CHINA REGISTERS DEFICIT IN INTERNATIONAL SERVICE TRADE
According to the State Administration of Foreign Exchange of China, the Asian giant has recorded a deficit in international services trade in the first two months of 2022. During the same period, it recorded a surplus of 548 billion yuan in international merchandise trade, which exceeded 6.81 trillion yuan, equivalent to a growth of 15 per cent.
VENEZUELA’S GROWTH COULD REACH 20% THIS YEAR, SAYS CREDIT SUISSE
Venezuela’s economy could grow by 20% this year, according to investment bank Credit Suisse, due to rising demand for its crude oil since Russia was sanctioned for its invasion of Ukraine.
A high-level meeting between US and Venezuelan officials in Caracas in early March has opened the door to talks on possible relief from sanctions Washington imposed on the OPEC member’s oil industry from 2019.
Credit Suisse stated that Venezuela could make up the shortfall in Russian oil, noting that the US imported approximately 700,000 barrels per day (bpd) of oil products from Russia in 2021, while Venezuela’s oil export capacity last year was between 500,000 bpd and 700,000 bpd.
The prospect of sanctions relief has prompted state-owned Petroleos de Venezuela (PDVSA) and some foreign companies to take steps in anticipation of increased oil exports.
EUROPE AGREES TO BAN RUSSIAN COAL
European Union countries have agreed to ban Russian coal in the first sanctions on the energy industry over the Ukraine war. Energy analysts and coal importers say Europe could replace Russian supplies within months with other countries, including the United States.
After coal, EU members face the dilemma of banning Russian oil and gas. It is difficult for the EU to agree on energy sanctions because countries such as Germany, Italy and Bulgaria are much more dependent on Russian gas than others. Europe has struggled to get more gas through pipelines from Norway and Algeria and with more liquefied gas arriving by ship, but such global supplies are limited.
For the moment, even the coal ban has worrying consequences for politicians and consumers. Germany and eastern EU countries continue to generate a large share of their energy from coal, despite years of transition to cleaner energy sources.
E-COMMERCE TURNOVER GREW BY 15% IN SPAIN IN THE THIRD QUARTER OF 2021
Growth during this period rose by 14.8% to 14,696 million euros, as reported by CNMC Data. The sectors with the highest revenues include travel agencies and tour operators.
The destinations of the revenues are divided between 44.6% directly in Spain, while the remaining 55.4% corresponds to purchases originating in Spain, made abroad.
E-commerce revenues within Spain rose by 15.6% year-on-year to 4,906 million. The leaders in these transactions were public administration, taxes and social security (with 9.3%), followed by travel agencies and tour operators (7%).
THE EUROPEAN UNION HAS LAUNCHED A PLATFORM FOR EUROPEAN UNION COUNTRIES TO BUY GAS AND LIQUEFIED NATURAL GAS JOINTLY
EU leaders at a summit last month approved the joint purchase of gas, which members, including Spain and Greece, had called for to cushion potential supply disruptions.
The new platform made up of representatives of the Commission and EU countries will pool countries’ demands and coordinate talks with major gas and LNG suppliers.
The scheme is voluntary and countries are not obliged to participate. It aims to use the EU’s influence as the world’s largest gas buyer to attract supply “at stable prices reflecting the predictability and size of the EU common market,” the Commission said in a statement.
The Commission added that the platform will also support the purchase of hydrogen, as the EU aims to switch from fossil gas to low-carbon gases in the future to meet its climate change targets.
EU TO REVISE ITS RENEWABLE ENERGY TARGETS TO MOVE AWAY FROM RUSSIAN ENERGY
The European Union could set more ambitious targets for its transition to renewable energy as it seeks alternatives to oil and gas imports from Russia, EU climate policy chief Frans Timmermans said on Sunday (10 April).
Following Russia’s invasion of Ukraine in February, the European Commission has also proposed that Europe cut Russian gas imports by two-thirds this year, and is drawing up plans to phase them out by 2027.
The Commission plans to propose a ‘Repower EU’ plan in May on how the bloc can wean itself off Russian fossil fuels. Under current plans, the EU would raise the share of renewable energy to 40 per cent of final consumption by 2030.
Egypt, which will host the COP27 climate conference in November and which re-exports Israeli gas from liquefied natural gas (LNG) terminals on its Mediterranean coast, could help the EU diversify its gas imports, Timmermans said.
IRAN SETS CONDITIONS FOR REVIVING 2015 NUCLEAR DEAL AMID STALLED TALKS
Iranian lawmakers have set conditions for the revival of a 2015 nuclear pact, including legal assurances approved by the US Congress that Washington will not abandon it.
Iran and the United States have engaged in indirect talks in Vienna over the past year to revive the 2015 nuclear deal between Tehran and world powers. Negotiations have stalled because Tehran and Washington blame each other for failing to make the necessary political decisions to resolve outstanding issues.
One of the unresolved issues is whether Washington will remove the elite Iranian Revolutionary Guard Corps (IRGC) from the US list of foreign terrorist organisations, as Tehran demands for the deal to be revived.
Imposing such conditions at a crucial time could jeopardise a final deal by restricting negotiators’ room for manoeuvre in the talks.
The lawmakers also said that “sanctions lifted under the reinstated deal should not be reimposed and Iran should not be affected by new sanctions”. Iran’s foreign minister said on Sunday that the US president should issue executive orders to lift some sanctions on Iran to show his goodwill towards reviving the nuclear deal.
THE INTERNATIONAL MARKET A TARGET FOR COMPANIES IN THE REGION OF MURCIA
The region of Murcia is a major attraction in international markets thanks to the quality, innovation and added value of its products and services.
Exports of companies in this region reached a total of 12,152 million euros in 2021, up 22% compared to 2020. With this, Murcia is positioned as the fifth province in exports in Spain, behind Barcelona, Madrid, Valencia and Zaragoza.
The region’s main customers are Italy (49.3%), France (26.5%) and Germany (13%), within the EU, and outside the EU, the most demanding of regional products are the United Kingdom, Morocco, the United States, China and Brazil.
The port of Cartagena is a key player in this whole mechanism, as it is the first port for imports, the 1st for exports and, after the movements of 2021 (31.3 million), it is the leader in bulk traffic.
WAR, COVID AND INFLATION: INTERNATIONAL TRADE REDUCES ITS EXPECTATIONS
The invasion of the Ukraine, together with the sanctions against Russia and the confinements in China, give the WTO a pessimistic outlook for the future, as maritime trade, among other things, is under threat.
Last October, growth of 4.7% was expected, however, the latest analysis has reduced this expectation to only 3% growth in 2022 and 3.4% in 2023.
Regarding global GDP growth, an increase of 2.8% is expected, half that of 2021 (5.7%), and in the event that the geopolitical crisis persists, growth of this indicator in 2023 is expected to be no more than 3.2%.
According to the organisation, the first impact of the war on the economy has been a spike in the prices of food, energy, fertilisers and some important minerals of which Ukraine and Russia are essential suppliers to world markets. It should be noted that prices were already at historical averages since the pandemic.
In its analysis, the WTO also warns of the risk of “the disintegration of the world economy into separate blocs” or the emergence of parallel trading systems that could have an impact on supply chains that were already severely tested during the pandemic by the explosion in demand for goods.
HOW DIVERSIFICATION MITIGATED THE AFTERMATH OF COVID-19 IN INTERNATIONAL TRADE
In the aftermath of the Covid-19 health crisis, the IMF stated that trade should focus on market diversification in order to mitigate potential economic shocks, as, in 2020, this method was essential to avoid a prolonged trade shock.
Following the pandemic, it was concluded that the main effects were in merchandise trade and services sales, although in the former group, a moderate recovery was later recorded at the end of 2020, thanks, among others, to imports.
On the other hand, it is true that there were sectors, so badly affected by the pandemic and its consequences, whose recovery took longer than the rest: the tourism sector fell by up to 75%.
It was because of these differences that IMF analysts concluded that diversification was key to preventing the collapse of international merchandise trade, with the sectors most dependent on the downstream stages of the production process being the hardest hit.
REVISIONS TO FREIGHT TRANSPORT COULD CAUSE A COLLAPSE IN INTERNATIONAL TRADE, WARNS CCE (USA)
The Business Coordinating Council (CCE) assures that the controls on cargo transport at the Texas border, delays of up to 20 hours in the crossing of trucks and has caused a 70% drop in the flow of trade, which could cause a collapse in international trade. The main sectors affected are the maquiladora, automotive, technology and perishable goods industries.
Following the intensification of controls, the average daily dispatch of 3,000 trucks (18,000 per week) has gone down to between 500 and 700 trucks per day. All of this is based on the immigration control and border security measures imposed by the US with the aim of preventing the illegal movement of migrants and drugs.
WTO PANEL CONCLUDES THAT COSTA RICA APPLIED “A DISGUISED RESTRICTION ON INTERNATIONAL TRADE” IN MEXICAN AVOCADO CASE
n 2017, Mexico brought a complaint to the WTO dispute settlement body against Costa Rica.
The WTO panel ruled on 13 April that Costa Rica had applied a “disguised restriction on international trade” by imposing restrictions on the import of avocados from countries with the Avocado Sunblotch Viroid (ASBVd) pest.
The panel’s decision found that Costa Rica had applied arbitrary or unjustifiable distinctions in the levels of protection” between fresh avocados imported for consumption from countries where ASBVd is present.
According to the resolution, “Costa Rica’s phytosanitary measures, namely Resolutions DSFE-002-2018 and DSFE-003-2018, which contain the phytosanitary requirements, arbitrarily or unjustifiably discriminate between its own territory and that of Mexico, and are applied in a manner that constitutes a disguised restriction on international trade”.
For its part, the State is analysing how to adopt the recommendations and how to comply with the judgement.
TRADE BETWEEN CHINA AND THE REST OF THE WORLD SLOWED DOWN IN MARCH
According to the country’s General Administration of Customs, trade slowed its year-on-year growth rate to 5.8%. These data were already expected by analysts, due to the “exceptionally strong” growth that the country experienced during the same period of 2021.
As for Russia, trade with the country grew by 26%. All eyes were on trade between the two countries, after the two countries strengthened their strategic partnership just weeks before the attack on Ukraine began.
UKRAINE RESTRICTS RAIL EXPORTS DUE TO EASTER CLOSURES AND TRAFFIC BACKLOGS
Ukraine, a major agricultural producer, used to export most of its produce through seaports, but since the Russian invasion it has been forced to export by rail across its western border.
The state railway company Ukrzaliznytsia imposed restrictions from 16-18 April to Romania via the Dyakovo and Vadul-Siret passes and to Poland via Yahodyn and Izov, said deputy head of its commercial department Valerii Tkachov.
The restrictions have been implemented “due to the accumulation of a large number of wagons in the direction of western crossings and calls from western partners to reduce the delivery of freight trains,” he said.
Ukrainian agriculture minister Mykola Solskyi said last week that the ministry’s main task was to find alternative ways of exporting Ukrainian grain. The country has 13 million tonnes of grain available for export.
SAUDI CRUDE EXPORTS IN FEBRUARY HIT TWO-YEAR HIGH
Saudi Arabia’s crude exports in February rose to 7.307 million barrels per day, the highest level since April 2020, official data showed on Monday (18 April). Crude exports in February rose 4.4 per cent from around 7 million bpd reported in January.
Crude output from the world’s largest oil exporter in February also rose to its highest level in nearly two years to 10.225 million bpd from 10.145 million bpd in the previous month.
JAPAN POSTS MUCH LARGER THAN EXPECTED TRADE GAP
Japan posted a trade deficit in March four times larger than market expectations, as exports to China slowed sharply, while higher energy prices pushed up the cost of imports, adding to economic woes caused by the conflict in Ukraine. The month of March marked the eighth consecutive deficit, although it was the smallest in five months.
Exports to the United States, the world’s largest economy, grew by 23.8 per cent thanks to increased shipments of auto parts and power-generating machinery. Overall, however, exports were dragged down by a 0.7 per cent drop in motor vehicle shipments.
Imports were mainly driven by increased shipments of oil from the United Arab Emirates, as well as coal and liquefied natural gas from Australia.
MOROCCO IS PRESENTED AS THE BEST DESTINATION FOR FOREIGN TRADE AT IMEX MADRID
The Alawi country is presented as the gateway to Africa for European investors, and is presented as the epicentre of international business for Spanish SMEs that want to expand into foreign markets, building bridges between the two continents.
THE SPANISH ECONOMY BREAKS ITS FOREIGN TRADE CEILING IN THE FIRST TWO MONTHS OF THE YEAR
In terms of both imports and exports, the results for the first two months of the year break records compared to the same dates in previous years, reaching figures worth 56,521 million euros, 28.3% more than in 2021.
RUSSIA’S RYAZAN REGION SEEKS TO INCREASE TRADE RELATIONS WITH INDIA
The governor of Ryazan, Russia’s most industrialised state, met with Indian businessmen from the pharmaceutical, entertainment, water treatment and tourism sectors to seek investment and boost trade. The Ryazan region, about three hours from Moscow, is a key hub for European trade.
Promoting his region, Nikolay Lyubimov assured businessmen that the Ryazan region will ensure free and fair trade transactions with Indian partners.
“Economic sanctions are an opportunity to start new business,” Lyubimov told ET. “From the Ryazan region, we have launched a world tour starting with India, as we are interested in increasing trade with selected countries.”
TRANSPORT COSTS FALL, BUT TRADE IS AFFECTED BY INTERNATIONAL OUTLOOK
Despite notable declines in the cost of shipping containers from China to Europe and the US from the end of 2021, many Chinese exporters have delayed delivery times for existing orders.
The conflict between Russia and Ukraine has inflated energy and agricultural commodity prices in Europe and the Middle East, as well as causing fluctuations in the US dollar exchange rate. “These factors have weakened consumption in these regions and reduced our export volume,” said Jin Xiaomin, president of Zhejiang Kingston Supply Chain Group Co Ltd, a commodity exporter based in Yiwu, Zhejiang province.
To ease the pressure on exporters Shanghai Customs has introduced specific measures to improve its operational efficiency in the face of the resurgence of local COVID-19 since last week.
CHINA’S COVID RESTRICTIONS PUT GLOBAL TRADE IN CHECK “WILL BE WORSE THAN THE BLOCKADE AFTER THE SUEZ CANAL IMPASSE”.
Following the new coronavirus outbreak, which has caused the first omicron fatalities, China has imposed a series of containment measures to prevent the spread, causing problems for both land and sea transport.
Due to the measures, there is a bottleneck in the port of Shanghai, with containers stranded for weeks, which could compromise the smooth functioning of world trade, leading to a lower availability of goods and higher prices.
NEW TRADE SANCTIONS ON RUSSIA AND REMOVAL OF TARIFFS ON UKRAINIAN IMPORTS INTO THE UNITED KINGDOM
The UK will ban the export to Russia of electronic equipment that can be used to spy on Ukrainians, and trade links with Kiev will be strengthened.
The government also announced the removal of tariffs or quotas on imports from Ukraine, to help Volodymyr Zelensky’s administration keep the economy going.
The UK announcement follows a direct request from President Zelensky’s government to liberalise tariffs, helping key Ukrainian exports such as barley, honey, canned tomatoes, and poultry.
The new restrictions on exports to Russia are designed to help isolate Vladimir Putin’s regime by closing potential loopholes to ensure that goods do not originate from the UK.
PALM OIL EXPORT BAN FROM INDONESIA
Indonesia’s ban on palm oil exports will force buyers to look for alternatives, already scarce due to adverse weather and Russia’s invasion of Ukraine.
The move by the world’s largest palm oil producer to ban exports from Thursday 28 April will push up prices of all major edible oils, including palm oil, soybean oil, sunflower oil and rapeseed oil, industry observers predict. This will put additional pressure on cost-sensitive consumers in Asia and Africa affected by rising fuel and food prices.
Importers such as India, Bangladesh and Pakistan will seek to increase palm oil purchases from Malaysia, but the world’s second largest palm oil producer cannot fill the gap created by Indonesia.
RUSSIA CUTS OFF GAS TO TWO NATO COUNTRIES IN A BID TO DIVIDE THE WEST
Russia cut off natural gas to NATO members Poland and Bulgaria on Wednesday (27 April) and threatened to do the same to other countries using its most essential export in what was seen as an attempt to punish and divide the West over its support for Ukraine, the move has already been condemned by European leaders.
The move, which comes a day after the US and other Western allies pledged to send more arms to Ukraine, could force affected countries to ration gas and could deal another blow to economies suffering from rising prices.
SOUTH KOREA’S EXPORT GROWTH IN APRIL TO HIT 14-MONTH LOW; INFLATION NEARS 11-YEAR HIGH
According to Lloyd Chan, senior economist at Oxford Economics, “South Korea’s export growth is set to slow due to a very high base effect and slowing growth momentum in China”.
China, the smaller neighbor’s largest trading partner, continued to implement heavy blockade measures in major cities in April to combat the rise in Omicron coronavirus cases under the “zero COVID-19” policy.
During the first 20 days of this month, South Korea’s exports grew by 16.9% compared to the same period last year, while shipments to China experienced a much smaller increase of 1.8%.
Imports for the whole month outpaced exports by 22.3 per cent, according to the survey, pushing the country’s trade balance into deficit for the second month in a row.
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