chain crisis, and that takes us back to the ships. A surge in demand pushed container freight rates in 2021 five times higher than their pre-Covid levels and a longer turn-around time at congested ports – especially in the United States thanks to a paucity of port workers and truckers -- led to a sharp increase in consumer prices. Though container freight rates have fallen from their peak in early 2022, they remain high for energy cargo, according to UNCTAD. And then came another economic disrupter. The Russian attack on Ukraine shook both the energy and the commodities markets hard. Mid-year, energy prices were up 78 per cent year-on-year with natural gas up 250 per cent, according to WTO data. Crude oil prices were up by 36 per cent. Food prices galloped higher as wheat supplies from war-hit Ukraine stopped due to the closure of Black Sea ports. Dry bulk freight rates rose sharply even as the world was beginning to slowly recover from the pandemic’s earlier economic onslaught, as the war also affected the rail route between China and Europe. In 2021, the railway was a saviour for shippers who had to look for alternatives to move cargo as ports became congested and airlines still weren’t flying at their pre-Covid capacity. According to UNCTAD data, the demand on the China-Europe railway rose 30 per cent to nearly 1.5 million twenty-foot containers. The war also impeded the use of the trans-Siberian route, which was used by China, South Korea and Japan to move goods into Europe. It was a double whammy of the sorts never experienced before. The world was as unprepared for the trade stoppage as it was for its recovery. And if current underlying assumptions – a global economic slowdown, continuing higher inflation rates, currency shocks, and higher food, and energy prices among others – hold then 2023 could possibly turn out to be worse than anticipated. For example, import demand is likely to be subdued in Europe as high energy prices due to the war in Ukraine and Russia’s decision to shut down gas supplies will impact household spend even as manufacturing costs rise. High inflation is eating into the American dream of buying homes and cars. China, still very much the world’s factory, is struggling due to the earlier difficult Covid closures and now sudden uncertain re-opening, as production gets hit at a time when exports are slowing. Exports from China were lower in October 2022, the first decline in shipments since May 2020, thanks to poor overseas demand. The situation might not change very much very fast. The IMF expects one-third of the global gross domestic product (GDP) to enter contraction. When the global economy slows, trade slows too. The US – the world’s biggest economy -- which expanded by 5.6 per cent in 2021, is expected to grow by less than 1 per cent next year. High inflation and rising interest rates are choking demand and growth. China, the other big elephant in the room, is expected to grow a tad stronger next year, but these are still early days of post-Covid reopening and a lot will depend on whether China returns to lockdowns if things go out of hand. India – a bright spot in an otherwise gloomy world -- is also expected to slow, as are Gulf economies, which benefited from high oil and gas prices following the pandemic. With so much happening, the big question on everybody’s mind is whether trade will only slow or end up shrinking if current underlying assumptions give way to surprises, even shocks. All that is bad news for trade and the ships that sail the oceans. So, watch those ships closely! (Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Watch those ships as global trade growth seen slowing

Taiwan has rejected China's sovereign claims and Taiwan's Chief Trade negotiator said that, any Chinese military attack on Taiwan would have a greater impact on global trade. There would be a worldwide shortage of supply.

'China's attack on Taiwan would hit Global trade,' says Taiwan

Sanctions on Russia are starting to wreak havoc on global trade, with potentially devastating consequences for energy and grain importers while also generating ripple effects across a world still struggling with pandemic-induced supply chain disruptions.

Since Russia's invasion of Ukraine, hundreds of tankers and bulk carriers have been diverted away from the Black Sea, while dozens more have been stranded at ports and at sea unable to unload their valuable cargoes. Russia is a leading exporter of grains and a major supplier of crude oil, metals, wood and plastics&nbsp;all used worldwide in a range of products and by a multitude of industries from steelmakers to car manufacturers.

Also read |<a href="https://www.wionews.com/world/russia-ukraine-war-chinese-broadcaster-censors-call-for-peace-at-paralympic-games-opening-ceremony-459155">&nbsp;Russia-Ukraine war: Chinese broadcaster 'censors' call for peace at Paralympic Games opening ceremony</a>

Only a small handful of Russia's 2,000 cargo and tanker ships have been sanctioned by Western powers, but freezing the assets of the country's biggest banks means the business of importing and exporting from Russia will take a major hit. Intensifying the squeeze are companies from Apple and Nike to major shippers like Maersk abandoning the country, whose extensive trade ties with the West have been all but severed.

This is an earthquake like we've never seen before,&nbsp;said Ami Daniel, a co-founder of Windward, a maritime intelligence firm that advises governments. He added, Companies are going well beyond what's legally required and taking actions based on their own values before their customers even demand it.

One potential escape valve for Russian exports is China, whose fast-growing economy is thirsty for natural resources. But China, perhaps the biggest beneficiary of globalization, so far has shown little appetite to fully back President Vladimir Putin despite abstaining from a U.N. Vote condemning the land grab.

The strains are already being felt at Interunity Management Corp SA, a family-run Greek shipping company whose 60 oil tankers and bulk carriers are operated by 200 Russian and Ukrainian sea captains and officers.

After the invasion, the Russian half of Interunity's workforce wondered how they'd get home after the European Union imposed a flight ban on their country. The Ukrainian half didn't know if they'd have a home to return to.

Also read |&nbsp;A<a href="https://www.wionews.com/world/ahead-of-south-koreas-polls-kim-jong-led-north-holds-2022s-ninth-missile-test-459144">head of South Korea’s polls, Kim Jong-led North holds 2022’s ninth missile test</a>

One Ukrainian senior officer stranded on a tanker in the Gulf of Mexico was so distraught that he demanded to be allowed to disembark months before his contract ended, said George Mangos, one of Interunity's directors.

He told me he wanted to get off at the next port so he could fight for his homeland, Mangos said. Operating a highly sophisticated tanker with a dangerous cargo is stressful even under normal situations, so all you can do is ask people to focus on the job and leave the politics aside. It's hard, but these are very stoic people, and I've been impressed by their dedication.

So far, the war's impact on global trade has been most severe in the Black Sea, where Russian and Ukrainian ports are major hubs for wheat and corn. Traffic has ground to a halt, effectively shutting down the world's second-largest grain exporting region.

Unlike oil production, which can be ramped up quickly elsewhere, boosting grain supplies takes time and the sheer volume that could be diverted as a result of war and sanctions Ukraine accounts for 16% of global corn exports and together with Russia 30% of wheat exports&nbsp;means poorer countries that depend on imports could face major supply shocks.

The question is not whether there will be serious economic effects and critical food shortages in already fragile countries, the question is what Russia will do with that and how the West will react, said Rohini Ralby, a director at I.R. Consilium, a U.S.-based maritime consulting firm.

Among the countries most at risk are Egypt, India and Turkey, all of which rely heavily on Russia for everything from staples used to make flatbread to natural gas and tourism.

Around 78% of Turkey's wheat imports come from Russia and another 9% from Ukraine. Much of those supplies are used in Turkey's food industry, a major exporter itself. India imports about 80% of its oil, much of it from Russia, and metals from Russia to supply the world's fifth-largest automobile industry.

Also read |&nbsp;<a href="https://www.wionews.com/world/russia-ukraine-conflict-at-least-three-plots-to-assassinate-ukrainian-president-zelensky-foiled-say-reports-459114">Russia-Ukraine conflict: At least 3 plots to 'assassinate Ukrainian President Zelensky foiled' in last week</a>

In the U.S., the biggest impact will be felt at the gas pump, where higher prices are expected to add to inflation already running at the fastest rate in four decades. Russia was the third-largest source of oil products sold in the U.S. Last year&nbsp;behind only Mexico and Canada&nbsp;and responsible for 8% of all imports. Russia is also the United States' second-largest supplier of platinum, a metal used to build exhausts for automobiles.

But overall, Russia was only the 20th-largest supplier of goods for the United States in 2019, according to the U.S. Trade data. 
While the Biden administration has held back from a blanket Russian trade embargo or targeting Russia's energy sector, to limit the pain on the West, that's done little to calm markets.

Wheat prices have jumped more than 55% since the week before the invasion. Oil prices, which had been steadily rising since the start of the year due to demand from a recovering global economy, soared past $110 a barrel for the first time since 2013.

And the rates charged to charter giant oil tankers worldwide have jumped as much as 400% as oil traders scramble to secure capacity that become suddenly scarce.

It's not yet clear how economic warfare on Russia will shake out and what other unintended consequences may be in store. While overcompliance with sanctions is a frequent problem, never in the past have restrictions been imposed so swiftly and coordinated so closely among U.S. Allies to target a global power.

The situation alarms Tinglong Dai, a business professor who studies supply chains at Johns Hopkins University. Since the end of the Cold War, the bedrock of global trade has been a separation of geopolitics and business and an assumption that rational decision-making will always prevail, Dai said.

Watch |&nbsp;Gravitas: Assessing the Ukraine War in numbers

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/gravitas-assessing-the-ukraine-war-in-numbers-459090/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

Both of those have been destroyed by Russia, says Dai, adding that a new sort of Iron Curtain" could soon emerge, with Russia and its allies on one side and the West on the other.

It's no longer possible to avoid picking sides, and the consequences of this reconfiguration of global supply chains in terms of more poverty, loss of innovation and job opportunities is something we will all have to pay for, he said.&nbsp;

Sanctions on Russia are starting to wreak havoc on global trade, with potentially devastating consequences for energy and grain importers while also generating ripple effects across a world still struggling with pandemic-induced supply chain disruptions.

Sanctions on Russia are starting to wreak havoc on global trade, with potentially devastating consequences for energy and grain importers while also generating ripple effects across a world still struggling with pandemic-induced supply chain disruptions. Since Russia's invasion of Ukraine, hundreds of tankers and bulk carriers have been diverted away from the Black Sea, while dozens more have been stranded at ports and at sea unable to unload their valuable cargoes. Russia is a leading exporter of grains and a major supplier of crude oil, metals, wood and plastics all used worldwide in a range of products and by a multitude of industries from steelmakers to car manufacturers. Also read | Russia-Ukraine war: Chinese broadcaster 'censors' call for peace at Paralympic Games opening ceremony Only a small handful of Russia's 2,000 cargo and tanker ships have been sanctioned by Western powers, but freezing the assets of the country's biggest banks means the business of importing and exporting from Russia will take a major hit. Intensifying the squeeze are companies from Apple and Nike to major shippers like Maersk abandoning the country, whose extensive trade ties with the West have been all but severed. This is an earthquake like we've never seen before, said Ami Daniel, a co-founder of Windward, a maritime intelligence firm that advises governments. He added, Companies are going well beyond what's legally required and taking actions based on their own values before their customers even demand it. One potential escape valve for Russian exports is China, whose fast-growing economy is thirsty for natural resources. But China, perhaps the biggest beneficiary of globalization, so far has shown little appetite to fully back President Vladimir Putin despite abstaining from a U.N. Vote condemning the land grab. The strains are already being felt at Interunity Management Corp SA, a family-run Greek shipping company whose 60 oil tankers and bulk carriers are operated by 200 Russian and Ukrainian sea captains and officers. After the invasion, the Russian half of Interunity's workforce wondered how they'd get home after the European Union imposed a flight ban on their country. The Ukrainian half didn't know if they'd have a home to return to. Also read | Ahead of South Korea’s polls, Kim Jong-led North holds 2022’s ninth missile test One Ukrainian senior officer stranded on a tanker in the Gulf of Mexico was so distraught that he demanded to be allowed to disembark months before his contract ended, said George Mangos, one of Interunity's directors. He told me he wanted to get off at the next port so he could fight for his homeland, Mangos said. Operating a highly sophisticated tanker with a dangerous cargo is stressful even under normal situations, so all you can do is ask people to focus on the job and leave the politics aside. It's hard, but these are very stoic people, and I've been impressed by their dedication. So far, the war's impact on global trade has been most severe in the Black Sea, where Russian and Ukrainian ports are major hubs for wheat and corn. Traffic has ground to a halt, effectively shutting down the world's second-largest grain exporting region. Unlike oil production, which can be ramped up quickly elsewhere, boosting grain supplies takes time and the sheer volume that could be diverted as a result of war and sanctions Ukraine accounts for 16% of global corn exports and together with Russia 30% of wheat exports means poorer countries that depend on imports could face major supply shocks. The question is not whether there will be serious economic effects and critical food shortages in already fragile countries, the question is what Russia will do with that and how the West will react, said Rohini Ralby, a director at I.R. Consilium, a U.S.-based maritime consulting firm. Among the countries most at risk are Egypt, India and Turkey, all of which rely heavily on Russia for everything from staples used to make flatbread to natural gas and tourism. Around 78% of Turkey's wheat imports come from Russia and another 9% from Ukraine. Much of those supplies are used in Turkey's food industry, a major exporter itself. India imports about 80% of its oil, much of it from Russia, and metals from Russia to supply the world's fifth-largest automobile industry. Also read | Russia-Ukraine conflict: At least 3 plots to 'assassinate Ukrainian President Zelensky foiled' in last week In the U.S., the biggest impact will be felt at the gas pump, where higher prices are expected to add to inflation already running at the fastest rate in four decades. Russia was the third-largest source of oil products sold in the U.S. Last year behind only Mexico and Canada and responsible for 8% of all imports. Russia is also the United States' second-largest supplier of platinum, a metal used to build exhausts for automobiles. But overall, Russia was only the 20th-largest supplier of goods for the United States in 2019, according to the U.S. Trade data. While the Biden administration has held back from a blanket Russian trade embargo or targeting Russia's energy sector, to limit the pain on the West, that's done little to calm markets. Wheat prices have jumped more than 55% since the week before the invasion. Oil prices, which had been steadily rising since the start of the year due to demand from a recovering global economy, soared past $110 a barrel for the first time since 2013. And the rates charged to charter giant oil tankers worldwide have jumped as much as 400% as oil traders scramble to secure capacity that become suddenly scarce. It's not yet clear how economic warfare on Russia will shake out and what other unintended consequences may be in store. While overcompliance with sanctions is a frequent problem, never in the past have restrictions been imposed so swiftly and coordinated so closely among U.S. Allies to target a global power. The situation alarms Tinglong Dai, a business professor who studies supply chains at Johns Hopkins University. Since the end of the Cold War, the bedrock of global trade has been a separation of geopolitics and business and an assumption that rational decision-making will always prevail, Dai said. Watch | Gravitas: Assessing the Ukraine War in numbers Both of those have been destroyed by Russia, says Dai, adding that a new sort of Iron Curtain" could soon emerge, with Russia and its allies on one side and the West on the other. It's no longer possible to avoid picking sides, and the consequences of this reconfiguration of global supply chains in terms of more poverty, loss of innovation and job opportunities is something we will all have to pay for, he said.

Russia's invasion of Ukraine leaves global trade in tatters

The world’s biggest companies are back to their pre-pandemic levels of confidence in the global economy’s prospects and most expect to make acquisitions to boost growth, as per a KPMG survey.

World Business Watch: KPMG survey shows CEOs back to pre-pandemic levels of confidence

The recovery of global economies worldwide is facing a host of challenges and has been uneven. How developing nations are looking at economic recovery? What's in store for the future? WION's Sumit Chaturvedi talks to Ms. Busi Mabuza, Chair, BRICS Business Council for more perspective.

World Business Watch: How developing nations are looking at global economic recovery?

A backlog of container ships carrying consumer goods has grown in some key strategic ports after a near week-long blockage in the Suez Canal, adding to ongoing disruptions to global trade.

World Business Watch: Global supply lines struggle to clear container backlog after Suez Canal chaos

China's exports beat expectations in August as the world's biggest manufacturing nation's overseas markets reopened from Covid-19. Exports rose 9.5% from a year earlier.

China's export grow significantly faster than Global trade

As the US presidential election draws near, the conflict between America and China will escalate, impairing global trade which is "extremely important" for emerging markets like India and Brazil that are re-opening amid COVID-19 pandemic, former RBI Governor Raghuram Rajan has said.

Cautioning that there will be "deeply damaged firms" in the economy, Rajan said the post-pandemic recovery has to be accompanied by a process of repair.

"There's going to be enormous bankruptcies in the United States certainly and quite possibly in Europe also as we repair the economy, reallocate resources, restructure capital structures," he said on Thursday at the PanIIT USA virtual conference titled 'The New Global Economic Norm: Post CoVID-19'.

"Certainly as we get closer to the US election, the conflict between the US and China is going to increase and that impairs global trade, whichis going to be extremely important going forward, especially for emerging markets like India, Brazil, Mexico, which are going to be significantly impaired by the virus and need some source of demand to pull them out as they start opening up again," he said.

Former Chairperson of the State Bank of India and Salesforce India CEO Arundhati Bhattacharya also addressed the event.

"Global trade is going to be an important factor if they can jump on to it, whether it's trade in goods and services or trade in digital services, it's going to be very important and our countries desperately need an open world," Rajan said.

Rajan, an IIT Delhi graduate and the Katherine Dusak Miller Distinguished Service Professor of Finance at University of Chicago Booth School of Business, said that containment of the coronavirus in countries like the US and India has not happened despite lockdowns, while in some countries containment has been a 2-2.5 month process and virus cases have been brought down to the single digits leading to re-openings.

"There are countries, of course the United States being a prime example, but also India as well as Brazil, Mexico where the containment has not happened despite lockdowns, despite enormous costs. As a result, the cost of the virus is going to be significantly greater than for the countries that have been successful," he said.

Rajan said that for countries like India and the US that are still battling the virus, the main issue right now is to contain the virus, even as he asserted that "unfortunately the spread has become significant enough that containment is going to be very difficult".

"This creates an enormous amount of uncertainty because businesses don't know whether there'll be fresh lockdowns and how difficult they will be. Some states in the US are talking about fresh lockdowns, some states in India are talking about lockdowns and have actually sort of implemented some of those right now," he said.

Rajan also spoke about some of the trends that may emerge post-pandemic.

"There certainly seems to be greater value to working with minds than hands, especially as we go through the pandemic," he said.

He noted that in developed countries, 45-50 per cent of the population can work at home so that the countries can keep working even in the midst of lockdowns.

However, in poorer and developing countries and emerging markets, the number of people who can work at home is much lower, he said.

"As a result, lockdowns have been much more damaging to livelihoods, to economic progress and many in the lower middle class have slipped back into poverty in these countries. There's a number of years that we've lost in terms of economic progress," he said, adding that for going forward, there willl be more emphasis on education and digital technology.

Rajan also underlined that there will be greater automation of work processes.

"Many companies are figuring out how to do things more efficiently during this crisis and that will stay on going forward, which also means that we will have to redeploy workers, we will have to figure out how to do that more effectively and certainly re-training is part of the answer," he said.

Rajan cautioned that corporations, households and governments will have enormous levels of debt as they move out of the pandemic and there will be a lot of focus on how to restructure and bring it down over time.

"The bad debt problems of banks then and the bad debt problems that are likely to emerge for banks across the emerging world is going to be a multiple of what it was in the past and this implies that we need to spend far more time on creating restructuring processes so that firms get back to work and production.

"If we don't focus on the problem of repairing the capital structures of these firms, we're going to have much slower growth, much more problems down the line. So this is something that policymakers need to think about" he said.

Customers are turning to more frugality and savings and there will be more pressure for universal good healthcare as a result of this crisis, Rajan said.

"We've seen the consequences of having inadequate healthcare system, not just in the United States but also in places like India," he said.

"There's going to be much more of a need for capable governments. We've seen what government incompetence can do and that has been problematic. There is going to be much more support in public for more capable governments but also more support for regulation," he said, adding that there is probably going to be more resistance to globalisation.

As the US presidential election draws near, the conflict between America and China will escalate, impairing global trade which is "extremely important" for emerging markets like India and Brazil that are re-opening amid COVID-19 pandemic, former RBI Governor Raghuram Rajan has said.

As the US presidential election draws near, the conflict between America and China will escalate, impairing global trade which is "extremely important" for emerging markets like India and Brazil that are re-opening amid COVID-19 pandemic, former RBI Governor Raghuram Rajan has said. Cautioning that there will be "deeply damaged firms" in the economy, Rajan said the post-pandemic recovery has to be accompanied by a process of repair. "There's going to be enormous bankruptcies in the United States certainly and quite possibly in Europe also as we repair the economy, reallocate resources, restructure capital structures," he said on Thursday at the PanIIT USA virtual conference titled 'The New Global Economic Norm: Post CoVID-19'. "Certainly as we get closer to the US election, the conflict between the US and China is going to increase and that impairs global trade, whichis going to be extremely important going forward, especially for emerging markets like India, Brazil, Mexico, which are going to be significantly impaired by the virus and need some source of demand to pull them out as they start opening up again," he said. Former Chairperson of the State Bank of India and Salesforce India CEO Arundhati Bhattacharya also addressed the event. "Global trade is going to be an important factor if they can jump on to it, whether it's trade in goods and services or trade in digital services, it's going to be very important and our countries desperately need an open world," Rajan said. Rajan, an IIT Delhi graduate and the Katherine Dusak Miller Distinguished Service Professor of Finance at University of Chicago Booth School of Business, said that containment of the coronavirus in countries like the US and India has not happened despite lockdowns, while in some countries containment has been a 2-2.5 month process and virus cases have been brought down to the single digits leading to re-openings. "There are countries, of course the United States being a prime example, but also India as well as Brazil, Mexico where the containment has not happened despite lockdowns, despite enormous costs. As a result, the cost of the virus is going to be significantly greater than for the countries that have been successful," he said. Rajan said that for countries like India and the US that are still battling the virus, the main issue right now is to contain the virus, even as he asserted that "unfortunately the spread has become significant enough that containment is going to be very difficult". "This creates an enormous amount of uncertainty because businesses don't know whether there'll be fresh lockdowns and how difficult they will be. Some states in the US are talking about fresh lockdowns, some states in India are talking about lockdowns and have actually sort of implemented some of those right now," he said. Rajan also spoke about some of the trends that may emerge post-pandemic. "There certainly seems to be greater value to working with minds than hands, especially as we go through the pandemic," he said. He noted that in developed countries, 45-50 per cent of the population can work at home so that the countries can keep working even in the midst of lockdowns. However, in poorer and developing countries and emerging markets, the number of people who can work at home is much lower, he said. "As a result, lockdowns have been much more damaging to livelihoods, to economic progress and many in the lower middle class have slipped back into poverty in these countries. There's a number of years that we've lost in terms of economic progress," he said, adding that for going forward, there willl be more emphasis on education and digital technology. Rajan also underlined that there will be greater automation of work processes. "Many companies are figuring out how to do things more efficiently during this crisis and that will stay on going forward, which also means that we will have to redeploy workers, we will have to figure out how to do that more effectively and certainly re-training is part of the answer," he said. Rajan cautioned that corporations, households and governments will have enormous levels of debt as they move out of the pandemic and there will be a lot of focus on how to restructure and bring it down over time. "The bad debt problems of banks then and the bad debt problems that are likely to emerge for banks across the emerging world is going to be a multiple of what it was in the past and this implies that we need to spend far more time on creating restructuring processes so that firms get back to work and production. "If we don't focus on the problem of repairing the capital structures of these firms, we're going to have much slower growth, much more problems down the line. So this is something that policymakers need to think about" he said. Customers are turning to more frugality and savings and there will be more pressure for universal good healthcare as a result of this crisis, Rajan said. "We've seen the consequences of having inadequate healthcare system, not just in the United States but also in places like India," he said. "There's going to be much more of a need for capable governments. We've seen what government incompetence can do and that has been problematic. There is going to be much more support in public for more capable governments but also more support for regulation," he said, adding that there is probably going to be more resistance to globalisation.

US-China conflict to impair global trade which is vital for India's reopening: Raghuram Rajan

Global trade is expected to drop around 18.5 per cent year-on-year in the second quarter of 2020 in a huge coronavirus-driven plunge which nonetheless could have been much worse, the WTO said Tuesday.

Global trade is expected to drop around 18.5 per cent year-on-year in the second quarter of 2020 in a huge coronavirus-driven plunge which nonetheless could have been much worse, the WTO said Tuesday. "Initial estimates for the second quarter, when the virus and associated lockdown measures affected a large share of the global population, indicate a year-on-year drop of around 18.5 per cent," the World Trade Organization said in a statement. The global trade body said that in the first quarter, the volume of merchandise trade shrank by three per cent year‑on‑year. Giving its initial estimates for the second three months of the year, the expected drop of 18.5 per cent was better than the WTO's worst predictions. "The fall in the trade we are now seeing is historically large -- in fact, it would be the steepest on record. But there is an important silver lining here -- it could have been much worse," said outgoing WTO director-general Roberto Azevedo. "This is genuinely positive news but we cannot afford to be complacent." In its annual trade forecast issued on April 20, the WTO forecast volumes would contract by between 13 per cent at best and 32 per cent at worst in 2020. "As things currently stand, trade would only need to grow by 2.5 per cent per quarter for the remainder of the year to meet the optimistic projection," the WTO said. "However, looking ahead to 2021, adverse developments, including a second wave of COVID‑19 outbreaks, weaker than expected economic growth, or widespread recourse to trade restrictions, could see trade expansion fall short of earlier projections." Azevedo said policy decisions had softened the ongoing blow and would help determine the pace of economic recovery from the crisis. "For output and trade to rebound strongly in 2021, fiscal, monetary, and trade policies will all need to keep pulling in the same direction," said the Brazilian career diplomat, who is leaving his post a year early at the end of August.

Global trade set to shrink 18.5% in Q2, defying worst fears: WTO

US lawmakers seeking to rein in Big Tech have been stepping up efforts to limit legal immunity for online services, and now are taking that fight global.

House Speaker Nancy Pelosi this week backed a move by fellow lawmakers to carve out the so-called Section 230 protection — which some activists say is a cornerstone of the open internet — from a North American trade pact with Canada and Mexico, known as USMCA.

"There are concerns in the House about enshrining the increasingly controversial Section 230 liability shield in our trade agreements, particularly at a time when Congress is considering whether changes need to be made in US law," Pelosi spokesman Henry Connelly said.

Debate on Section 230, a clause in the 1996 Communications Decency Act, has been raging for months amid rising concerns about the failure of tech platforms to curb hate speech, extremist content, copyright infringement and other abuses.

The effort to modify the law — which immunizes online services from third-party content on their sites — has drawn support from both Democrats and Republicans.

Republican Senator Josh Hawley proposed legislation earlier this year that would end the immunity unless companies submit to an "external audit" which shows they are acting in a "politically neutral" manner.

"With Section 230, tech companies get a sweetheart deal that no other industry enjoys: complete exemption from traditional publisher liability in exchange for providing a forum free of political censorship," Hawley said in introducing the legislation. "Unfortunately, and unsurprisingly, big tech has failed to hold up its end of the bargain."

'Proxy' for tech missteps

Civil liberties activists said Hawley's bill is unconstitutional and would put the government in charge of regulating speech. Other analysts point out that Section 230 has enabled the internet to thrive and that modifying it could be devastating for the internet and online speech.

"The services that we enjoy the most exist because of Section 230," said Eric Goldman, director of the High-Tech Law Institute at Santa Clara University.

Goldman said Section 230 has become a "proxy" for the frustrations with Facebook and Google but that "American consumers would be the losers" if the law is weakened.

Corynne McSherry of the Electronic Frontier Foundation told a congressional hearing in October that Section 230 protects not only major tech platforms but any online activity — from forwarding an email to commenting in a news forum to sharing pictures and videos of friends — from "third party liability."

McSherry said that without Section 230, tech firms such as Google, Facebook, and Twitter would not exist in their current form because they would not be able to host user content without fear of a lawsuit.

She argued that eliminating Section 230 would "cement the dominance" of these firms because it would mean higher costs to filter and moderate content that new startups could not afford.

According to Katherine Oyama, Google's head of intellectual property policy, the internet would be a far different experience without the liability shield.

"Without Section 230, platforms could face liability for decisions around removal of content from their platforms," she told lawmakers.

"Review sites like Yelp, TripAdvisor or Angie's List might be sued for defamation claims brought by a restaurant, hotel or an electrician trying to suppress their negative reviews."

Oyama said the current law encourages sites to filter content, but that without the legal protection they might stop all content moderation or simply block anything potentially harmful.

'Healthier' internet?

Danielle Citron, a Boston University law professor specializing in online speech, said Section 230 has failed to live up to its promise and that modifying it could lead to a "healthier" internet.

"Section 230's overbroad interpretation means that platforms have little legal incentive to combat online abuse," Citron told the hearing.

She said that while it has allowed some platforms to moderate content, "they also have been shielded from responsibility even when they solicit illegal activities, deliberately leave up unambiguously illegal content that causes harm, and sell dangerous products."

Citron said the law should be revised "to condition the legal shield on reasonable content moderation practices."

It remains to be seen if lawmakers will move on the law, with a solid bloc of digital rights and industry groups opposing a change.

Ed Black of the Computer and Communications Industry Association, a trade group representing many tech firms, said that inserting these provisions in a North American trade pact "is critical to ensure that the agreement is updated to reflect the needs of the internet economy."

Goldman said the inclusion of the protection makes sense for both economics and free speech.

"Section 230 is not just about free speech, it's about improving information flows in the marketplace," he said.

"It creates new opportunities for entrepreneurs to build businesses and also creates opportunities for marketplaces to be more efficient."

US lawmakers seeking to rein in Big Tech have been stepping up efforts to limit legal immunity for online services, and now are taking that fight global. House Speaker Nancy Pelosi this week backed a move by fellow lawmakers to carve out the so-called Section 230 protection — which some activists say is a cornerstone of the open internet — from a North American trade pact with Canada and Mexico, known as USMCA.

US lawmakers seeking to rein in Big Tech have been stepping up efforts to limit legal immunity for online services, and now are taking that fight global. House Speaker Nancy Pelosi this week backed a move by fellow lawmakers to carve out the so-called Section 230 protection — which some activists say is a cornerstone of the open internet — from a North American trade pact with Canada and Mexico, known as USMCA. "There are concerns in the House about enshrining the increasingly controversial Section 230 liability shield in our trade agreements, particularly at a time when Congress is considering whether changes need to be made in US law," Pelosi spokesman Henry Connelly said. Debate on Section 230, a clause in the 1996 Communications Decency Act, has been raging for months amid rising concerns about the failure of tech platforms to curb hate speech, extremist content, copyright infringement and other abuses. The effort to modify the law — which immunizes online services from third-party content on their sites — has drawn support from both Democrats and Republicans. Republican Senator Josh Hawley proposed legislation earlier this year that would end the immunity unless companies submit to an "external audit" which shows they are acting in a "politically neutral" manner. "With Section 230, tech companies get a sweetheart deal that no other industry enjoys: complete exemption from traditional publisher liability in exchange for providing a forum free of political censorship," Hawley said in introducing the legislation. "Unfortunately, and unsurprisingly, big tech has failed to hold up its end of the bargain." 'Proxy' for tech missteps Civil liberties activists said Hawley's bill is unconstitutional and would put the government in charge of regulating speech. Other analysts point out that Section 230 has enabled the internet to thrive and that modifying it could be devastating for the internet and online speech. "The services that we enjoy the most exist because of Section 230," said Eric Goldman, director of the High-Tech Law Institute at Santa Clara University. Goldman said Section 230 has become a "proxy" for the frustrations with Facebook and Google but that "American consumers would be the losers" if the law is weakened. Corynne McSherry of the Electronic Frontier Foundation told a congressional hearing in October that Section 230 protects not only major tech platforms but any online activity — from forwarding an email to commenting in a news forum to sharing pictures and videos of friends — from "third party liability." McSherry said that without Section 230, tech firms such as Google, Facebook, and Twitter would not exist in their current form because they would not be able to host user content without fear of a lawsuit. She argued that eliminating Section 230 would "cement the dominance" of these firms because it would mean higher costs to filter and moderate content that new startups could not afford. According to Katherine Oyama, Google's head of intellectual property policy, the internet would be a far different experience without the liability shield. "Without Section 230, platforms could face liability for decisions around removal of content from their platforms," she told lawmakers. "Review sites like Yelp, TripAdvisor or Angie's List might be sued for defamation claims brought by a restaurant, hotel or an electrician trying to suppress their negative reviews." Oyama said the current law encourages sites to filter content, but that without the legal protection they might stop all content moderation or simply block anything potentially harmful. 'Healthier' internet? Danielle Citron, a Boston University law professor specializing in online speech, said Section 230 has failed to live up to its promise and that modifying it could lead to a "healthier" internet. "Section 230's overbroad interpretation means that platforms have little legal incentive to combat online abuse," Citron told the hearing. She said that while it has allowed some platforms to moderate content, "they also have been shielded from responsibility even when they solicit illegal activities, deliberately leave up unambiguously illegal content that causes harm, and sell dangerous products." Citron said the law should be revised "to condition the legal shield on reasonable content moderation practices." It remains to be seen if lawmakers will move on the law, with a solid bloc of digital rights and industry groups opposing a change. Ed Black of the Computer and Communications Industry Association, a trade group representing many tech firms, said that inserting these provisions in a North American trade pact "is critical to ensure that the agreement is updated to reflect the needs of the internet economy." Goldman said the inclusion of the protection makes sense for both economics and free speech. "Section 230 is not just about free speech, it's about improving information flows in the marketplace," he said. "It creates new opportunities for entrepreneurs to build businesses and also creates opportunities for marketplaces to be more efficient."

US debate on internet liabilty spills over to global trade deals

The blockbuster growth in the world's major cities in recent years will slow sharply in 2020 and 2021 as the global trade slowdown takes its toll, according to new research.

The blockbuster growth in the world's major cities in recent years will slow sharply in 2020 and 2021 as the global trade slowdown takes its toll, according to new research. Nine of the top 10 biggest global cities will slow next year, with the stars of the US Silicon Valley showing the most dramatic signs of slamming on the brakes, Oxford Economics researchers found in a report provided to AFP. Looking further ahead, while China's metropolitan areas have borne the brunt of the trade conflict, they will bump US cities out of the top 10, the latest annual Global Cities Outlook said. "The current slowdown in the global economy is impacting on the world's major cities," the report said. "Of the top 900, we expect that just under two-thirds, 586, will experience slower growth in 2020-21 than in the past five years." And Richard Holt, head of Oxford's Global Cities Research team, said the trade war's impact and slowing commerce overall goes beyond manufacturing. Many cities are hit indirectly because "anytime anyone does a trade deal... there's a good chance an insurance deal will be done related to that in either New York or London," Holt told AFP. London's lone recovery "It's a combination of China slowing down for its own reasons and the trade war, and in the short-term the problem in European manufacturing, and in particular the German car industry, are all coming together simultaneously," Holt said. Some cities, such as Munich and Beijing, are cooling due to domestic economic factors. London is the lone top-10 city expected to post a modest improvement, after falling sharply due to Brexit concerns. The report projects it will recover slightly to 2.1 percent a year in 2020-21 "from its sub-standard growth of 1.5 percent a year in 2018-19." Most of the cities are tracking growth rates of their national economies, and Oxford economists use country-level GDP to calculate city growth rates, while factoring in demographics and other issues particular to each municipality. Oxford projects the US economic growth to slow to 1.6 percent next year, and 1.8 percent in 2021, while China dips to 5.7 percent and 5.6 percent, and the UK to 1.0 and 1.9 percent. Silicon slump American high tech cities, which have outstripped US growth in recent years, will be the hardest hit by the cooling expansion. San Jose will see its growth rate cut in half in coming years from 8.6 percent in 2017 to 3.2 percent in 2020, the report projects. However, for Silicon Valley, the issues go beyond the global trade war. Rising housing prices have pushed up wages and made other areas such as Austin and Portland more attractive. In Asia, China's largest four metropolitan areas (Shenzhen, Beijing, Guangzhou and Shanghai) grew by more than 10 percent a year in the past decade, but growth rates will slow to around six percent in the next two years. India's booming cities remain at the top of the heap, with the fastest growth rates on the globe, but they are also much smaller than other major cities. Looking ahead to 2035, six of the current cities in the top 10 by GDP will still be there, and the top four -- New York, Tokyo, Los Angeles, and London -- will all retain their places, the report says. But Shanghai, Beijing, Guangzhou and Shenzhen will knock out Osaka, San Francisco, Dallas and Washington, although all will stay within the top 16.

Major US, global cities slowing amid worldwide slump: Report

By Rodrigo Olivares-Caminal

Moody’s, one of the big three credit rating agencies, is not upbeat about the prospects for the world’s debt in 2020 – to put it mildly. If we were to try to capture the agency’s view of where we are heading on a palette of colours, we would be pointing at black – pitch black.

Moody’s rates the creditworthiness of 142 countries, which represent about $62.2 trillion (£48 trillion) of debt. It sees a disruptive political environment both within various countries and at the international level.

This, it says, is aggravating the slow-motion stagnation of global GDP growth that has been a problem since the financial crisis of 2008-09. Together, these difficulties have the potential to worsen the effects of unresolved structural issues in different countries, such as fast-ageing populations, income inequality, poor competitiveness, low currency reserves and poor policies for managing sovereign debt. The net result could be sovereign debt defaults that could trigger new economic and financial shocks and lead to serious instability in the months ahead.

As a professor of banking and finance law, I broadly agree with this prognosis. So where are the most serious flashpoints, and what can politicians and civil servants do to minimise the risks?

Welcome to the cauldron 
 
Unfortunately, the world is sitting on a sovereign debt timebomb that could be triggered at any time by the smallest event. This is confirmed by the IMF’s data, which identifies 32 countries as being at high risk of unsustainable debt. Their borrowings have more than tripled in just two years. We have to remember how serious the consequences can be when a country’s finances spiral out of control: take Venezuela, which is facing a humanitarian crisis with projected inflation of 10,000,000 per cent&nbsp;by the end of this year.

Moody’s argues convincingly that the main drivers of the problems threatening to tip these high debt levels into crisis are twofold: the recent disruption to world trade and the weakening of global and national institutions. World trade in goods is heading for its worst year since 2009, mainly driven by the geopolitical tensions resulting from the trade war between the US and China, and to a lesser extent the Brexit uncertainty in Europe.

The US-China standoff has affected trade volumes between the two superpowers. It has also meant that countries which play an important role in the global supply chain, such as Belgium, the Czech Republic, Ireland, Malaysia, Singapore and Vietnam, will face a slowdown in their economic activity.

Beyond this are indirect consequences that could kick off a crisis: confidence is reducing across the board, and short and medium-term growth is projected to slow down. This threatens to reduce foreign direct investment and capital flows into many countries – Moody’s argues this is already evident in the Asia-Pacific region.

The same thing looks likely to happen to those countries with large account deficits who are more reliant on overseas capital, such as Argentina, Lebanon, Mongolia, Pakistan, Sri Lanka, Tunisia, Turkey and to a lesser extent Indonesia. Capital flight will send their currencies plummeting and make their dollar-denominated debts even more unsustainable, raising the prospect of political strife and contagion.

The division bell

Nationalism and populism are ascendant across the world, undermining the effectiveness of domestic, regional and global policy now that the era of centrist political consensus has ended. As Moody’s notes, this lack of international cohesion has made it harder for institutions, such as the World Trade Organisation and G20, to help coordinate policy responses to economic difficulties.

It doesn’t help that there is also a large amount of bilateral antagonism at present – not only US/China and UK/EU, but also Japan and Korea, China and Japan, North Korea and the US, India and Pakistan, Russia and Ukraine and the ever-present tensions in the Gulf.

In this climate, populist movements are turning the growing anger over rising income inequality to their advantage, as we have seen in the likes of Argentina, Ecuador, Mexico and particularly Chile. Other countries facing similar issues include Ethiopia, Iraq, Lebanon and Tunisia.

In response, governments are being forced to shift their policies. For example, Argentina’s government had to reinstate price controls, which was one of its most criticised policies. Any quick populist fix may quiet discontent, but it doesn’t address structural challenges and only serves to highlight weak governments.

This is not just restricted to emerging markets: Moody’s also recently changed the outlook of the UK to negative, amid the uncertainty surrounding Brexit and the log-jammed parliament. Similarly in the US, the ongoing impeachment process against President Trump and political polarisation are distracting policymakers from more essential and pressing matters – not least the sluggish economy. A ratings downgrade cannot be ruled out entirely.

This should all serve as a wake-up call to other countries with longstanding unresolved structural challenges. Sri Lanka, for example, has large account deficits that cannot be reduced, while India’s credit outlook has also been downgraded to negative because its government’s economic policies have been ineffective at producing growth. Many countries, meanwhile, need to do more to address other challenges, such as robotisation and the emergence of AI, or simply reform fatigue.

Put this all together and it looks like a very toxic mix. Countries need to recognise their mutual interest in avoiding a full-blown debt crisis. They need to try to overcome their differences and embrace a cohesive approach towards development and tackling the debt problem.

It may even be too late. There are some parts of the world, such as Africa, where debt is already getting very close to a regional crisis. Latin America and the Caribbean are also at risk, although some countries are already restructuring their debts.

At any rate, the international community must do what it can before time runs out. For the future, there are two vital lessons: Countries need to tackle their structural issues early, and borrowing must be used for investment and not simply to finance budget deficits. If the world can make genuine progress on these fronts, situations like this can hopefully be avoided in the future. 
 
(Rodrigo Olivares-Caminal is Professor of Banking and Finance Law, Queen Mary University of London)

(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/buckle-up-for-turbulence-why-a-global-debt-crisis-looks-very-hard-to-avoid-127260">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) &nbsp;

By Rodrigo Olivares-Caminal Moody’s, one of the big three credit rating agencies, is not upbeat about the prospects for the world’s debt in 2020 – to put it mildly.

By Rodrigo Olivares-Caminal Moody’s, one of the big three credit rating agencies, is not upbeat about the prospects for the world’s debt in 2020 – to put it mildly. If we were to try to capture the agency’s view of where we are heading on a palette of colours, we would be pointing at black – pitch black. Moody’s rates the creditworthiness of 142 countries, which represent about $62.2 trillion (£48 trillion) of debt. It sees a disruptive political environment both within various countries and at the international level. This, it says, is aggravating the slow-motion stagnation of global GDP growth that has been a problem since the financial crisis of 2008-09. Together, these difficulties have the potential to worsen the effects of unresolved structural issues in different countries, such as fast-ageing populations, income inequality, poor competitiveness, low currency reserves and poor policies for managing sovereign debt. The net result could be sovereign debt defaults that could trigger new economic and financial shocks and lead to serious instability in the months ahead. As a professor of banking and finance law, I broadly agree with this prognosis. So where are the most serious flashpoints, and what can politicians and civil servants do to minimise the risks? Welcome to the cauldron Unfortunately, the world is sitting on a sovereign debt timebomb that could be triggered at any time by the smallest event. This is confirmed by the IMF’s data, which identifies 32 countries as being at high risk of unsustainable debt. Their borrowings have more than tripled in just two years. We have to remember how serious the consequences can be when a country’s finances spiral out of control: take Venezuela, which is facing a humanitarian crisis with projected inflation of 10,000,000 per cent by the end of this year. Moody’s argues convincingly that the main drivers of the problems threatening to tip these high debt levels into crisis are twofold: the recent disruption to world trade and the weakening of global and national institutions. World trade in goods is heading for its worst year since 2009, mainly driven by the geopolitical tensions resulting from the trade war between the US and China, and to a lesser extent the Brexit uncertainty in Europe. The US-China standoff has affected trade volumes between the two superpowers. It has also meant that countries which play an important role in the global supply chain, such as Belgium, the Czech Republic, Ireland, Malaysia, Singapore and Vietnam, will face a slowdown in their economic activity. Beyond this are indirect consequences that could kick off a crisis: confidence is reducing across the board, and short and medium-term growth is projected to slow down. This threatens to reduce foreign direct investment and capital flows into many countries – Moody’s argues this is already evident in the Asia-Pacific region. The same thing looks likely to happen to those countries with large account deficits who are more reliant on overseas capital, such as Argentina, Lebanon, Mongolia, Pakistan, Sri Lanka, Tunisia, Turkey and to a lesser extent Indonesia. Capital flight will send their currencies plummeting and make their dollar-denominated debts even more unsustainable, raising the prospect of political strife and contagion. The division bell Nationalism and populism are ascendant across the world, undermining the effectiveness of domestic, regional and global policy now that the era of centrist political consensus has ended. As Moody’s notes, this lack of international cohesion has made it harder for institutions, such as the World Trade Organisation and G20, to help coordinate policy responses to economic difficulties. It doesn’t help that there is also a large amount of bilateral antagonism at present – not only US/China and UK/EU, but also Japan and Korea, China and Japan, North Korea and the US, India and Pakistan, Russia and Ukraine and the ever-present tensions in the Gulf. In this climate, populist movements are turning the growing anger over rising income inequality to their advantage, as we have seen in the likes of Argentina, Ecuador, Mexico and particularly Chile. Other countries facing similar issues include Ethiopia, Iraq, Lebanon and Tunisia. In response, governments are being forced to shift their policies. For example, Argentina’s government had to reinstate price controls, which was one of its most criticised policies. Any quick populist fix may quiet discontent, but it doesn’t address structural challenges and only serves to highlight weak governments. This is not just restricted to emerging markets: Moody’s also recently changed the outlook of the UK to negative, amid the uncertainty surrounding Brexit and the log-jammed parliament. Similarly in the US, the ongoing impeachment process against President Trump and political polarisation are distracting policymakers from more essential and pressing matters – not least the sluggish economy. A ratings downgrade cannot be ruled out entirely. This should all serve as a wake-up call to other countries with longstanding unresolved structural challenges. Sri Lanka, for example, has large account deficits that cannot be reduced, while India’s credit outlook has also been downgraded to negative because its government’s economic policies have been ineffective at producing growth. Many countries, meanwhile, need to do more to address other challenges, such as robotisation and the emergence of AI, or simply reform fatigue. Put this all together and it looks like a very toxic mix. Countries need to recognise their mutual interest in avoiding a full-blown debt crisis. They need to try to overcome their differences and embrace a cohesive approach towards development and tackling the debt problem. It may even be too late. There are some parts of the world, such as Africa, where debt is already getting very close to a regional crisis. Latin America and the Caribbean are also at risk, although some countries are already restructuring their debts. At any rate, the international community must do what it can before time runs out. For the future, there are two vital lessons: Countries need to tackle their structural issues early, and borrowing must be used for investment and not simply to finance budget deficits. If the world can make genuine progress on these fronts, situations like this can hopefully be avoided in the future. (Rodrigo Olivares-Caminal is Professor of Banking and Finance Law, Queen Mary University of London) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Why a global debt crisis looks very hard to avoid

By Matthew Tostevin

&nbsp;Although India pulled out at the last minute, China and 14 other countries agreed in Bangkok this week on plans for what could become the world's biggest trade agreement - the Regional Comprehensive Economic Partnership (RCEP).

They aim to sign it next year to start freeing up trade between members that include the 10-member Association of Southeast Asian Nations (ASEAN), Japan, South Korea, Australia and New Zealand.

What will RCEP do?

Exact details have yet to be released, but it will progressively lower tariffs across many areas.

Its backers say that just as importantly it will let companies export the same product anywhere within the bloc without having to meet separate requirements and fill out separate paperwork for each country.

"For a goods producer it`s huge," said Deborah Elms of the Asian Trade Centre. "What we don`t have now is a lot of Asian trade for final markets in Asia. This sets that up."

It gives an incentive for companies to build supply chains within the region even if they export outside. 
The agreement also touches on services and on protecting intellectual property.

What doesn't it do?

RCEP is not seen as such a "high quality" trade agreement as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), among 11 Asia-Pacific countries, because it does not cover or harmonise as much.

Tariffs are agreed between countries rather than across the board. For some countries, sensitive issues such as agriculture won't be touched. It lacks provisions for liberalising state enterprises or protecting workers and the environment.

What economic impact will it have?

Even once signed, implementation would take months to start and years to complete. The complexity makes precise calculations hard, economists say.

The 15 participating countries make up nearly a third of the world's people (it would have been nearly half with India). RCEP members account for nearly a third of global domestic product, with India's departure making less of a difference.

What does India's absence mean?

India can join later and other countries - notably Indonesia and Japan - have been lobbying it hard to stay. But Prime Minister Narendra Modi was emphatic about rejecting terms the other members agreed.

"While India`s exit devalues the pact, it also removes the single biggest obstacle to its completion," said Anthony Nelson of consultancy Albright Stonebridge.

India's biggest concern is a wave of cheap goods from China and elsewhere. For other countries, losing India means they won't access a market that is notoriously hard to get into, but also they won't be able to include India as easily in supply chains.

Supporters of the deal argue that India will lose investment while its consumers will pay more than they should. Southeast Asian countries also see India as a counterweight to China`s growing dominance.

"It`s a missed opportunity for India," said Pavida Pananond of Thammasat University in Bangkok.

What does it mean for global trade?

Just getting the deal done - even without India - is a boost for multilateral trade deals over the bilateral sort favoured by US President Donald Trump.

Trump's tariff-raising trade war with China gave extra impetus to push ahead with RCEP, which had progressed only sluggishly since 2012.

Does this strengthen China versus the US?

China is already the biggest source of imports and the destination of exports for nearly all the RCEP countries. 
But at a time of growing concerns over China`s might, it cements its position more firmly as an economic partner with East and Southeast Asia. It will also be better placed to shape the region`s trade rules.

Additional symbolism for China'ss rise at the expense of the United States came from the deal being agreed alongside an ASEAN summit to which Trump`s administration sent a lower-ranking delegation than all other countries.

In a snub to the Americans, they were met by only three of the region's leaders instead of the full group of 10.

"China measures up commendably against the US diplomatic faux pas and India's RCEP withdrawal," said Siew Mun Tang of the Yusof Ishak Institute in Singapore.

(Additional reporting by Panu Woncha-Um and Patpicha Tanakasempipat; Editing by Robert Birsel)

By Matthew Tostevin Although India pulled out at the last minute, China and 14 other countries agreed in Bangkok this week on plans for what could become the world's biggest trade agreement - the Regional Comprehensive Economic Partnership (RCEP).

By Matthew Tostevin Although India pulled out at the last minute, China and 14 other countries agreed in Bangkok this week on plans for what could become the world's biggest trade agreement - the Regional Comprehensive Economic Partnership (RCEP). They aim to sign it next year to start freeing up trade between members that include the 10-member Association of Southeast Asian Nations (ASEAN), Japan, South Korea, Australia and New Zealand. What will RCEP do? Exact details have yet to be released, but it will progressively lower tariffs across many areas. Its backers say that just as importantly it will let companies export the same product anywhere within the bloc without having to meet separate requirements and fill out separate paperwork for each country. "For a goods producer it`s huge," said Deborah Elms of the Asian Trade Centre. "What we don`t have now is a lot of Asian trade for final markets in Asia. This sets that up." It gives an incentive for companies to build supply chains within the region even if they export outside. The agreement also touches on services and on protecting intellectual property. What doesn't it do? RCEP is not seen as such a "high quality" trade agreement as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), among 11 Asia-Pacific countries, because it does not cover or harmonise as much. Tariffs are agreed between countries rather than across the board. For some countries, sensitive issues such as agriculture won't be touched. It lacks provisions for liberalising state enterprises or protecting workers and the environment. What economic impact will it have? Even once signed, implementation would take months to start and years to complete. The complexity makes precise calculations hard, economists say. The 15 participating countries make up nearly a third of the world's people (it would have been nearly half with India). RCEP members account for nearly a third of global domestic product, with India's departure making less of a difference. What does India's absence mean? India can join later and other countries - notably Indonesia and Japan - have been lobbying it hard to stay. But Prime Minister Narendra Modi was emphatic about rejecting terms the other members agreed. "While India`s exit devalues the pact, it also removes the single biggest obstacle to its completion," said Anthony Nelson of consultancy Albright Stonebridge. India's biggest concern is a wave of cheap goods from China and elsewhere. For other countries, losing India means they won't access a market that is notoriously hard to get into, but also they won't be able to include India as easily in supply chains. Supporters of the deal argue that India will lose investment while its consumers will pay more than they should. Southeast Asian countries also see India as a counterweight to China`s growing dominance. "It`s a missed opportunity for India," said Pavida Pananond of Thammasat University in Bangkok. What does it mean for global trade? Just getting the deal done - even without India - is a boost for multilateral trade deals over the bilateral sort favoured by US President Donald Trump. Trump's tariff-raising trade war with China gave extra impetus to push ahead with RCEP, which had progressed only sluggishly since 2012. Does this strengthen China versus the US? China is already the biggest source of imports and the destination of exports for nearly all the RCEP countries. But at a time of growing concerns over China`s might, it cements its position more firmly as an economic partner with East and Southeast Asia. It will also be better placed to shape the region`s trade rules. Additional symbolism for China'ss rise at the expense of the United States came from the deal being agreed alongside an ASEAN summit to which Trump`s administration sent a lower-ranking delegation than all other countries. In a snub to the Americans, they were met by only three of the region's leaders instead of the full group of 10. "China measures up commendably against the US diplomatic faux pas and India's RCEP withdrawal," said Siew Mun Tang of the Yusof Ishak Institute in Singapore. (Additional reporting by Panu Woncha-Um and Patpicha Tanakasempipat; Editing by Robert Birsel)

What's RCEP and why India pulled out of this world's biggest trade development

The <a href="https://www.wionews.com/business-economy/bond-yields-spiral-lower-take-stocks-along-for-the-ride-206161">European Central Bank </a>will ease policy again if inflation does not rise back to its target, ECB President <a href="https://www.wionews.com/business-economy/asia-stocks-firm-euro-sags-after-dovish-ecb-192609">Mario Draghi</a> said on Tuesday, reinforcing expectations for even more stimulus in the coming weeks.

The ECB has undershot its inflation target of just under 2 per cent since 2013 and a slowdown in growth amid a global trade war has raised the risk that price growth will ease further, unravelling the impact of unprecedented accommodation.

"In the absence of improvement, such that the sustained return of inflation to our aim is threatened, the additional stimulus will be required," Draghi told the ECB's annual conference in Sintra, Portugal.

He said the ECB could still cut rates, adjust its guidance, offer mitigating measures to counter the unwanted side effects of negative rates and it also had "considerable headroom" for more asset purchases.

The comments, taken by markets as unexpectedly dovish, sent the euro down by a quarter of a per cent against the dollar while stocks erased early losses and bond yields fell further, many into record low territory.

Markets have already priced in 15-20 basis points of cuts in the ECB's minus 0.40% deposit rate - a big change compared to the start of the year when rate hikes were firmly on the table.

"Will use all the flexibility within our mandate to fulfil our mandate – and we will do so again to answer any challenges to price stability in the future," Draghi said.

Adding an argument for the urgency of action, Draghi noted that growth risks are tilted to the downside and indicators for the coming quarters point to lingering softness.

The ECB would now use the "coming weeks" to study its options, a suggestion that indicated action from the bank may come sooner rather than later.

Limits

Draghi also dismissed market concerns that asset purchases lacked potency as the ECB was coming up against its self-imposed limits, including a rule that prevents it from buying more than one-third of a particular country's debt.

He noted that the limits are flexible because the ECB's legal powers allow it to deploy tools that are both necessary and proportionate.

He said the European Court of Justice had already confirmed that the ECB has broad discretion in using its tools.

Although the ECJ cleared the asset purchases in an earlier ruling, it argued that limits on the buys must be in place, suggesting that any change in those limits could land the ECB back in court.

The ECB sees inflation at 1.4% next year and market-based inflation expectations point to a slowdown in the years ahead.

But Draghi said the ECB would not accept low inflation and would fulfil its mandate, even if the fiscal policy did not provide the necessary support.

"We are committed, and are not resigned to having a low rate of inflation forever or even for now," Draghi said. "That aim is symmetric, which means that, if we are to deliver that value of inflation in the medium term, inflation has to be above that level at some time in the future."

The European Central Bank will ease policy again if inflation does not rise back to its target, ECB President Mario Draghi said on Tuesday, reinforcing expectations for even more stimulus in the coming weeks.

The European Central Bank will ease policy again if inflation does not rise back to its target, ECB President Mario Draghi said on Tuesday, reinforcing expectations for even more stimulus in the coming weeks. The ECB has undershot its inflation target of just under 2 per cent since 2013 and a slowdown in growth amid a global trade war has raised the risk that price growth will ease further, unravelling the impact of unprecedented accommodation. "In the absence of improvement, such that the sustained return of inflation to our aim is threatened, the additional stimulus will be required," Draghi told the ECB's annual conference in Sintra, Portugal. He said the ECB could still cut rates, adjust its guidance, offer mitigating measures to counter the unwanted side effects of negative rates and it also had "considerable headroom" for more asset purchases. The comments, taken by markets as unexpectedly dovish, sent the euro down by a quarter of a per cent against the dollar while stocks erased early losses and bond yields fell further, many into record low territory. Markets have already priced in 15-20 basis points of cuts in the ECB's minus 0.40% deposit rate - a big change compared to the start of the year when rate hikes were firmly on the table. "Will use all the flexibility within our mandate to fulfil our mandate – and we will do so again to answer any challenges to price stability in the future," Draghi said. Adding an argument for the urgency of action, Draghi noted that growth risks are tilted to the downside and indicators for the coming quarters point to lingering softness. The ECB would now use the "coming weeks" to study its options, a suggestion that indicated action from the bank may come sooner rather than later. Limits Draghi also dismissed market concerns that asset purchases lacked potency as the ECB was coming up against its self-imposed limits, including a rule that prevents it from buying more than one-third of a particular country's debt. He noted that the limits are flexible because the ECB's legal powers allow it to deploy tools that are both necessary and proportionate. He said the European Court of Justice had already confirmed that the ECB has broad discretion in using its tools. Although the ECJ cleared the asset purchases in an earlier ruling, it argued that limits on the buys must be in place, suggesting that any change in those limits could land the ECB back in court. The ECB sees inflation at 1.4% next year and market-based inflation expectations point to a slowdown in the years ahead. But Draghi said the ECB would not accept low inflation and would fulfil its mandate, even if the fiscal policy did not provide the necessary support. "We are committed, and are not resigned to having a low rate of inflation forever or even for now," Draghi said. "That aim is symmetric, which means that, if we are to deliver that value of inflation in the medium term, inflation has to be above that level at some time in the future."

European Central Bank will ease policy if inflation doesn't pick up: Chief Draghi

By raising tariffs on Chinese products, the United States will harm the interests of its businesses and consumers in the long term, according to Chinese economic experts at a seminar on China-US trade in Beijing on Sunday.

US raising tariffs will harm American businesses, consumers: Chinese experts

In early March 2019, President Donald Trump, announced that he would withdraw duty benefits on all imports from India. These benefits had been offered under the Generalised System of Preferences (GSP), a programme that allows duty-free imports of specified goods from beneficiary countries. &nbsp;

The scheme, introduced in 1974, was intended as a way of helping developing nations as well as giving the US manufacturers access to cheap raw material. &nbsp;

The March announcement should not have come as a surprise to India. In November, the US withdrew GSP benefits to some 50 products from India. &nbsp;

Earlier in 2018, the Office of the US Trade Representative (USTR) had begun an eligibility review of India, based on complaints received from US dairy associations and the medical technology association. &nbsp;

The trigger for these trade bodies to focus on India was because India had made it difficult for them to enter the market. &nbsp;

In the case of dairy, India had asked dairy importers to certify their products as being from livestock that had not been fed animal parts. &nbsp;

The reason for this is that dairy products in India are often used in religious rites, and need to be ritually “pure”. &nbsp;

Medical technology companies, meanwhile, have been hit hard by the Indian government providing heavy subsidies on medical equipment in order to make such equipment easily accessible. This “populist” move has meant that American companies cannot charge a premium on their products.

According to the USTR, beneficiary countries under GSP are expected to provide “equitable and reasonable access to its markets” to US companies. &nbsp;

India, however, has imposed several measures that the US considers protectionist, including the two steps mentioned above. &nbsp;

What does this mean for Indian exports? According to the government, very little. &nbsp;

Official sources have downplayed the impact of GSP removal. The numbers they quote seem convincing -- Indian exports to the US are valued at $5.6 billion; Indian trade authorities say that GSP covers some $190 million worth of exports and so the impact of removing India from GSP will be minimal. But any negative impact could hit the country’s balance of trade, and a big trade deficit will hit the GDP. 
 
Exporters will also take a hit. Small and medium enterprises (SMEs) form the bulk of exporters who benefit under GSP, and having to pay duty on their goods could prove too expensive for them. &nbsp;

Many of these exporters are in labour-intensive industries, so if they go out of business, it could hit the labour market as well. Leather and footwear, chemicals, and bulk drugs will be the sectors most affected.

On the whole, other exports will not feel the pinch. However, the fear is that once the US has used GSP as a stick, it will make other exports from India unviable. &nbsp;

In the case of seafood, the US has already imposed stringent import regulations; given that the bulk of Indian seafood exports is to the US, these norms will hit India hard. &nbsp;

There’s also the possibility of the US imposing or increasing anti-dumping duties on a range of other goods.

The impact on exporters will likely be softened over the medium term as these players look at markets outside the US. While China and the US may both be closed to these exporters, there’s still a large market in the rest of the world. &nbsp;

Judging by the state of internal politics, and with elections coming up soon, the GSP issue may soon be buried or resolved to India’s benefit. &nbsp;

That’s because removing India from the GSP will mean that Indian goods will cost more in the US, which means that the cost of raw material for American industry could go up too.

Meanwhile, there are steps India can take to protect its exporters. For one, it can approach the World Trade Organisation. Under the Enabling Clause of the WTO’s General Agreement on Trade and Tariffs (to which both India and the US are signatories), developed countries can offer preferential treatment on a non-reciprocal basis. By removing India from the GSP on the grounds that the country isn’t providing access to its market, the US is violating this GATT clause. &nbsp;

India can take this matter to the WTO and, judging by a past victory against the European Union, win. 
 
(This article was originally published on The DNA. Read the <a href="https://www.dnaindia.com/analysis/column-india-s-removal-from-gsp-new-delhi-can-move-wto-2740316">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.) 
&nbsp;

&nbsp;

In early March 2019, President Donald Trump, announced that he would withdraw duty benefits on all imports from India. These benefits had been offered under the Generalised System of Preferences (GSP), a programme that allows duty-free imports of specified goods from beneficiary countries.

In early March 2019, President Donald Trump, announced that he would withdraw duty benefits on all imports from India. These benefits had been offered under the Generalised System of Preferences (GSP), a programme that allows duty-free imports of specified goods from beneficiary countries. The scheme, introduced in 1974, was intended as a way of helping developing nations as well as giving the US manufacturers access to cheap raw material. The March announcement should not have come as a surprise to India. In November, the US withdrew GSP benefits to some 50 products from India. Earlier in 2018, the Office of the US Trade Representative (USTR) had begun an eligibility review of India, based on complaints received from US dairy associations and the medical technology association. The trigger for these trade bodies to focus on India was because India had made it difficult for them to enter the market. In the case of dairy, India had asked dairy importers to certify their products as being from livestock that had not been fed animal parts. The reason for this is that dairy products in India are often used in religious rites, and need to be ritually “pure”. Medical technology companies, meanwhile, have been hit hard by the Indian government providing heavy subsidies on medical equipment in order to make such equipment easily accessible. This “populist” move has meant that American companies cannot charge a premium on their products. According to the USTR, beneficiary countries under GSP are expected to provide “equitable and reasonable access to its markets” to US companies. India, however, has imposed several measures that the US considers protectionist, including the two steps mentioned above. What does this mean for Indian exports? According to the government, very little. Official sources have downplayed the impact of GSP removal. The numbers they quote seem convincing -- Indian exports to the US are valued at $5.6 billion; Indian trade authorities say that GSP covers some $190 million worth of exports and so the impact of removing India from GSP will be minimal. But any negative impact could hit the country’s balance of trade, and a big trade deficit will hit the GDP. Exporters will also take a hit. Small and medium enterprises (SMEs) form the bulk of exporters who benefit under GSP, and having to pay duty on their goods could prove too expensive for them. Many of these exporters are in labour-intensive industries, so if they go out of business, it could hit the labour market as well. Leather and footwear, chemicals, and bulk drugs will be the sectors most affected. On the whole, other exports will not feel the pinch. However, the fear is that once the US has used GSP as a stick, it will make other exports from India unviable. In the case of seafood, the US has already imposed stringent import regulations; given that the bulk of Indian seafood exports is to the US, these norms will hit India hard. There’s also the possibility of the US imposing or increasing anti-dumping duties on a range of other goods. The impact on exporters will likely be softened over the medium term as these players look at markets outside the US. While China and the US may both be closed to these exporters, there’s still a large market in the rest of the world. Judging by the state of internal politics, and with elections coming up soon, the GSP issue may soon be buried or resolved to India’s benefit. That’s because removing India from the GSP will mean that Indian goods will cost more in the US, which means that the cost of raw material for American industry could go up too. Meanwhile, there are steps India can take to protect its exporters. For one, it can approach the World Trade Organisation. Under the Enabling Clause of the WTO’s General Agreement on Trade and Tariffs (to which both India and the US are signatories), developed countries can offer preferential treatment on a non-reciprocal basis. By removing India from the GSP on the grounds that the country isn’t providing access to its market, the US is violating this GATT clause. India can take this matter to the WTO and, judging by a past victory against the European Union, win. (This article was originally published on The DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

India-US trade bumps: New Delhi can move WTO on its removal from GSP

A quarterly leading indicator of world merchandise trade slumped to its lowest reading in nine years on Tuesday, which should put policymakers on guard for a sharper slowdown if trade tensions continue, the World Trade Organization said on Tuesday.

The WTO's quarterly outlook indicator, a composite of seven drivers of trade, showed a reading of 96.3, the weakest since March 2010 and down from 98.6 in November. A reading below 100 signals below-trend growth in trade.

A quarterly leading indicator of world merchandise trade slumped to its lowest reading in nine years on Tuesday, which should put policymakers on guard for a sharper slowdown if trade tensions continue, the World Trade Organization said on Tuesday.

A quarterly leading indicator of world merchandise trade slumped to its lowest reading in nine years on Tuesday, which should put policymakers on guard for a sharper slowdown if trade tensions continue, the World Trade Organization said on Tuesday. The WTO's quarterly outlook indicator, a composite of seven drivers of trade, showed a reading of 96.3, the weakest since March 2010 and down from 98.6 in November. A reading below 100 signals below-trend growth in trade.

WTO warns of global trade slowdown as indicator hits nine-year low

The world`s top 20 economies will work to boost sluggish global trade despite growing protectionism, overcapacity concerns, and uncertainty over Brexit, G20 trade ministers said today at a meeting in Shanghai. 
 
&quot;The global recovery continues, but it remains uneven and falls short of our ambition for strong, sustainable and balanced growth. Downside risks and vulnerabilities persist,&quot; the trade ministers said in a joint statement, adding that trade should remain &quot;an important engine&quot; to spur global growth. 
 
Protectionism has been rising, G20 nations acknowledge&nbsp; 
 
The G20 nations, which account for 85 per cent of global trade, admitted that protectionism has been rising since the financial crisis, and said that new trade restrictions in the group had reached the highest monthly average registered since the&nbsp;World Trade Organisation (WTO) began monitoring in 2009. 
 
&quot;We note with concern that despite the G20&#39;s repeated pledge, the stock of restrictive measure affecting trade in goods and services has continued to rise,&quot; they said in the statement. 
 
Ahead of the meeting, WTO chief economist Robert Koopman warned that restrictive measures could affect industries including air freight cargo, sea based cargo, automobile sales and production, electronics trade, and agricultural raw materials. 
 
The world&#39;s leading economies over the weekend pledged to oppose trade protectionism and reiterated a promise not to add new protective measures until 2018. 
 
Global trade governance to be improve to combat slowdown 
 
Pertinent to mention that global trade is expected to grow at a tepid 2.8 per cent in 2016, the WTO had said in April. 
 
And this year is expected to be the fifth in a row where trade grew at less than three per cent, its weakest sustained level in 30 years, WTO Director-General Roberto Azevedo said on Friday ahead of the talks. 
 
To combat the global slowdown, the ministers said they agreed to improve global trade governance and to work towards easing and liberalising trade.Concerns over China&#39;s production overcapacity in steel have led to trade disputes with the EU and US, and China`s vice commerce minister Wang Shouwen said today that the G20 economies &quot;have realised the necessity to take global cooperation to handle the challenge caused by production overcapacity&quot;. 
 
But despite claims that China is dumping steel in foreign markets, he said &quot;China&#39;s effort in (handling) over capacity has been highly recognised&quot; by the group. 
 
&quot;While some other countries are talking about how to cut down production, Chinese government has already taken measures which have been effective.&quot; 
 
Meanwhile Britain&#39;s referendum vote to leave the European Union (EU) has added new concerns for the recovery of global economic and trade growth. 
 
&quot;Britain leaving the European Union will definitely have some impact on global trade, especially short-term investment,&quot; China&#39;s Wang commented today. 
 
Britain&#39;s trade minister Mark Price told the Financial Times in Beijing ahead of the weekend talk that tariffs would jump to an average level of at least three per cent after its exit from the EU. 
 
He said it&#39;s time to &quot;start exploring options&quot; on trade agreements and &quot;China is making very positive noises at the moment&quot;, the report said. 
 
(AFP)

Britain's referendum vote to leave the European Union has added new concerns for the recovery of global economic and trade growth

The world`s top 20 economies will work to boost sluggish global trade despite growing protectionism, overcapacity concerns, and uncertainty over Brexit, G20 trade ministers said today at a meeting in Shanghai. "The global recovery continues, but it remains uneven and falls short of our ambition for strong, sustainable and balanced growth. Downside risks and vulnerabilities persist," the trade ministers said in a joint statement, adding that trade should remain "an important engine" to spur global growth. Protectionism has been rising, G20 nations acknowledge The G20 nations, which account for 85 per cent of global trade, admitted that protectionism has been rising since the financial crisis, and said that new trade restrictions in the group had reached the highest monthly average registered since the World Trade Organisation (WTO) began monitoring in 2009. "We note with concern that despite the G20's repeated pledge, the stock of restrictive measure affecting trade in goods and services has continued to rise," they said in the statement. Ahead of the meeting, WTO chief economist Robert Koopman warned that restrictive measures could affect industries including air freight cargo, sea based cargo, automobile sales and production, electronics trade, and agricultural raw materials. The world's leading economies over the weekend pledged to oppose trade protectionism and reiterated a promise not to add new protective measures until 2018. Global trade governance to be improve to combat slowdown Pertinent to mention that global trade is expected to grow at a tepid 2.8 per cent in 2016, the WTO had said in April. And this year is expected to be the fifth in a row where trade grew at less than three per cent, its weakest sustained level in 30 years, WTO Director-General Roberto Azevedo said on Friday ahead of the talks. To combat the global slowdown, the ministers said they agreed to improve global trade governance and to work towards easing and liberalising trade.Concerns over China's production overcapacity in steel have led to trade disputes with the EU and US, and China`s vice commerce minister Wang Shouwen said today that the G20 economies "have realised the necessity to take global cooperation to handle the challenge caused by production overcapacity". But despite claims that China is dumping steel in foreign markets, he said "China's effort in (handling) over capacity has been highly recognised" by the group. "While some other countries are talking about how to cut down production, Chinese government has already taken measures which have been effective." Meanwhile Britain's referendum vote to leave the European Union (EU) has added new concerns for the recovery of global economic and trade growth. "Britain leaving the European Union will definitely have some impact on global trade, especially short-term investment," China's Wang commented today. Britain's trade minister Mark Price told the Financial Times in Beijing ahead of the weekend talk that tariffs would jump to an average level of at least three per cent after its exit from the EU. He said it's time to "start exploring options" on trade agreements and "China is making very positive noises at the moment", the report said. (AFP)

G20 nations pledge to boost sluggish global trade

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